Binance recently made a clarification regarding the coins that had been deposited in the proof of Work tokens they were working on, Dogecoin as well as Litecoin. They said that they were neither staking or lending these coins, in order to generate more yields. Those coins that have already been staked will also not be lent out further.
The Announcement From Binance
Investors and even people with a high authority on social media had both expressed poor opinions regarding the staking program from Binance. According to the critics, when cryptocurrencies like Dogecoin shouldn’t be staked. This is as they are not viable, given that the parent blockchain that they come from are PoW. They questioned how then could Dogecoin as well as Litecoin be staked.
A spokesperson from Binance has come forward to address these queries. He stated that these coins were not proof of state tokens. Funds from users will remain with Binance. He also stated that their risk management protocols were strict, in order to provide security.
These coins exist on consensus mechanisms that are proof of Work. This is why people who hold these assets can’t stake the assets that they have, either on exchanges, or in other ways, to get rewards. The Binance program was stated to have an yield percentage that’s annualized, of around 10%. This is why there were investors who were worried, as the ROI was comparatively high. Market conditions are still turbulent, and the latest initiative from Binance is one among many. This is as Binance has entered a period of expansion, where they are trying to develop their infrastructure.