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Cardano Founder Clears Misconception About Proposed Contingent Staking: Details

Thu, 02/16/2023 - 09:58
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Godfrey Benjamin
Charles Hoskinson said contingent staking will not replace normal staking on Cardano
Cardano Founder Clears Misconception About Proposed Contingent Staking: Details
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Cardano founder Charles Hoskinson has taken to his Twitter handle to address the misconceptions and criticisms surrounding his recently proposed contingent staking. According to Hoskinson, the contingent staking proposal does not imply that a Know-Your-Customer (KYC) regime will be implemented on Cardano.

The idea of contingent staking for the proof-of-stake (PoS) protocol was shared as early as last week following the crackdown on Kraken by the U.S. Securities and Exchange Commission (SEC). As a centralized trading exchange, the regulator noted that Kraken kept users' funds and paid out rewards from the efforts of others, thus constituting a security.

In the contingent staking proposal, Hoskinson wants stakers and stake pool operators (SPOs) to have a formal agreement so as to meet all regulatory demands from the SEC. Besides this, the founder also alleges that the staking model will make the Cardano protocol more functional across the board.

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Cardano's Network: Pros and Cons of KYC Implementation

In the recent clarification, Hoskinson said his idea was not for the Contingent Staking model to replace regular staking.

Contingent staking does not implement a KYC regime on cardano. It does not replace normal staking. It does not remove private pools. A marketplace of SPOs would still exist and allow people to continue to delegate to their preferences, including normal stakepools.

Future of PoS staking

With the crackdown on Kraken, many industry experts are beginning to ponder what the future of staking might look like. Coinbase exchange has consistently argued that its own staking offering is not secure and that it may seek legal redress should the SEC send a Wells notice the way it has done for its competitors.

In the absence of proper guidance from the SEC, the idea of staking still remains a blurry affair. Without much clarity, American investors may be forced to seek this same offering offshore, as most leaders have argued.

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About the author

Godfrey Benjamin is an experienced crypto journalist whose main goal is to educate everyone around him about the prospects of Web 3.0. His love for crypto was birthed when, as a former banker, he discovered the obvious advantages of decentralized money over traditional payments. With his vast experience covering various aspects of Web3, Godfrey's articles has been featured on Blockchain.news, Cryptonews and Coingape, among others.