Stacking Economics and Regulation: Views from Zero CHU at 2023 Web3 Carnival in Hong Kong

On April 14th, at the 2023 Web3 Carnival in Hong Kong, Zero CHU, the head of Bitnet Asset Management, shared his views during a roundtable discussion on “Stacking Economics and Regulation”. He pointed out that ETH’s PoS mechanism and huge liquidity will attract investment institutions and family offices to pledge ETH. With the emergence of projects such as lowering the threshold for pledge and new LST machine gun pools, it is believed that the pledge track will unleash a new round of innovation and flywheel. The regulation by the US Securities Regulatory Commission does not mean that the crypto community will fall into a passive situation, but rather promotes communication. Bitget is committed to building its own compliance team, promoting licensing matters, and is currently actively applying for licenses in Hong Kong and other places, actively communicating with regulatory authorities.

Zero CHU, Bitget Asset Manager: ETH’s PoS mechanism and high liquidity will attract investment and pledge

In the world of cryptocurrency, the concept of “staking” has emerged as a key player in the industry. Staking refers to the process of holding a cryptocurrency to support its operations and earn rewards in return. In an industry where volatility is the norm, staking offers investors a way to earn rewards by simply holding onto their digital assets.
On April 14th, at the 2023 Web3 Carnival in Hong Kong, Zero CHU, the head of Bitnet Asset Management, shared his views during a roundtable discussion on “Stacking Economics and Regulation”. Chu pointed out that ETH’s PoS (Proof of Stake) mechanism and huge liquidity will attract investment institutions and family offices to pledge ETH. With the emergence of projects that lower the threshold for pledge and new LST (Liquidity Staking Token) machine gun pools, it is believed that the pledge track will unleash a new round of innovation and flywheel.

The Rise of Staking

Staking has been gaining traction in the crypto industry, with more and more investors looking to staking as a way to earn passive income. In recent years, Ethereum, the second-largest cryptocurrency by market capitalization, has been transitioning from its Proof of Work (PoW) consensus algorithm to the more efficient Proof of Stake (PoS) mechanism.
This transition to PoS is expected to bring significant changes to the Ethereum network, as it will require less energy consumption and greater decentralization. Investors who stake their ETH will be rewarded with a portion of the transaction fees earned by the Ethereum network. This will likely attract investment institutions and family offices to pledge more ETH, further increasing liquidity on the network.

Lowering the Threshold for Pledge

One of the bottlenecks for staking is its high threshold, which has limited the participation of retail investors. However, with the rise of new projects such as LiquidStake and LQTY, the threshold for staking has been lowered, allowing more investors to participate. This has led to increased liquidity and more opportunities to stake one’s assets on the network.

New LST Machine Gun Pools

The development of new LST machine gun pools has also contributed to the growth and innovation of the staking industry. These machine gun pools allow investors to pledge their assets for a short period of time, typically between 24 hours and 30 days, and earn rewards in return. These shorter pledge periods are suitable for investors who want to earn rewards quickly without committing to a long-term pledge.

The Role of Regulation

Despite the growth and innovation of the staking industry, regulatory concerns remain a significant challenge for investors and businesses in the crypto industry. In the US, the Securities and Exchange Commission (SEC) has been cracking down on unregistered security offerings and other illegal activities in the crypto space, raising questions about the future of crypto regulations. However, according to CHU, regulation does not mean that the crypto community will fall into a passive situation, but rather promotes communication.

Bitget’s Compliance Efforts

As a reputable crypto trading platform, Bitget is committed to building its own compliance team and promoting licensing matters. Bitget is currently actively applying for licenses in Hong Kong and other places, actively communicating with regulatory authorities. This demonstrates Bitget’s commitment to complying with regulations and promoting a sustainable future for the crypto industry.

Conclusion

CHU’s views on the future of staking economics and regulation shed light on the growing interest in staking, as well as the challenges and opportunities the industry faces. Staking is expected to bring significant changes to the Ethereum network, attracting more investors and increasing liquidity. While regulatory concerns remain a significant challenge, Bitget’s compliance efforts demonstrate the willingness of players in the industry to work with regulators to promote a sustainable future for cryptocurrencies.

FAQs

1. What is staking?
Staking refers to the process of holding a cryptocurrency to support its operations and earn rewards in return.
2. What is Proof of Stake (PoS)?
Proof of Stake is a consensus mechanism used in cryptocurrencies that allows users to validate transactions and earn rewards by staking their digital assets.
3. Why is regulation important for the crypto industry?
Regulation is important for the crypto industry because it helps to protect investors and promote a sustainable future for cryptocurrencies.