Staking on centralized exchanges is very disadvantageous for coin owners. They bear most of the risk associated with the loss of coins and let third parties profit. Yet the exchanges carry minimal risk and the CEO may decide to handle the coins differently than promised. With the advent of regulation, particularly in the US, Staking-as-a-Service (SaaS), provided by exchanges, is becoming more problematic. People should understand that ADA coins are the key to decentralizing Cardano. The project is deliberately designed so that people do not need unnecessary and unreliable intermediaries for financial transactions. It is not even necessary to rely on regulators and laws for staking. Staking is a financial operation. It should ideally be a Peer-to-Peer business between a staking pool operator (SPO) and a delegator. Believe that in the past CeFi services went bankrupt while DeFi and the protocols worked exactly as they had written in their source code. Let’s take a look at the biggest differences between using a SaaS service and delegating ADA coins from your own wallet.
- The design of the protocol is deliberately devised to allow it to support its own needs as well as the needs of stakers and SPOs.
- ADA holders that stake coins on centralized exchanges give up control not only of the coins but also of the Cardano network.
- Regulators are tasked with protecting the assets of people who entrust them to a third party. ADA holders don’t need third parties.
- ADA holders should realize that if there is any attack on Cardano through the exchanges, they will be the ones who lose their property.
- The ADA holder decides what pool they delegate to, can vote in Catalyst, can participate in ISPO, can use DeFi, and can spend coins at any time.
- Exchanges only ever do what is profitable for their own business and have no economic interest in supporting the ecosystem. ADA holders can support the ecosystem.