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I thought the consideration for clients staked ETH was fairly generous! What does this mean for existing staking clients in the U.S.? U.S. clients will not be

by rib3ye 4y ago

I thought the consideration for clients staked ETH was fairly generous! What does this mean for existing staking clients in the U.S.? U.S. clients will not be able to stake new assets. Previously staked non-ETH assets will be automatically unstaked. These assets will be returned to the client’s spot wallet and will no longer earn rewards. Kraken will prorate final rewards through February 9. These rewards will not become staked. Kraken will instead pay rewards out in their non-staked form. All staked ETH will become unstaked after the Shanghai upgrade and will continue to earn rewards until then. There are no changes to the payout structure until after the Shanghai upgrade, when ETH will be unstaked.

joosters 4y ago
There's not really any other way - there is no way for anyone to unstake ETH right now (and there's not even a certain timeline for when people can get their money back!) - that's not a kraken limitation, it's a problem (feature?) of ethereum. Kraken can't pretend to unstake customers' ETH and stop paying rewards because they have no way of returning the underlying coins to them.
- sschueller 4y ago
  They can just pay the customers and keep what is stuck as their own asset. From what I understand, kraken can stake their own assets but they can not stake assets for others.
  - Shatnerz 4y ago
    True, but at the moment the funds are locked until next month when Ethereum has a network upgrade (Shanghai). If they credited users ETH directly now, they may not have enough liquid ETH on the books if everyone were to withdraw before the upgrade which would remove all trust in the exchange.
    - captn3m0 4y ago
      If they’re able to pay for a fine out of their pocket, why can’t this be as well?
      - tylersmith 4y ago
        Their fine is $30 million and they have around $2.7 billion worth of eth staked.
  - rom-antics 4y ago
    They might not have the extra money. If (let's suppose) customers have sent 1 million ETH to Kraken that's now staked, Kraken would need another million ETH just laying around in order to do this.
    - sschueller 4y ago
      For something like this you can definitely get a loan or not? They have the ETH, it is just locked up and out of all the coins it is the second least likely to go to Zero tomorrow.

by rib3ye 4y ago

joosters 4y ago

There's not really any other way - there is no way for anyone to unstake ETH right now (and there's not even a certain timeline for when people can get their money back!) - that's not a kraken limitation, it's a problem (feature?) of ethereum. Kraken can't pretend to unstake customers' ETH and stop paying rewards because they have no way of returning the underlying coins to them.

sschueller 4y ago
They can just pay the customers and keep what is stuck as their own asset. From what I understand, kraken can stake their own assets but they can not stake assets for others.
- Shatnerz 4y ago
  True, but at the moment the funds are locked until next month when Ethereum has a network upgrade (Shanghai). If they credited users ETH directly now, they may not have enough liquid ETH on the books if everyone were to withdraw before the upgrade which would remove all trust in the exchange.
  - captn3m0 4y ago
    If they’re able to pay for a fine out of their pocket, why can’t this be as well?
    - tylersmith 4y ago
      Their fine is $30 million and they have around $2.7 billion worth of eth staked.
- rom-antics 4y ago
  They might not have the extra money. If (let's suppose) customers have sent 1 million ETH to Kraken that's now staked, Kraken would need another million ETH just laying around in order to do this.
  - sschueller 4y ago
    For something like this you can definitely get a loan or not? They have the ETH, it is just locked up and out of all the coins it is the second least likely to go to Zero tomorrow.