A $67 billion Pharma Giant is using VeChain to power its supply chain

A good few months after Coinbase announced staking for US customers, it’s finally come to the UK.

So you can now stake your Tezos on Coinbase if you live in the UK (or France, Spain, or The Netherlands).

Which is a super easy way for people to earn a decent interest on their crypto.

If you already stake Tezos yourself, you’ll know it pays out around 7%-9%, with the rewards hitting your wallet every three days.

However, you’ll probably also know that it’s not exactly easy to set up.

Sure, if you’re a crypto veteran, it’s fairly simple. But if you’re just getting started, there’s a lot to get your head around.

Cue Coinbase. As you probably know Coinbase is the biggest and most trusted Crypto exchange and custodian around.

Consumers and institutions alike trust Coinbase with their holdings for two main reasons.

1. They make buying, storing, trading and selling crypto extremely easy. Like “it just works” easy.

2. They are an extremely legitimate company, which is fully financially-regulated and insured. They are pretty much the most legitimate company in the entire crypto space.

So, the fact that Coinbase now offers Tezos staking, with automatic setup, is major news.

Of course, Coinbase isn’t perfect. It has many detractors. And there are numerous stories of people having trouble with their customer services.

It also notoriously “goes down” when big market moves happen, which can be extremely frustrating for people.

And if you’re based in the UK, when you fund your account, your money is subject to a five-day delay.

You can fund your account and buy crypto the same day. But if you want to move that crypto off of Coinbase, you need to wait five days.

And to top it all off, Coinbase charges pretty high fees for buying and trading crypto. Its fees are 14.9 times higher than the cheapest UK crypto exchange.

So don’t get me wrong. I don’t think Coinbase is perfect, or even great. But it does provide an important service.

And for many people the peace of mind it gives them and the ease with which then can use it makes its high fees well worth it.

Case in point: Tezos staking.

Coinbase’s official announcement states:

With Coinbase staking rewards:

• You can begin earning rewards on your crypto. The current estimated annual return for Tezos staking on Coinbase is ~5%. You’ll see your pending rewards increase in real-time in the app, and once your initial holding period completes (35–40 days), you’ll receive rewards in your account every 3 days.
• You will always maintain control. Your Tezos always stays in your account; you just earn rewards while keeping your crypto safely on Coinbase. You can opt out any time you want.

Wow a 5% reward is great. It’s a lot more than you could get with pretty much any other financial product right now.

But if you’ve been paying attention, you’ll probably notice a bit of a discrepancy there.

Doesn’t Tezos staking usually return around 7%-9%?

So where’s that other 2%-3% going?

Well, if you do a little digging, you can discover that Coinbase charges a whopping 25% fee (they call it a commission) on your staking rewards.

So yes, you’re getting a great return. But you could be making 25% more if you did the staking yourself.

Is that 25% commission worth it? I would say it entirely depends on your circumstances and level or expertise.

For many people it probably is. And don’t forget that’s on top of any price increase in Tezos itself.

Year to date, Tezos is up over 110%.

So the difference between 5% and 7%-9% on top of 110% may not seem that significant. But over time, the difference in compound interest could be huge.

If Tezos staking is the spark, Ethereum staking will be the explosion

Something else also caught my eye in the Coinbase release.

They say that “Since the US launch of staking rewards, customers have earned over $2 million in Tezos staking rewards.”

That is no small number. And Tezos staking has only been open to Coinbase US customers for around six months.

So Coinbase could be paying its customers in excess of $4 million a year in Tezos staking rewards.

However, this is a drop in the bucket compared to how much it will soon^tm be paying out in Ethereum rewards.

If you’re a regular reader, you’ll know that Ethereum 2.0 is scheduled to launch later this year (more on that here).

And with it will come staking rewards on Ethereum.

Given that Ethereum’s market cap is around 12 times the size of Tezos, there could be a lot of “free” money coming to Ethereum stakers.

(Although, I should also note that Ethereum’s staking rewards are set to be only around half of Tezos’. So maybe 4%-5% instead of 7%-9%.)

But the thing with Ethereum staking is it will be much more difficult for the average holder to setup than Tezos staking is.

For a start, you’ll need at least 34 Ethereum to stake on your own, and if you don’t have that much you’ll need to join a staking pool.

The penalties for messing your staking up will also be higher. So if you’re staking yourself you’d better be sure your internet connection is rock solid.

So handing over 25% to Coinbase for them to take care of it all for you will probably seem like a much better deal when staking Ethereum.

Given all this, I imagine the demand for Ethereum staking through Coinbase will be much, much greater than demand for Tezos staking.

But more than that, I imagine “institutional” demand for Ethereum staking – whether through Coinbase or not – could also be extremely high.

After all, Ethereum is much more well-known and trusted by the “normies” than Tezos.

To give you an idea of just how big Ethereum is, back in 2017, many people thought Ethereum would even flip Bitcoin and become the number one crypto by market cap.

That’s why Ethereum 2.0 is such a big deal for crypto investors.

And that’s not even taking into account the other benefits it will bring – namely much, much higher transactions per second… which will make it much, much more useable for important applications and could lead to it becoming the base layer of “the next internet.”

So while the cryptosphere’s eyes are all looking at Goldman Sachs’ latest denunciation of Bitcoin and its subsequent rally, there is, as always, a lot going on behind the scenes.

And speaking of big things going on behind the scenes, there’s just one more story I think it’s worth highlighting this week.

$67 billion Pharma Giant Bayer is using VeChain to power its supply chain

If you used to read my writing back when I was an Editor at Southbank Investment Research, you’ll probably know VeChain was one of my top cryptos to watch.

There was a period in 2019 when it was crushing everything….

Partnerships with two of the Big Four accounting firms… Walmart China using it in its supply chain… and BMW building its VerifyCar project on top of it.

Recently, I haven’t seen much about VeChain. Although last November it popped 63% when the French and Chinese presidents ate one of its products, as I covered here.

Well, never one to go small. This week it emerged that Big Pharma Giant, Bayer is using VeChain to power its drug supply chain. Or at least Bayer China is.

From CoinDesk:

One of the largest pharmaceutical companies in the world is working with VeChain to develop a new blockchain-based traceability platform.

Bayer China revealed in an interview Thursday it had chosen VeChain as tech provider for a new blockchain-powered solution that will allow the firm – a branch of Bayer – to track clinical drugs across the supply chain.

Known as “CSecure,” the system loads a batch number relating to a specific drug onto the blockchain. Each drug can then be tracked as it moves across the supply chain, using timestamps and user-identification information at different waypoints. Because of the immutable nature of the blockchain, the data can’t be changed by a non-permissioned third party.

Since that news broke on Thursday, VeChain is up 13%, while the rest of the market is up 3.7% over the same time period.

So just because there hasn’t been too much major news about VeChain of late, it’s clear that it hasn’t stepped its foot off the gas.

And given the increased tensions between China and the West over the latest developments in Hong Kong, Taiwan and India, China is likely to favour a Chinese-based crypto like VeChain for any major projects over a more Western crypto.

Which could mean VeChain landing some even bigger fish than it already has done.

However, by the same token, it may face hostilities from the West if tensions continue to increase.

So it’s an interesting one.

Okay, that’s all for this week.

If you thought this article was worth a pot of tea, you can buy me one here.

Thanks for reading.

Harry