The Proof of Stake Alliance (POSA), in partnership with Paradigm Policy Lab, put forward a new set of best practices for staking with the goal of ensuring “customer protection and responsible innovation in the staking space” on Thursday, November 9th.
A collective goal
“Our collective goal is to ensure that staking is better understood, and that technical services related to staking and block production are treated similarly to operating any other technical service providers,” the updated principles read in part.
This is the first update to the list of principles since it was published in 2020.
Over eighteen key industry leaders partnered with the Proof of Stake Alliance in order to improve the standards, including Coinbase, Rocket Pool, Lido, Blockdaemon, Luganodes, Obal Labs, and Kiln Finance.
“Amid rapid technological advancement, self-regulation from leaders of the proof of stake ecosystem is essential,” commented Evan Weiss, Founder of the Proof of Stake Alliance and Head of Business & Policy at Alluvial.
Three key principles
The best practices are composed of three standard principles emphasizing the need for service providers to effectively communicate relevant information to stakeholders, ensuring users have control over their assets, and highlighting the importance of having “explicitly defined” roles for service providers.
In particular, the document distinguishes staking from comparisons to lending and yield farming, claiming that “staking is about securing PoS blockchains, which depend on the technology for their security and accuracy.”
The updated best practices come at a time when discussions surrounding the need for regulations in the wider crypto industry as a whole have been spotlighted.
The list of principles was developed in part by Paradigm Policy Lab, whose mission is to bring together “academics, policy experts, lawyers, and technologists to produce cutting-edge research, commentary, and advocacy on the most critical policy issues facing crypto and other frontier technologies.”
“Paradigm appreciated the opportunity to partner with POSA, staking firms, and protocol devcos to develop these principles. They provide an excellent guidebook to policymakers,” said Alex Grieve, Government Affairs Lead at Paradigm.
“Focusing on areas such as emphasizing security and participation, refraining from investment advice, using non-financial terminology, and not providing guarantees on rewards earned, these forward-looking principles are aimed at aligning organizations around best practices, fostering self-regulation, and effectively communicating with regulators to ensure a proper understanding of staking as a technical service, separate and distinct from financial activities,” concludes the document.
The post Proof of Stake Alliance Updates Best Practices, Signed by Coinbase, Paradigm, and More appeared first on Cryptonews.