Binance Adds Staking Support for Fetch.AI (FET) and Elrond (ERD)

On Thursday (October 10), Binance announced staking support for Fetch.AI (FET) and Elrond (ERD), two cryptoassets that had public token sales on Binance Launchpad (Binance's IEO platform) earlier this year.

Binance's Staking Platform

Binance announced on September 26 the official launch of its Staking platform, which provides a super easy way to earn staking rewards just by "depositing and holding funds" on Binance.

Binance defines "staking" as "the process of holding funds in a cryptocurrency wallet to support the operations of a blockchain network."

Here is what Binance Co-Founder and CEO Changpeng Zhao (aka "CZ") said about the exchange's staking service on September 27:

Until today, here were the cryptoassets supported for staking: Algorand (ALGO), Komodo (KMD), NEO, Ontology (ONT), Qtum (QTUM), Stellar Lumen (XLM), Stratis (STRAT), and Vechain (VET).

Here are a few things worth noting about Binance's staking service:

  • It is free -- Binance does not charge any fees for staking.
  • It has no "lock-up period" -- you can sell you coins or withdraw them at any time to stop receiving staking rewards.
  • You can trade any portion of your coins while staking (obviously, this will affect your staking balance).

Staking Support for Elrond (ERD)

Binance announced this news via the following tweet:

Binance's staking support for Elrond (ERD) starts today (October 10).

The Binance team said that ERD staking rewards would be distributed as follows:

  • Starting at 00:00 UTC on 10 October 2019, Binance will start taking hourly snapshots of users' ERD balances (i.e. 24 snapshots each day).
  • The following two equations will be used to calculate the ERD staking distribution:
    • "ERD generated by each user = Total ERD staking rewards received by Binance * User ERD holdings ratio"
    • "ERD holdings ratio = User ERD holdings / Total ERD staked by Binance"

To qualify for staking rewards, users need to have at least 700 ERD.

The first distribution will be calculated up to 10 November 2019, "with the total amount distributed equal to the staking rewards accrued on holdings during the period."

ERD rewards will be determined on a daily basis (hourly snapshots) and paid out on a monthly basis.

Staking reward distributions will be completed by the 15th of each month.

Staking Support for Fetch.AI (FET)

Binance announced this news via the following tweet:

Binance's staking support for Fetch.AI (FET) starts on October 11.

The Binance team said that FET staking rewards would be distributed as follows:

  • Starting at 00:00 UTC on 11 October 2019, Binance will start taking hourly snapshots of users' FET balances (i.e. 24 snapshots each day).
  • The following two equations will be used to calculate the FET staking distribution:
    • "FET generated by each user = Total FET staking rewards received by Binance * User FET holdings ratio"
    • "User FET holdings ratio = User FET holdings / Total FET staked by Binance"

To qualify for staking rewards, users need to have at least 25 FET.

The first distribution will be calculated up to 10 November 2019, "with the total amount distributed equal to the staking rewards accrued on holdings during the period."

ERD rewards will be determined on a daily basis (hourly snapshots) and paid out on a monthly basis.

Staking reward distributions will be completed by the 15th of each month.

Why Binance Is Adding Support for Elrond

Earlier today, Changpeng Zhao (aka "CZ"), used the following tweet to explain why Binance is adding staking support for Elrond:

 

Featured Image Courtesy of Binance

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Trans-Fee Mining Crypto Exchange 'FCoin' Insolvent After Mistakenly Being Too Generous

One of the first cryptocurrency exchanges to adopt the controversial trans-fee mining (TFM) model, which has been called a “disguised ICO” has paused trading and withdrawals over a shortage of crypto worth up to $130 million.

According to a statement published by FCoin’s founder Zhang Jian, a former Huobi CTO, the exchange is now unable to process withdrawals as its reserves are down by between 7,000 to 13,000 bitcoin, worth over $130 million at press time, over an issue that’s “a little too complicated to be explained in a single sentence.”

Zhang’s statement details the cryptocurrency exchange wasn’t hacked, nor is it pulling an exit scam on its users. He detailed that an internal system error gave users more mining rewards than they should have received, noting the error wasn’t detected for a long period of time.

The transaction-fee mining model, which saw FCoin’s trading volume surpass $5 billion per 24 hours numerous times, sees the cryptocurrency exchange incentivize trading via its own token, FT. FCoin reimbursed users for transaction fees paid in BTC or ETH with FTs until 51% of the coin’s supply was distributed, and redistributed 80% of the BTC and ETH it collected to those holding FT tokens.

The controversial model drew criticism and saw Zhang defend it, claiming it was a misunderstood invention. At the time, he said:

If you look back at history, all new things were not recognized at the beginning. Many were believed to be fraud. Jack Ma was recognized as a fraud when he first promoted the internet in China.

Various cryptocurrency exchanges started adopting the TFM model shortly after, with research showing these platforms had unusually thin order books and low traffic taking into account the trading volumes they had.

According to Zhang, the errors in FCoin’s system gave away too many tokens in mining rewards from mid-2018 to mid-2019, when a complete back-end auditing system was implemented. As throughout 2019 the price of FT kept on dropping, Zhang and his team reportedly used their own funds to buy back tokens and drive up demand, a decision he claims was an error.

This, as it gave users a chance to sell their FT tokens and withdraw as much as possible from their accounts, while FCoin bought up tokens that kept on losing value. Zhang’s announcement came shortly after FCoin suspended its platform over a risk-control issue.

Zhang is now reportedly manually processing users’ withdrawal requests sent via email. The founder of the exchange claimed he will “switch tracks” to start again, and noted he hopes he can use the profits made from new ventures to “compensate everyone for their losses.”

Featured image via Unsplash.