Bitvavo announces changes to its staking service and interest rates for new cryptocurrencies

The largest crypto exchange in the Netherlands, Bitvavo, has new blog let it be known that it will be making some changes to their strike service from April 18. Terra (LUNA), NEAR Protocol (NEAR), Komodo (KMD), LTO Network (LTO), The Graph (GRT) and Kusama (KSM) will become part of the staking service starting next Tuesday. The interest rates of these newly added cryptocurrencies range from 2% to a whopping 7%

Strike at Bitvavo

In addition to adding all these cryptocurrencies to the staking offer, Bitvavo has also chosen to no longer offer staking for the following cryptocurrencies: Dai (DAI), Chainlink (LINK), Litecoin (LTC) and Tether (USDT). In addition, the strike rewards updated to align with protocol rewards and the current market.

On-chain vs off-chain staking

It is important to be able to distinguish two types of strike viz on-chain strike and off-chain strike. On-chain staking is exclusively with cryptocurrencies that the network uses Proof-of-Stake as a consensus mechanism, such as Ethereum (ETH) or Cardano (ADA), for example. By staking your crypto on-chain, you contribute to the security and operation of the relevant blockchain.

Staking on-chain can be done in several ways, one of which is using a centralized crypto exchange, such as Bitvavo. In addition, you can also make one yourself validator become within the network or you join a so-called staking pool add, but the former is often the most accessible option for beginners.

On the other hand, off-chain staking works a lot differently in theory than its counterpart. However, the outcome is the same: you receive a reward in exchange for holding crypto. Off-chain staking is possible with both Proof-of-Stake and Proof-of-Work crypto coins and has nothing to do with this in that sense. With this form of staking, the user agrees to lend the supported crypto coins to other, external parties, with the aim of earning money from it.

In the case of Bitvavo, Bitvavo Custody BV lends the assets to external parties lending partners.