Cryptocurrency

Staking-as-a-Service is not a commodity

Quick Take

  • Industry analysts predicting the commoditization of Staking-as-a-Service providers fail to account for the development of special interest groups in networks with formal on-chain governance 
  • Potential contentious issues include: treasury allocation, technical development and staking thresholds

A boom of “picks and shovels” companies catering to Proof-of-Stake cryptocurrencies has emerged as a leading market narrative for 2019. At the center of this burgeoning industry lies the Staking-as-a-Service model, a product of protocols like Tezos, Decred, and Cosmos mandating a minimum threshold amount for asset staking. Like pools aggregate hashrate across miners on Proof-of-Work networks, these companies allow smaller holders to delegate their stake in return for a commensurate share of the block reward.