F2Pool Founder Says $2.5 Billion Worth of PoS Altcoins Will be Created in 2019 as Staking Economy is Gaining Momentum
As staking services on Proof-of-Stake(PoS) blockchain networks is gaining momentum, Cobo, a Beijing-based cryptocurrency wallet startup, has become the latest crypto custody provider to launch the staking service which is described by Cobo CEO Mao Shixing as a multi-billion dollar business.
The crypto wallet startup unveiled its Staking-as-a-Service (SaaS) along with Wallet-as-a-Service on Wednesday. According to the company, its SaaS business is aimed to provide clients with reliable and secure digital asset storage and value-added services.
With decreased profits of mining Proof-of-Work (PoW) coins amid the bear market, many miners have switched off their rigs and see “staking” which is available with all PoS coins as an alternative way to make money within the crypto industry. The staking process involves crypto holder locking their tokens within a wallet which is used to make a decentralized network more secure, in exchange for token rewards.
Mao, an early-stage bitcoin investor who also found F2Pool in 2013, one of the earliest mining pools in China, said at the Cobo Custody press conference Wednesday that PoS is a better choice in the future.
“ 2019 marks the first year for staking economy. Currently, more than 80 percent of PoS blockchain projects have participated in the staking economy with over $6 billion worth of tokens locked and a market capitalization of $180 billion,” Mao said. “ According to public data, as a large number of PoS networks will be launched this year, they are expected to create $2.5 billion worth of PoS tokens and the annualized return on mortgaged PoS-based digital assets may hit roughly 10%.”
But Mao admitted that PoS mining is at a very early stage, lacking important infrastructure. In contrast, PoW miners equipped with professional hardware and cheap energy source can easily realize one-click mining.
Judy Yan, Managing Director of Danhua Venture Capital, is also bullish on the staking economy. He argued that PoS sector will be more diverse than the PoW because PoS networks separate ownership of tokens from voting rights and voting rights will make the crypto market more dynamic.
Although there are heightened concerns over concentration of voting power which will pose a threat to the PoS network, Mao added that existing public chains have designed multiple ways to make the network more decentralized.
Last year, Cobo raised $13 million in its Series A funding funding round, led by Danhua Venture Capital, the NEO Foundation and Wu Capital.