Cardano Founder Charles Hoskinson speaks on a possible solution for the staking programs after the settlement between the Securities Exchange Commission (SEC) and crypto exchange Kraken in the U.S. The question of how these products can survive and continue to generate rewards for American users has surfaced following these events.
Can the crypto industry find a solution to generate returns under the jurisdiction of the SEC and the tightening regulatory policies in the U.S.? Hoskinson tried to answer this question in a recent video uploaded to his YouTube channel.
Can Cardano Provide The Solution For The Disease?
Charles Hoskinson, the founder of Cardano, addressed the case of staking programs and suggested that staking models need to change to avoid regulatory feuds and improve staking services.
According to Hoskinson, Cardano is discussing introducing a new concept of a new staking model certificate called “contingent staking.” This new mechanism will allow staking pool operators (SPOs) to choose which users are allowed in the pool to comply with U.S. regulatory laws.
Cardano’s concept is based on a proof of work principle, where there is a bilateral consensus between the pool operator and the user interested in being part of the staking services, not only for regulatory purposes but also to “improve the distinction and work system in the staking programs.”
This contingent concept will drastically change the relationship between SPOs and participants from a non-consensual push of staking contracts to a bilateral relationship. In this new mechanism, the operator can decide and confirm the transactions of the coming participants and sign a contract to accommodate regulatory nuances, according to Hoskinson.
Furthermore, Hoskinson stated that if the regulatory system goes in the wrong direction for the crypto industry, the contingent stake could provide the solution for running the stake pools in the U.S.
The Cardano founder addressed the case between Kraken’s staking services in the U.S. and the SEC. Hoskinson stated that now that this case has exposed regulatory enforcement by the SEC, the community will get more involved in finding a solution.
In short, The Cardano founder said that the current enforcement law applied in the crypto industry by the U.S. government is a “counterproductive way of conducting financial business.” If the landscape remains unchanged from the regulatory side, tSPOs will have to find a solution for the staking programs.
After the sideways price action of Cardano in recent weeks, ADA, like most of the cryptocurrency ecosystem, retraced after the SEC and Kraken settlement on February 9th.
ADA is trading at $0.359, down 1.8% in the last 24 hours and 9.8% in the previous seven days. If ADA fails to lean on the current support level of $0.350, it may suffer further retracement price action and could find support at $0.326.
Featured image from Unsplash, chart from TradingView.