Regardless of the ‘dramatic, knee-jerk reactions’ as Charles Hoskinson calls it, the Cardano (ADA) blockchain inventor and CEO of Input Output Global (IOG) believes his recently introduced staking model would evade regulatory strikes.
On February 9, Cardano founder Charles Hoskinson submitted a novel staking model dubbed Contingent staking via a Youtube upload. In response, several industry players have both destructively and constructively criticized the Hoskinson-introduced staking concept.
The ADA token inventor took to Twitter today to shade more light on the Contingent staking model, hitting back at the destructive critics. According to him, the naysayers lack the understanding of the simple concept he is presenting hence, their gross misinterpretation.
“It’s incredible how polarized some people have become to the extent that they can not understand a basic concept and continue to misrepresent it, ” he said, adding that contingent staking opposers offer no solution for how stake pools can be run to fully comply with local regulations.
To further explain the recommended staking model, he highlighted that Contingent staking will not replace the conventional staking model of private stake pools as misinterpreted by many users.
“Contingent staking does not implement a KYC [Know-Your-Customer] regime on Cardano. It does not replace normal staking. It does not remove private pools. A marketplace of SPOs would still exist and allow people to continue to delegate to their preferences, including normal stake pools.”
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Notably, all these developments emerged as a result of the fresh SEC onset on the prevailing crypto staking model. The SEC argues that several staking services or products offered by some crypto exchanges including Coinbase and Kraken violate securities law, citing ‘the expectation of profits from the efforts of others’ prong of the Howey Test, of which Hoskinson agreed to in his latest webcast.
Per a previous report, the United States Securities and Exchange Commission (SEC) charged a top centralized U.S.-based crypto exchange, Kraken on February 9. The agency claimed that Kraken’s Staking-as-a-Service (SaaS) program is an unregistered security. To settle the case, the exchange paid a penalty of 30 million dollars. Charles Hoskinson thinks adopting contingent staking would eradicate issues like this from occurring.
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However, he noted that the topic of contingent staking is a minor concern compared to the planned developments on the sleeves of the Cardano blockchain development team including Voltaire. It’s also worth mentioning that Djed, a Cardano-based stablecoin went live on the mainnet in January ending and within seven days, Djed recorded a whopping 14,587% increase in unique addresses.
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