Binance Starts Algorand Staking Services After XLM and KMD
Binance is undergoing a series of updates to allow staking rewards for assets it already holds in its wallets.
Binance has added another asset to its portfolio of staking coins - Algorand (ALGO). This extends the streak of newly added staking coins offering a form of returns. Binance already supports rewards for Stellar (XLM) and Komodo (KMD), added in the past two weeks.
Algorand is a pure staking blockchain, meaning anyone can hold coins in a wallet and receive direct ALGO rewards. There is no secondary asset to be distributed, as in the case of NEO and GAS. Binance also distributes secondary assets such as ONG for the Ontology network, and VTHO for the VET network.
Algorand is one of the curiosities in the crypto space, as the project was unrolled and listed almost immediately to all leading exchanges. The popularity of ALGO only increased as staking coins are becoming more attractive once again. Small-scale coins are no longer attracting supporters through mining, which requires knowledge and hardware investments, instead offering an economy where holding the coins in a wallet brings rewards.
Binance is one of the leading custodians of digital assets, and as such is eligible to receive staking rewards. The exchange believes that traders still own the assets, despite not owning the private keys, and deserve the staking rewards.
ALGO still trades around $0.65, down from a peak at the start of trading around $3.22. ALGO is still thinly traded and in a price discovery stage. The staking opportunity may revert more coins to Binance and possibly encourage trading.
As usual, Binance adds to the staking reward with an immediate airdrop of bonus coins from a pool equivalent to $135,000.
Binance will hold daily snapshots for ALGO balances, adding to the snapshots for other assets held within trading balances. Holders of more than 2 ALGO are eligible for staking. The scheme is flexible enough, allowing some trading activity in addition to simply storing the coins.
Algorand staking offers a limited gain of 2.98% annualized, to offset inflation on the network.