KR1 plc - Revenue from Polkadot Staking Yields
("KR1" or the "Company")
Revenue from Polkadot Staking Yields
(KR1:AQSE), a leading digital asset investment company, is pleased to announce that the Company has started generating material revenue from staking activities on the Polkadot (“DOT”) network, KR1’s largest investment and portfolio holding to date.
Following the migration of Polkadot to a ‘Proof-of-Stake’ network on , the Company’s staking activities are generating revenue on an ongoing basis in Polkadot’s native DOT digital assets. To date, KR1 has generated a total of 530.67 DOT. The Company is also pleased to announce that it has realised the accrued revenue from staking yields thus far, realising 530.67 DOT at an average price of US per DOT for a total of US .
Similar to the previous ‘Revenue from Cosmos Staking Yields’ announcement on , Polkadot is a ‘Proof-of-Stake’ network that, unlike ‘Proof-of-Work’ networks, such as Bitcoin, does not require enormous computing power and energy consumption to guarantee the security and censorship-resistance of the network. Instead, holders can stake their DOT as a ‘security deposit’ to participate in block creation, network maintenance and securing connected Polkadot ‘parachains’. The holders of staked DOT then receive a native network reward or yield for committing their DOT for validation of transactions across the Polkadot network. The revenues generated from these activities are referred to as ‘staking yields’.
Staked digital assets in ‘Proof-of-Stake’ networks carry certain unique risks, specifically, ‘slashing’. Slashing occurs when certain network participants are automatically penalised by the network if the network’s health is compromised by major technical issues, internal attacks or cyber-attacks.
Staking yields that the Company is generating on the Polkadot network are subject to specific network conditions and could range from a minimum of 2.5% yield, up to a maximum of 40% yield on staked DOT. Given the early stage of the Polkadot network and potentially rapidly changing network conditions and parameters, it is currently not possible to provide useful estimates as to how many DOT the Company is going to generate on an annual basis but the Company will provide updates on any revenue in future announcements.
The staking activities do not impose any overhead or additional operating costs to the Company. KR1 has been staking and will continue to stake a substantial majority of its DOT holdings with a trusted and secure third-party staking service provider.
It should also be noted that the Polkadot network will undergo a re-denomination event on , where 1 ‘DOT (old)’ is going to be split into 100 ’, similar to a traditional stock split. The percentage ownership of DOT relative to total supply will remain unchanged and it will not impact the value of any DOT position as DOT holders still own the exact same share of the network as before. With the re-denomination event, DOT holdings are increased by a factor of 100 (i.e. the above 530.67 ‘DOT (old)’ would become 53,067.08 ’), while, at the same time, the USD/DOT price will be decreased by a factor of 100 (i.e. the above price of US per ‘DOT (old)’ would become US per ‘’). Certain digital asset exchanges like Kraken or Binance have already opened their markets and are quoting the DOT price post-re-denomination.
, Managing Director and Co-Founder of KR1, commented:
“It’s been an incredibly exciting journey having watched Polkadot’s gradual launch over the past few months, from getting started with an experimental ‘canary’ network Kusama, Polkadot’s wild cousin, to the switch over to a permissionless Proof-of-Stake blockchain, governed by its stakeholders, and finally, yesterday’s DOT transferability that was voted in by the community.
Truth be told, we believe that this is only the beginning. There is so much more brewing for Polkadot, from technology upgrades to follow soon that will enable different blockchains to communicate with each other while sharing the same security guarantees, to further advances in scalability and much more. Also, the and Parity Technologies are not alone with Polkadot. There is a buzzing ecosystem from of projects building protocols and applications on top of Polkadot’s technology. Starting with Acala and Moonbeam tackling the ecosystem; going on to Edgeware and Plasm that are aiming to onboard lots of developers with their smart contract and scalability work; and projects like Interlay or ChainX, pushing to get more and more assets bridged into the Polkadot ecosystem in various ways.
Seeing the first revenue coming in from Polkadot staking yields is a huge validation as Polkadot joins Cosmos as the second yield-bearing asset generating material revenue in KR1’s portfolio, which puts the Company on an even stronger footing for the future.”
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KR1 is a leading digital asset investment company supporting early-stage decentralised and open-source blockchain projects. Founded in 2016 and publicly traded in (KR1:AQSE), KR1 has built a notable reputation for generating significant returns by investing in many key projects that are designed to power the decentralised platforms and protocols emerging to form new internet infrastructures.
Market Abuse Regulation (MAR) Disclosure
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via a , this inside information is now considered to be in the public domain.
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KR1 PLC Peterhouse Capital Limited Nominis Advisory Ltd George McDonaugh Keld van Schreven Simon Nicol Mark Anwyl Allie Feuerlein Angus Campbell[email protected][email protected]
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