Gemini introduces staking, its second yield-generating product

Gemini, the cryptocurrency exchange founded by the Winklevoss twins, is launching its own staking service for retail and institutional customers in the United States (excluding New York), Singapore, and Hong Kong.

Dubbed ‘Gemini Staking,’ the service enables users to earn dividends or interest on their digital assets for validating transactions and also allows them to vote on changes in the blockchain. Users are rewarded for simply depositing and holding coins on Gemini as they normally would.

Upon launch, Gemini users can only stake MATIC on the Polygon network, but the exchange plans to extend the service to Ethereum (ETH), Solana (SOL), Polkadot (DOT), and Audius (AUDIO) soon. This set of assets, according to Gemini, must be compliant with jurisdictional regulations and local laws, as well as strict technical, safety, and compliance reviews.

“The launch of Gemini Staking underscores our continued commitment to offering a full suite of innovative options for our customers to put their crypto assets to work. We continue to seek out new ways to help our customers grow their crypto portfolios and tailor them to their risk appetite — staking is an important next step in that evolution,” said Franck Kengne, Product Manager at Gemini.

Other crypto exchanges already allow US users to stake their crypto holdings, including Coinbase which offers the service for institutional clients. While its staking service is still in its infancy, Gemini already allows its users to earn interest on their cryptocurrencies through providing loans to those interested in borrowing digital assets.

Specifically, staking is the second yield-generating product launched by Gemini, following Gemini Earn. While both Staking and Earn allow clients to earn yield on their crypto, there are important differences in how those yields are generated.

As the exchange explains, Gemini Staking offers a way to secure and validate blockchain transactions, with yield generated through crypto rewards paid out to validators. With Gemini Earn, the platform partners with accredited and vetted third-party borrowers who deliver yield to Gemini users generated through payment of interest on loaned assets.

The new product comes shortly after the US derivatives regulator filed a lawsuit against Gemini for providing false information. The Commodity Futures Trading Commission (CFTC) said the operatives of Gemini exchange made false statements concerning a bitcoin futures contract the firm was pursuing alongside Cboe in 2017.

In a race by major exchanges to offer bitcoin derivatives products, the complaint alleges that Gemini made “false or misleading statements of material facts, or omitted to state material facts” during the CFTC’s evaluation of its proposed futures contract.