One of the tenets of classic cryptocurrencies such as Bitcoin is that the supporting blockchain must be decentralized and support mining operations; however, not all emerging digital currency tokens follow this paradigm. In the case of Tezos, a token that trades under the symbol XTZ, mining is not based on proof-of-work; instead, it is based on proof-of-staking, a method that is now supported by the Coinbase cryptocurrency exchange.

In proof-of-work operations, individuals who wish to mine new tokens must provide processing power, bandwidth, and electricity for the purpose of solving the complex cryptographic transactions of the blockchain. Proof-of-staking is a passive means of mining that rewards depositors for holding on to their tokens in special digital wallets. In essence, the deposited funds are used to support not only the blockchain but also the operations conducted by the development and business teams.

Staking of Tezos tokens is now available from Coinbase, and this option is backed by a financial custodian for the benefit of account holders. To a certain extend, holding on to Tezos tokens in a staking wallet is similar to earning interest from traditional savings accounts or certificates of deposit. In other words, Tezos is a cryptocurrency that offers rewards; the current rate is about 5% for individuals who hold Tezos for more than 35 days.

Tezos is not the only cryptocurrency that pays interest to depositors. USD Coin, the stable token that enjoys financial backing from investment banking giant Goldman Sachs also offers some level of interest through Coinbase accounts. As of November 6, Tezos was trading around $1.08, but it has previously traded as high as $7.12 in late 2018. This digital currency has been around since the proof-of-staking concept was introduced in 2014, but it did not become known among traders until the initial coin offering took place in 2017.

Since its launch, Tezos has run into some controversy related to the non-profit foundation that manages the blockchain. The married couple who founded Tezos was involved in a legal fight to access $233 million raised through the ICO, and this issue was not resolved until February 2018 after a legal process that lasted a few months.