Coinbase COIN demonstrates a remarkable performance, rising from $71.55 to $94.76 in the last month of July, reflecting a substantial 32% increase in price.
Coinbase COIN Shares Surged by 2.2% in 24 Hours, Reaching $94.76
However, during the same period, Coinbase COIN faced regulatory pressure from the US Securities and Exchange Commission (SEC) due to its staking program, which was found to be non-compliant with the law. As a result, 10 states initiated proceedings against Coinbase COIN, with four states issuing preliminary orders to restrict staking services within their territories. Users in California, New Jersey, South Carolina, and Wisconsin are no longer able to access Coinbase’s staking services, which offer customers the opportunity to temporarily stake their cryptocurrencies to earn additional tokens.
Staking is a core part of ensuring that the cryptoeconomy functions for hundreds of millions of users around the globe/ Staking services are just one part of Coinbase’s existing business. But because staking is so fundamental to the crypto industry, Coinbase is committed to protecting access to staking for everyone.
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Coinbase: How Is The Crypto-Exchange’s Staking Program Progressing?
Forbes reported that by the end of the second quarter, the cumulative value of all staked assets reached an impressive $68 billion, marking a 61% increase from the previous quarter. The annualized staking rewards also experienced a substantial surge, reaching $5 billion, a 66% increase from the first quarter. Liquid staking, a relatively recent development, enables investors to use their tokens in other ways while staking, making up 44% of the total locked value (TVL) of ETH in all decentralized finance (DeFi) offerings, which stands at $45 billion.
Apart from trading fees, staking represents one of Coinbase COIN’s primary revenue streams, generating $73.7 million in the first quarter, accounting for 9.5% of the company’s total revenue. Surprisingly, this figure surpasses Coinbase Custody, the institutional custody service, which contributes only 2.2% to the total revenue.
The Announcement Of The Closure Of The Borrow Program
Coinbase, while dedicated to preserving and safeguarding its staking program, has recently made the decision to completely shut down its Borrow service.
The closure of the Borrow service was executed in stages, with Coinbase suspending the issuance of new loans back in May. Following that, the decision was finalized, and all existing loans were terminated by November 20.
The Borrow service, catering to retail customers, allowed them to acquire loans by using Bitcoin (BTC) as collateral. However, it appears that this particular service did not achieve the desired level of success, likely serving as the driving force behind Coinbase’s choice to discontinue it entirely.
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