Yesterday, the SEC filed a complaint against Kraken, alleging it sold unregistered securities via its Staking service. Kraken has now agreed to settle with the SEC for $30 million, and shut down its Staking program for U.S. customers.
Naturally, some of our community members wanted to understand how this would affect Cake DeFi.
Here are 5 crucial points, how Cake DeFi's Staking service is inherently different since its very beginning in 2019:
1. Cake DeFi's Staking rewards are determined by the underlying blockchain protocol
A main point in the SEC's complaint is that Kraken determines the reward it gives to its customers itself. At Cake DeFi, we simply forward the Staking rewards we receive as a technical agent to our customers, minus our transparent service and node fees.
We NEVER promise any other rewards or yield other than what the blockchain pays out. The yield shown on our website is exactly what the customer is receiving from the protocol: https://cakedefi.com/staking
2. Full transparency via on-chain data
Every single step in the staking- and unstaking-process can be verified on-chain on our transparency page or a user’s dashboard.
Nothing is in a black box. You can track the nodes, the rewards and every step along the way. Trust, because you can verify: https://cakedefi.com/transparency/
3. Cake DeFi does not pool customer assets to satisfy blockchain minimum requirements
Cake DeFi does not use customer funds to spin up new nodes or to meet other blockchain requirements. Instead, everything is pre-funded by Cake DeFi, and Cake DeFi’s customers merely obtain a slice of a node when they use Cake DeFi’s staking service. Their coins are instantly put to use, and they transparently see their share of the rewards from the moment they stake until they unstake when Cake DeFi takes back that slice.
4. The customer decides when to stake and unstake the coin of their choice
Our customers decide when they want to stake or unstake the coin of their choice anytime. Cake DeFi does NOT make any decision for its customers.
In the case of Ethereum, which currently still has a lock period until the Shanghai upgrade, we use the liquid csETH token that can be traded anytime on the open market, independent of Cake DeFi: https://defiscan.live/dex/csETH
5. Strict segregation of funds
Customer assets and Cake DeFi’s company funds are clearly segregated. At no point in time, does a customer transfer legal ownership of their staked assets to Cake DeFi. These funds belong to you, even in the highly unlikely event of a bankruptcy.
We support regulations that protect consumers and provide clarity for companies operating in this space. That is why we are based in Singapore, which is a front-runner in crypto regulation.
If you have any questions or concerns, please let us know on Telegram: https://t.me/CakeDeFi_EN
Stay sweet and start staking with Cake DeFi now: https://app.cakedefi.com/register
Your Cake DeFi Team.