What is cryptocurrency staking?
Defi staking platform development
Staking is an activity in which a user locks or holds their funds in a cryptocurrency wallet to participate in maintaining the operations of a proof-of-stake (PoS)-based blockchain system. It is similar to cryptocurrency mining in that it helps a network achieve consensus while rewarding users who participate.
When gambling, the right to validate transactions is divided into how many coins are "locked" within a wallet. However, like mining on a PoW platform, stakeholders are incentivized to find a new block or add a transaction to a blockchain. In addition to the incentives, PoS blockchain platforms are scalable and have high transaction speeds.
Mining vs. staking
Meanwhile, staking is mainly used for proof of stake (PoS), as in Ethereum 2.0 : Ethereum's switch from PoW to PoS in the consensus mechanism.
Mining: miners solve tricky math puzzles, while staking: network nodes engage in validating new blocks by locking their funds.
Mining: The first miner to solve the math puzzle adds a block to the blockchain, while in staking the nodes validate a new block by locking the native tokens in a smart contract.
Mining – requires specialized mining hardware (e.g. a GPU ) which consumes a lot of power, compared to staking which is widely considered to be a more sustainable and environmentally friendly method, saving over 99% of power consumption.
Mining: more computational power (work), higher probability of solving the block and being rewarded, compared to staking in which the more native tokens are staked (stored value), the more likely it is that you will be selected to validate new blocks.
What can I bet on?
Thanks to the growing popularity of staking, there are tons of options for users who want to earn passive income from their idle crypto assets. We will briefly cover some of the top cryptocurrencies offering staking rewards right now:
Ethereum 2.0
One of the most popular staking options is Ethereum 2.0, as Ethereum is the second most popular cryptocurrency platform to date. And if you invest in ETH, you can essentially help the system thrive by becoming one of its early validators.
To bet on ETH 2.0 , you must own a minimum of 32 ETH, as well as be a customer of the Eth1 mainnet. Start by heading over to the Eth2 Lauch Pad .
Of course, if you closely followed the explosion of the DeFi industry in 2020, you know that much of its growth can be attributed to the staggering potential rewards yield farming protocols operating like ERC20 tokens offer to investors. . We discuss this shortly in more detail.
Tezos (XTZ)
Tezos was born in June 2018, causing a major stir with its largest initial coin offering (ICO) to date with over $230 million in investment. It implements a version of PoS called liquid proof of stake (LPoS).
The native currency of Tezos is called XTZ and it calls the staking process, "baking". Bakers are rewarded using the native currency. Furthermore, malicious bakers are sanctioned with the confiscation of their bet.
Icon (ICX)
The complex Korean blockchain project Icon (ICX) \ offers another platform that allows native gambling. However, Icon differs from Algorand and Tezos in that it uses the No-Stake (DPoS) consensus algorithm.
Staking stablecoins
Staking stablecoins is a great way to maintain your funds in the current low interest rate environment and earn returns, while avoiding market volatility. Here are some of the stablecoin returns on major exchanges:
USDC : 3.49% on Binance, 0.15% on Coinbase, 3.23% on OKEx
Exchanges have naturally jumped into the betting business, thanks to the sheer number of users on their platforms.
Major cryptocurrency exchanges that support staking include but are not limited to:
Binance
Defi staking platform services
Therefore, many investors go to their lists when they contemplate betting through trading platforms. In line with this, Binance 's staking service for Ethereum 2.0 came to life in December 2020.
Also, the exchange supports DeFi staking, where it supports cryptocurrencies such as DAI, Tether (USDT), Binance USD (BUSD), BTC and Binance Coin (BNB)
Coinbase
Aside from the ETH 2.0 stake, other coins put up for staking on Coinbase include ALGO and XTZ.
Cold / Private Wallets
This way of betting is also called cold betting. However, a punter has to keep the coins staked in the same direction as moving them breaks the lock-in period, consequently causing them to lose the rewards for staking.
Private/offline cryptocurrency wallets that support staking include:
different charges for betting.
The platform has the capacity to allow you to bet on more than 50 cryptocurrencies with support for on-chain staking.
DeFi staking
To check DeFi staking returns, head over to the staking calculator webpage .
Maker (MKR) – The platform allows users to borrow stablecoins against a volatile cryptocurrency like Bitcoin. Its popularity has made it one of the prominent decentralized finance protocols on the Ethereum blockchain (currently number one in total volume locked (TVL) as of January 2021). Notably, DAI is the main stablecoin on the network. Yield farmers therefore deposit the DAI that is loaned to borrowers, while receiving rewards for the interest charged on the loans.
