Almost a thousand Tezos users delegated to Binance and Kraken directly and will not get staking rewards.

Tezos staking stats: how many users delegated to Binance and Kraken directly and won't receive Tezos staking rewards

Vladimir
Vladimir   Follow

Tezos blockchain is known for its special Liquid Proof of Stake consensus algorithm. Everyone can become a validator (in Tezos terms - a Baker) and get additional funds to their staking balance through delegation to gain wages for maintaining the network. At the moment there are more than 400 (opens new window) Tezos bakers.

All Tezos delegates and bakers

This Staking model also applies to exchanges, such as Coinbase (opens new window), Kraken (opens new window), Binance (opens new window), which became the biggest bakers in the Tezos network.

In order to participate in the staking of the exchange, you need to register, pass KYC, and actually store funds on the exchange. Technically, nothing prevents you from delegating from your personal wallet to any Baker, including the Exchange. Most wallets do not warn that Exchanges are custodial staking services and allow users to delegate Tezos from their personal wallets without seams. The problem is that users who delegated to exchanges directly from their wallet will never receive their staking rewards since they do not store their funds on the exchange.

WARNING

Users who delegated to exchanges directly from their wallet will never receive their staking rewards since they do not store their funds on the exchange. Read our instructions on how to choose a good Tezos baker (opens new window)

Recently, with the growing demand for Tezos and Staking, there has been a significant increase in the delegation.

The increase of Tezos delegations over the last year

About 670 users delegated to Binance baker during last year (Binance delegators on Tezos block explorer (opens new window)), 317 of them have already changed Binance delegate to another.

Binance delegators by cycle (1 cycle = 2.83 days)

Kraken Baker got about 288 delegations (Kraken delegators by cycle on Tezos block explorer (opens new window)), and only 75 of them have left Kraken delegate.

Kraken delegators by cycle (1 cycle = 2.83 days)

Technically, Tezos Baker cannot cancel user delegations or prevent them in any way. Therefore, users themselves should oversee whom they delegate to, Baker fee, payment schedule, and free space, which depends on Baker's own balance. All this information is provided by third party services like Baking Bad (opens new window).

Staking is gaining momentum — about 80% of all Tezos coins involved in staking, and no one Proof of Stake algorithms has such high ratio. Tezos market cap is more than $1.8 billion at the moment. Therefore, anyone who wants to participate in the staking process and earn staking rewards should take this seriously and clarify all questions in the community or on the Tezos website (opens new window).

You are always welcome in our telegram chat (opens new window).

Tezos community is amazing! 🙌🏻