Celsius, a bankrupt crypto lender, has transferred $75 million of ether (ETH) to staking service Figment. The move comes as Celsius is looking to generate yield on its assets while it remains in bankruptcy.
Staking is a process of locking up cryptocurrencies in order to earn rewards. In the case of ETH, stakers are rewarded with new ETH tokens that are minted as part of the Ethereum network’s proof-of-stake consensus mechanism.
Celsius’s move to stake its ETH is a sign that the company is looking to generate yield on its assets while it remains in bankruptcy. The company has been facing financial difficulties since it paused withdrawals in June 2022.
Celsius is not the only crypto lender that has been looking to generate yield on its assets. Voyager Digital, another crypto lender that is facing financial difficulties, has also been looking to stake its assets.
The staking of crypto assets is becoming increasingly popular as more and more cryptocurrencies move to proof-of-stake consensus mechanisms. Staking can be a profitable way to generate yield on crypto assets, but it is important to do your research before staking any assets.
It is important to note that staking is not without risks. If the underlying cryptocurrency fails, you could lose your staked tokens. Additionally, if the staking service is hacked, you could lose your tokens.