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liquidity

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Bloomberg: After $6.3 billion was stolen, Binance increased some market maker commissions to stabilize liquidity

According to Bloomberg, after Binance experienced a record $6.3 billion hack, it has increased incentives for some market makers trading on the platform to boost trading activity. Sources familiar with the matter revealed that shortly after the security breach, the company reached out to smaller trading firms to offer higher commissions in the spot and futures markets.Sources indicated that during this week-long initiative, so-called level 2 and level 3 market makers would receive the same commission rates as level 4 participants, which is the highest tier on the platform. The sources added that these changes are aimed at providing greater financial incentives for smaller liquidity providers to quote on the trading platform and maintain a deeper order book.According to information on its website, Binance primarily categorizes market makers into different tiers based on the liquidity they provide, with companies offering larger trading volumes qualifying for higher tiers, typically receiving larger commissions, thereby reducing their trading costs. A Binance spokesperson stated that the latest measures following the security breach help to calm the market and noted that, just as prioritizing clear communication is important, the company took immediate action to maintain its core competitive advantage in liquidity. According to data from Talos, within 24 hours after the hack, the depth of the Bitcoin order book on Binance dropped by about 30%, with the depth within a 1% price range falling from $45 million to $32 million.

The amount of Ethereum staked has reached 43.8 million coins, setting a new historical high, while the annualized yield for Q3 has dropped to 2.63%

According to CoinDesk, Bitwise's fourth-quarter staking report shows that the amount of staked Ethereum has reached 43.8 million ETH, accounting for 35.9% of the total supply, setting a new historical high; the net staking inflow in the third quarter was 1.99 million ETH, maintaining net inflows for six consecutive quarters. The active staking amount for Solana has increased to 440.5 million SOL.However, the staking yields for both networks have declined. The average annualized staking yield for Ethereum in the third quarter dropped from 2.81% in the second quarter to 2.63%, with 96.3% coming from ETH issuance. The gross staking yield for Solana fell from 6.38% to about 6%, with nearly 90% still coming from token issuance.The above data has not deducted service provider fees and does not equate to the actual yield received by clients. Coinbase stated that staking ETFs and digital asset treasury are broadening participation channels. Kean Gilbert, head of institutional relations at the Lido Foundation, pointed out that after custodial institutions support staking, institutions can participate through existing custodial relationships, and the current discussion has shifted to implementation issues such as validator decentralization, code audits, and fund staking ratios. Liquidity remains a constraint faced by institutions.Gilbert stated that funds typically need to meet redemption requests within one or two days, but ETH unstaking may take weeks, so they will retain some un-staked assets. He estimates that the average staking ratio for related products in Europe is only 50% to 60%. Liquid staking tokens can provide alternative exit channels, but actual sales still depend on market liquidity and prices.
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