Coinbase Custody is making it easier for its clients to vote their tokens on more decentralized finance (DeFi) protocols, starting with Compound. The new tools were announced Thursday.
“A year ago, people put their assets in Custody to put them in cold storage and not interact with them much,” said Coinbase product manager Bryce Ferguson. “Now they can stake, vote or do whatever innovative thing those assets offer. … We worked really close with regulators to bring this to market.”
Coinbase’s venture arm invested in Compound Finance starting in 2018. Compound’s 2019 Series A included the Andreessen Horowitz a16z crypto fund, Polychain Capital and Paradigm Capital, all of which are also heavily involved in the Ethereum-centric MakerDAO ecosystem. Polychain and Paradigm are helmed by members of the so-called “Coinbase Mafia.”
“Coinbase Custody is currently the only custody provider and the only in-app voting experience for Compound,” Coinbase said in a press statement.
But this isn’t just Coinbase scratching its own itch. There is retail demand for staking and governance features directly in wallet or exchange accounts.
Ethereum creator Vitalik Buterin tweeted on Tuesday he’s also interested in the idea of mobile staking options for the upcoming Eth 2.0 revamp. Plus, this week the wallet startup Ledger announced self-custodied staking options for Tron’s TRX, the wallet’s second staking token after Tezos. The complementary Ledger Live mobile app went live in January 2019 and has since staked 49 million Tezos tokens, XTZ, second only to Coinbase.
Ledger CEO Pascal Gauthier said staking and governance features, even direct smart-contract access like Compound offers, are on the roadmap some time after this sprint focused on Tron.
“In the short term, we probably think about DeFi more than anything else,” Ledger’s Gauthier said. “The space is growing so much no one is really competing against anyone right now. Everyone is growing.”
Likewise, both Gauthier and Coinbase’s Ferguson said they are closely monitoring Eth 2.0 developments, as any future assets may have either voting or staking features as well.
“In the long term we think about our role toward the user, the fact that we need to make it as secure and easy as possible,” Gauthier said, adding these coin features were inspired by user demand.
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