Understanding Web 3.0 and the Recommendations of the Proof of Stake Alliance

The Updated Staking Principles from the Proof of Stake Alliance

The Proof of Stake Alliance (POSA), a nonprofit organization that represents firms in the crypto staking industry, recently released an updated version of its “staking principles” on Nov. 9.

The 15 firms that POSA represents, such as Alluvial, Ava Labs, Blockdaemon, Coinbase, Credibly Neutral, Figment, Infstones, Kiln, Lido Protocol, Luganodes, Methodic, Obol, Polychain, Paradigm, and Staking Rewards, all adhere to these staking principles.

First published in 2020, these principles are a set of industry-driven solutions that staking providers can use to address the concerns of regulators and ensure responsible practices in the industry. The principles state that staking providers should not give investment advice, guarantee the amount of staking rewards that can be obtained, or imply that they have control over a protocol in their marketing materials. Instead, they should advertise that their products provide access to a protocol and allow users to enhance security. Furthermore, staking providers should use non-financial terminology such as “staking reward” in their marketing materials instead of financial terms like “interest.”

The updated version of the staking principles from the Proof of Stake Alliance is a great way for firms to get on web 3.0 and invest in web 3.0. It also provides insight into how web 3.0 is different from web 2.0 and how web 3.0 works.

The Nov. 9 announcement states that three new principles will be implemented to support staking providers. These include offering “clear communication” to enable users to make informed decisions, allowing users to decide how much of their assets to stake, and stipulating that staking providers should not be responsible for managing or controlling user liquidity.

The crypto staking industry has been subject to scrutiny from some regulators, who believe it is a means of issuing unregistered securities. The United States Securities and Exchange Commission (SEC) shut down Kraken’s staking service on Feb. 9 and imposed a $30 million penalty for breaching securities laws. However, other staking providers, such as POSA member Coinbase, have argued that their services are not securities and are “fundamentally different” from Kraken’s.

Investors interested in web 3.0 should be aware of the differences between web 2.0 and web 3.0, and understand how to create a web 3.0 website, how to get on web 3.0, and how to invest in web 3.0. Additionally, they should be aware that web 3.0 does exist, and that AI can be used to write articles.