How can crypto address its image problem?
Naturally, with another positive story from the the crypto world.
As I've often maintained, crypto has a perception issue. Investors assume the worst will happen fear losing their money if the companies they invest in fail. While the same risk exists in the traditional finance world too, crypto company failures make for better news as the collapse is often sudden and dramatic and the underlying circumstances typically murky. But times are definitely changing for the better. Earlier this year, collapsed exchange FTX committed to return all user funds. And now, major crypto exchange Gemini will also return all funds (over $2Bn) to users following the demise of its partner, Genesis Capital.
Gemini offered a program called Earn which offered a higher rate of return if a user were willing to lock up their money for a period of time. This is a common product in the crypto world and the equivalent of a fixed deposit in traditional finance. The longer the lock-up period, the greater the interest offered. Just as banks lend out customer deposits to earn interest and "reward" some of it back to their customers, in crypto you can lend your tokens to companies that use these tokens to support the ongoing functions of the blockchain. For doing these essential blockchain support tasks, companies receive token rewards which they in turn share with you as your "token loan" helped make it happen. This whole process is called staking and the rewards earned, the "interest", is called a staking reward.
Gemini offered such a staking service via their partner, Genesis Capital. Gemini customers would earn rewards by staking their assets with Genesis. In the wake of the FTX collapse, Genesis ultimately went bankrupt taking Gemini customer funds with it. The two companies sued each other, and earlier this year Genesis settled to return all "lost" assets back to Gemini customers. Such moves can only strengthen the trust of Gemini customers as well as industry watchers. Yet another major crypto player has done the expected right thing for its customers. That's a win for all of crypto.
Founder | Non-Executive Director | 3 Successful Exits
4moCharlie sounds like a great event!