Coinbase has expanded its portfolio in the last couple of years with more and new cryptocurrencies. But this is the first time the cryptocurrency wallet and exchange is rewarding users who hold a particular cryptocurrency – Tezos (XTZ).
Coinbase announced through a blog post on Wednesday this week that US customers (except residents of New York and Hawaii) can stake the smart-contract platform’s digital coin with an approximate 5% annual return.
Tezos’s structure is special in the sense that it uses an alternative consensus mechanism to PoW mining – the same system integrated into Bitcoin. Names proof-of-stake, this mechanism rewards all users in the network for holding the coins and protecting the community.
The 5% annual return is calculated based on Tezos’ last ninety days of staking returns. Coinbase also noted that there is a preliminary holding period of around 35 to 40 days after which users will be able to see the rewards directly in their accounts.
Another interesting fact is that Coinbase has added the cryptocurrency to its educational program called Coinbase Earn that aims to educate the general public about cryptocurrencies. Tezos will be given to participants who complete the educational videos on the platform.
The market was quick to respond. Tezos’ price surged over 50%, hitting a high of $1.43. That figure was on the general cryptocurrency exchanges. On Coinbase, Tezos hit $1.90 per coin after Coinbase announced the staking rewards.
However, right after the rise in the price, Tezos reached an exhaustion point and dropped by 20%. The coin is now trading around $1.15 and the price remains volatile.
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