Crypto exchange Kraken snaps up staking platform amid M&A boom
Crypto exchange Kraken has purchased Staked in a deal which it claims is “one of the largest crypto industry acquisitions to date.”
The staking platform is Kraken’s largest takeover deal to date and the company’s fifth acquisition of 2021. While the exchange giant did not disclose the exact amount paid its largest purchase was formerly a nine figure offer for trading platform Crypto Facilities.
The purchase comes at the end of a record year for crypto and blockchain deal making with $25bn of funding allocated across 2021, a year on year increase of 730 per cent according to research by the Block.
“We are excited to add Staked to our portfolio of yield products, which has seen great uptake by a growing population of crypto investors,” said Jesse Powell, chief executive and co-founder of Kraken, who added the newly acquired company “will benefit from access to our wider portfolio of products as they seek to broaden their engagement with digital assets.”
Kraken has benefitted from an explosion of interest in the crypto space this year, with its existing staking business experiencing growth of 950 per cent to nearly $16bn in November. Staked, which helps investors to earn yield by staking and lending tokens, will allow Kraken to increase its offering with a company statement adding that the platforms share a common “mission.”
Projects which use a proof-of-stake consensus mechanism to secure their underlying blockchain choose a group of miners at random to validate transactions. The more tokens that a miner stakes on the network the higher their chance of being selected to validate transactions and earn rewards.
Staking is considered a risky practice because investors may have to lock up tokens for a minimum period of time. Given the volatility of many crypto projects the diminished value of holdings could outweigh the benefits of rewards earned.
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