Image source: Business Insider
The declining cryptocurrency prices and lack of revenue from user transactions would raise the question of how companies can generate better profit.
However, Coinbase CEO Brian Armstrong said that rather than focus the company’s efforts on turning a profit, they will be focused on staking.
“Any given quarter, it could be up or down,” Armstrong described the crypto market regarding the company’s recent earnings call.
“It’s important to distinguish between what is in our control and what’s out of our control.”
The company call
The crypto winter simmered down interest in trading digital assets from retail and institutional investors.
The Coinbased trading volume fell by over 50% compared to the same quarter from last year, which is down to $217 billion from $426 billion.
During the company call, CFO Alesia Haas admitted that “investors tend to shift from traders to hodlers” when facing headwinds.
However, compared to the same quarter from last year, she said the numbers of monthly transacting users were still up by 200,000.
Read also: A Guide on How to Transfer Cryptoassets from Binance to Coinbase
Staking
A shareholder letter revealed that Coinbase is keeping users around by offering them the ability to stake crypto.
“As a result of our core retail customer trading less, our [monthly transacting user] mix has trended more towards non-investing activities – notably staking,” the letter reads.
According to the letter, the exchange considers staking to be an “early win” for the company.
The letter also reveals staking is among the company’s prioritized products with the long-term goal of becoming the top staking provider among companies involved in crypto.
Read also: Rich Dad Poor Dad Author Waiting on Crypto Prices to Fall to Invest; How You Can Do the Same
Staking & crypto
The company offers staking rewards for tokens like Ethereum, Algorand, Cosmos, and Tezos.
Last March, it added Cardano to the list. Two months later, it added Solana.
Coinbase said 67% of its monthly transacting users engaged with non-investing products in the second fiscal quarter of 2022.
While it didn’t address the number of users staking crypto, the company said:
“Across all assets we support, [Coinbase] saw higher native units staked in Q2 compared to Q1.”
Coinbase continues to emphasize the importance of staking as a part of its business model in the buildup to the Ethereum merge as the second largest cryptocurrency by market cap transitions from a proof-of-work validation system for transactions to proof-of-stake.
“In early August, we began offering Ethereum staking for institutional clients for the first time,” the letter reads.
“We’ll continue to add more assets for staking for both our retail and institutional clients going forward.”
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