- The positive move is set to make Solna more accessible.
- Solana surged 11% a day after the announcement.
- Crypto.com offers both on-chain and off-chain staking.
After months plagued by outages and volatility, Solana has seen a welcome development. A major crypto exchange added support for staking on the Solana blockchain.
On Tuesday, April 11, Crypto.com announced it would offer its users on-chain staking for Solana, with up to 5% annual percentage returns (APR) for staking SOL tokens.
The service will make Solana staking more accessible to Crypto.com users. With on-chain staking on the platform, users will be able to stake their tokens without any technical knowledge.
Staking integration on Crypto.com was one of the latest positive advancements for Solana. Technical developments and favorable macro factors pushed Solana up 11% on Tuesday.
Solana is one of the most popular blockchains for staking and in 2022 holders staked more than 70% of all Solana tokens in existence.
On-Chain vs Off-Chain Staking: What’s the Difference?
The crypto space is evolving quickly, and so does its terminology. This is why terms like on-chain staking can create confusion.
On-chain staking, also simply known as staking, is an on-chain operation on proof of stake (PoS) blockchains. Token holders can give their tokens to validators, which secure the PoS blockchain network. In turn, validators distribute rewards to holders.
Naturally, on-chain staking is only available for PoS tokens, such as Ethereum, Solana, Polygon, etc. Stablecoins and proof of work (PoW) tokens don’t generate staking rewards.
Off-chain staking is better known as crypto lending or yield farming. This operation involves transferring custody to a third party in exchange for potential returns.
On the Flipside
- Crypto exchanges are moving to on-chain staking after the US Securities and Exchange Commission cracked down on alternative staking services. In February, Kraken paid a $30 million fine and agreed to shut down its staking service in a settlement with the agency.
- Crypto.com offers both on-chain staking and yield farming services to its users. The exchange offers yield on stablecoins and PoW coins like Bitcoin.
Why You Should Care
On-chain staking is a more secure, and likely more regulatory-compliant way, of earning yield on crypto.
Read more about Solana’s latest rally:
Read more about the SEC’s take on various types of staking and yield services: