Binance, one of the largest crypto exchanges in the world, has announced a new reward program for Dogecoin (DOGE) holders. According to the exchange, users can stake their DOGE, LTC, and MANA coins with up to a 10% annual yield percentage (APY). The new initiative is called “locked staking.”
According to the exchange,
“Locked Staking is the process of holding funds in a cryptocurrency wallet to support the operations of a blockchain network.”
While holding locked staking, the exchange reduces the crypto amount from their spot wallets. Moreover, the exchange announced additional rewards for signing up for Binance Savings. Users of Dogecoin can take advantage of double APY benefits even if they have never enrolled up for a savings program.
According to Binance’s released document, the locked staking format will be done on a first-come, first serve basis. Additionally, rewards are paid out on a daily basis.
Although the DOGE staking initiative looks good on paper, some were not too happy.
What’s wrong with Binance’s locked staking program for Dogecoin?
Several users have taken to Twitter and shared their displeasure with Binance’s locked staking program. Popular Dogecoin proponent Mishaboar asked investors to keep away from the exchange’s new initiative. He questioned how it was possible to stake tokens like Dogecoin which follow a Proof-of-Work method of consensus.
Mishaboar highlights the fact that the exchange is unclear with its definitions. Additionally, it does not clarify to which network the staked tokens would be held.
Furthermore, Dogecoin Foundation director Timothy Stebbing also expressed his dissatisfaction with the exchange. Stebbing posted a picture of himself with a facepalm.
The confusion is gaining a lot of traction on social media. However, Binance has not cleared up the matter yet. But hopefully, the exchange clarifies its intentions very soon.
Murky definitions have had detrimental effects on the crypto industry. Major firms have gone underwater with investors not having a clue about the inner workings of the company. Hence, Binance should understand the circumstances and provide due clarification on the matter.
At press time Dogecoin (DOGE) was trading at $0.069141, up by 9.3% in the last 24 hours.