Introducing Native Staking on the Hyperliquid Mainnet
Hyperliquid, a leading DeFi protocol, has successfully launched native staking on its mainnet. This exciting development allows holders to receive rewards for securing the network. According to a recent announcement, users can now pick validators to stake tokens based on various metrics such as uptime, commission, reputation, and community contributions.
The Feature Debuts with 16 Validators
The native staking feature debuted with an impressive list of 16 validators. This marks a significant milestone for Hyperliquid, solidifying its position in the DeFi landscape. Users can now participate in securing the network and earning rewards in return.
What is Native Staking?
Native staking allows users to lock up tokens to support the operations of a network. In exchange, participants earn rewards, typically in the form of additional tokens. This process helps validate transactions and secure the blockchain, ensuring the integrity of the decentralized finance ecosystem.
$344 Million Worth of HYPE Tokens Staked
According to data compiled by ASXN, an impressive $344 million worth of HYPE tokens have been staked so far. This indicates a strong level of participation from the community, demonstrating their commitment to securing the Hyperliquid network.
Hyperliquid’s Native Token Airdrop: A Success Story
In late November, Hyperliquid’s native token airdrop went live, distributing 310 million HYPE tokens (31% of its supply) to the community. Since then, the price of HYPE has skyrocketed from nearly $3.90 on Nov. 29 to trade around $26.80 at the time of writing.
Token Allocation Breakdown
Hyperliquid has allocated a significant portion of its remaining token supply for future emissions and community rewards:
- 38.8% for future emissions
- 6% for the Hyper Foundation treasury
- 0.3% for grants
- 23.8% for core contributors under a one-year lock period
DeFi Reaches New Heights in December
De centralized exchanges, such as Hyperliquid, reached an impressive record high in December with a monthly trading volume of $462 billion. This surge is largely driven by anticipation of a more favorable regulatory regime in the United States in 2025.
Tax on Staking Rewards: A Growing Concern
While the industry looks forward to a more favorable environment for digital assets in the US, there are still many hurdles to overcome. Recently, the US Internal Revenue Service reaffirmed that rewards earned from staking activities do not constitute new property and should be taxed upon receipt.
Clarification on Block Rewards Classification
The agency used its 2023 guidance in response to a lawsuit over tax on staking earnings, claiming that block rewards are classified as ‘income’ from the moment they are created, taxable based on market value. This clarification highlights the need for clear guidelines and regulations surrounding staking activities.
IRS Discloses Final Regulations on Decentralized Protocols
In another setback, the IRS disclosed final regulations covering decentralized protocols. The tax watchdog classified front-end protocols facilitating crypto trading as brokers, demanding the disclosure of gross proceeds from digital asset transactions, along with details about the taxpayers involved.
Implications for DeFi Community
This development raises concerns about the regulatory environment and its potential impact on the DeFi community. It is essential for stakeholders to stay informed and adapt to these changes to ensure a smooth transition.
Conclusion
The launch of native staking on Hyperliquid’s mainnet marks an exciting milestone for the protocol. As the DeFi landscape continues to evolve, it is crucial for projects like Hyperliquid to innovate and adapt to changing regulations. The community’s participation in securing the network and earning rewards demonstrates their commitment to this decentralized finance ecosystem.
Additional Resources
- Hyperliquid Mainnet: Learn more about the mainnet and its features.
- DeFiLlama: Explore trading volume data and analytics on DeFiLlama.
- ASXN: Access ASXN’s data compilation on HYPE token staking.
- IRS Guidance 2023: Read the IRS guidance on tax classification for block rewards.
- Decentralized Exchange (DEX) Volume: Discover more about DEX volume records and trends.
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