Proof-Of-Stake is a new income opportunity for companies, private investors and common users. We’d like to show you how this PoS ecosystem works and who are the market players.
Proof-Of-Stake is the Blockchain network security protocol that allows any PoS tokens owner to participate in the network security management and get rewarded for it. Today the PoS ecosystem market is still being formed. Low entry threshold and a relatively simple system suggest that there can be plenty of various players on this market. Let’s divide them into certain groups and take a closer look at each.
Who holds PoS tokens
Private investors and investment companies are the main PoS ecosystem representatives. However, most of these tokens belong not to them but to funds and companies that are funding decentralized networks development.
Organizations working directly with PoS ecosystem crypto assets or organizations financed with them are also one of such players. Projects and companies make their products available on the PoS network, thus improving it.
To the next group belong third-party services that allow buying, storing and managing PoS crypto assets. They make the decision whether to let clients and their assets participate in the ecosystem work.This group includes exchanges, wallets and other services working with cryptocurrency.
Among the most important participants of the PoS ecosystem are Staking” providers. These are companies providing the infrastructure for making money on Proof of Stake. Such companies can be called “Bidding pools”, “Delegation services” or “Staking providers”.
The last group in this ecosystem includes those players who do professional market research and guide investors into services and working methods that are trustworthy and best for them.
In this picture you can see the PoS ecosystem visualised
Whether it is a private investor or some big company, work always begins with cost and rewards calculation and analysis. Any participant of the process should think about it first. Some can decide to start an independent work while others prefer to delegate it to intermediaries like Staking providers. Let’s see how these groups of token owners and infrastructure representatives are interconnected.
Private investors
This group is the most diverse as it includes professional investors, crypto enthusiasts and those who happened to become PoS token owners by accident.
Investors from this group can participate and make money on the ecosystem in different ways depending on where and how they hold their assets. Some of the investors can manage them on their own while others will pass it to intermediaries in exchange for a certain percentage of their profits. The ones delegating assets management can fall into two more groups - investors, who choose their intermediaries themselves and those who trust the judgement of competent individuals or platforms.
Institutional investors
Unlike private investors’ opportunities for working with the PoS ecosystem, those of the institutional ones are in some way limited by certain rules and regulations. These rules and other restrictions determine how crypto assets will be held.
This group of institutional investors includes venture capital funds that could be investing in PoS projects at an early development stage. To this group also belong hedge funds and other organizations that happened to own and manage PoS tokens for commercial or other reasons.
These organizations can either put together a team of specialists for crypto assets managing or conclude partnership with a company providing such services. Some of them can even work with custodians.
Another management option is the use of specially designed delegation protocols and inspecting third-party services by passing their data to different departments.On the market today you can see examples of institutional investors’ various crypto assets management strategies and their partnership with intermediaries.
Blockchain Companies
Companies working with crypto assets
Many, for some reason, forget or ignore this group when talking about the PoS ecosystem. In fact, it can have a significant Staking market share. Many companies will or already hold crypto assets involved in Staking. They could receive such assets from ICO or grants. Examples of such companies can be payment gateways holding that kind of crypto assets.
Some representatives: BitPay, Ripple, Genesis
Companies building their product on the PoS network
Many projects and companies holding Proof of Stake crypto assets could be interested in securing the network they hold their projects and assets on. Such companies can split their assets and “Put” them on the PoS network thus showing how safe and reliable it is.
Funds
Blockchain community has controversial opinions regarding these funds as they are in control of the larger tokens share. Besides, in the Staking process their share can grow even bigger, thus increasing funds’ control over the network.
Yet at the same time, all the other market players can benefit from this advantage as for assuring the network security a “major holder” support is needed. What’s more, it’s a great opportunity for constant financing and development of the decentralised network.
Some representatives: Tezos, ETH, EOS.
Third parties
Wallets
Cryptocurrency wallets have plenty of options for seizing the Proof of Stake ecosystem opportunities. They can build their own infrastructure or partner with providers of such services. And only then crypto wallets can offer Staking services to their clients.
The other option might be enabling a delegation protocol so their users could decide how to manage their assets in the Staking process.
Some representatives: Cobo, TrustWallet
Cryptocurrency exchanges
The interesting thing about these exchanges is that they can use their clients’ funds and do Staking on their behalf. Or they can resort to creating a different account type in their system that their users can use for participating in Staking.
Some representatives: Binance, Okex, Huobi
Custodians
Some crypto assets owners don’t want to hold and manage PoS tokens on their own so it led to the appearance of certain companies offering representation and mediation services.
For example, American hedge funds’ crypto assets worth over $150 million should be held by a certified custodian. Besides, it has its impact on the Staking economy.
Custodians can manage their infrastructure alone or allow clients pass their tokens to partners for Staking. Since these organizations-holders are regulated by law, it is still unclear whether they will be able to do Staking directly.
Custodians’ activity must be certified by approved regulators.
Some representatives: CoinBase, BitGO, PolySign.
Staking providers
Finally, we’ll talk about the most important, in our view, market players - professional Staking providers.These organizations are engaged in creating and maintaining the Staking infrastructures.
Almost all of the groups described above are somehow involved in work with Staking providers. StakedWallet is an example of such Staking providers aimed at providing high-quality service for private investors, investment companies and other organizations.
Some representatives: HashQuark, Certus, InfStones, Chorus,
Stakedwallet.io
The Proof Of Stake ecosystem has plenty of various representatives but is still essentially simple. However, with such great potential it has already managed to attract considerable amount of funding. It is an undeniable fact that prospects of development are promising both for investors and other players of this market.
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