POSA Publishes Two White Papers

On February 21, a collection of white papers was released by the Proof of Stake Partnership (POSA), a nonprofit industry organization. These white papers investigate the legal status of deposit tokens in regard to their respective subfields of the law, namely securities law and tax law, within the framework of the securities legislation and tax law of the United States, respectively. Contributors originating from more than ten various departments belonging to a range of industrial organizations and representatives of those departments were instrumental in facilitating the publication of these pieces.

The act of producing transferable receipt tokens on blockchains that use a proof-of-stake consensus mechanism as their method for obtaining network consensus is referred to as liquid staking. Liquid staking is also known as proof-of-stake consensus. In the context of cryptocurrencies, this activity is referred to as "staking." The statement that inspired the term "liquid staking" also gives its name to the practice, which is referred to as "liquid staking." In order to establish ownership of cryptographic assets that have been staked or prizes that have been received for the purpose of staking, these tokens are put into circulation and employed in the process of establishing ownership of those assets. Staking the tokens itself is one method for accomplishing this goal. The POSA is opposed to the description of "liquid staking derivatives" because, according to their argument, it paints a false picture of the qualities that are associated with the tokens. The POSA stated that the tokens should now be referred to as "liquid staking tokens," and they advocated for this change as a direct result of the event that took place. Since the Ethereum Merge took place, there has been a perceptible increase in the number of people who are contemplating taking part in liquid staking. This boost in interest comes as a direct result of the Ethereum Merge.