Coinbase is charging people 25 percent to stake Tezos (XTZ) on its platform, which has left many users outraged and demanding answers.
Staking is apparently the hot trend in the cryptocurrency world, but exchanges are apparently asking for a bigger piece of the rewards. Despite COINBASE being among the largest, most trust exchanges in the entire industry, it is still charging a whopping 25 percent commission on Tezos (XTZ) staking. Staking was officially rolled out by the exchange in November of last year.
The high fees are causing significant outrage since noticed as a minor detail in the company’s explainer on Tezos staking. Section 5.4.2 reads that “Coinbase will distribute this reward to you after receipt by Coinbase, minus a 25% commission.” Such excessive fees are usually something one would expect from the banking world.
LMAO at Coinbase charging people 25% to bake their tezzies. pic.twitter.com/Q2WrSQSsXD
— Charles (@CryptoCharles__) February 16, 2020
The response to the 25 percent fee has been widespread outrage and, in some cases, mockery of Coinbase’s practices. As one user writes, at least the UI for the exchange’s staking services is snazzy — despite the exorbitant commission rate.
Others seemed confounded over why would Coinbase even do this. Not only does it hurt their business, but it’s so excessive compared to other exchanges. It is not like Coinbase is a struggling exchange either — in fact, it leads the entire market in Bitcoin (BTC) under custody. As BeInCrypto reported in December, Coinbase holds more than 966,230 BTC ($7B) in its cold wallets. Clearly, the exchange has ample clients and does not need to dissuade XTZ holders with 25 percent commission rates for staking.
Thus far, Coinbase has not responded to criticisms over its commission rate.
Coinbase has remained a fixture of the cryptocurrency industry for years now, but it has not escaped the ire of some traders over the years. Although assuming authority over the industry, its Crypto Ratings Council green-lit Telegram’s GRM token despite its legal status being disputed by the U.S. Securities and Exchange Commission (SEC). Coinbase has nonetheless continued its expansion and seems financially healthy, which makes the 25 percent commission rate especially flagrant.
