How to Stake FOIN up for 11% Annual ROI?
FOIN allows receiving a passive income with up to 11% of annual interest. It is possible because of the Proof-of-Stake algorithm. How does it work and what is the procedure of getting rewards? Let’s see step-by-step.
A Brief Look at PoS
PoS (Proof-of-Stake) along with PoW (Proof-of-Work) is a type of consensus algorithm for cryptocurrencies. It creates new blocks that are added to the blockchain. These blocks are staked by a person who is already holding some coins and helps in validating a new transaction on the platform. It requires users to stake an amount of their coins for validating blocks of transactions. Validators are rewarded for it in return.
How Does It Work?
In simple words, crypto holders get extra benefits only by putting a certain amount of coins in their wallets. So, it can be equalized with gaining dividends or interest on savings.
Key insights of staking coins:
- Not every cryptocurrency is suitable for staking, the user should choose those currencies which generate new blocks through Proof-of-Stake.
- The user decides what amount of coins to stake, puts it in the crypto wallet, locks these coins for stake and holds them for a certain period.
- Cryptocurrency wallet must be running and connected to the internet around-the-clock.
What is the Reason for Staking FOIN?
FOIN allows to stake assets with up to 11% of annual ROI guaranteed by the blockchain. The mechanism is the same: users lock their coins in their wallet and use these locked up coins as a trust indicator. The amount of staking benefit depends on the sum of locked up coins: the more coins they are actively staking, the bigger their weight in the network is. As a result, they are earning more coins from staking.
ROI also depends on the quantity of staking users: for example, if 100% of the coin owners are actively staking the coin, all of them will receive 1.16% from the total supply, distributed proportionally according to their share in the network. This is possible because the FOIN network has a fixed reward per block: it is set to generate a new block in average every 90 seconds with a reward per block of 3 FOIN. That translates to roughly 1.16% inflation per annum.
In other words, the fewer people actively staking, the bigger the rewards for those few coin owners is — see the calculation below.
What Is the Reward for FOIN: Staking Simulation
Let’s have a look at the example of ROI calculation. It shows the maximum possible rate of reward.
Imagine that you’ve got 10,000 FOIN actively staking since January 1st, 2019. In the same time, 10% of FOIN network stakes their assets.
In this case, according to the cryptocurrency industry data, the ROI in 2019 will be at the rate of 11.5452%.
So, on January 1st, 2020 you will have 11,154.52 FOIN.
Below you can see the table with ROI rate depending on the share of actively staking FOIN holders.
How to Stake FOIN: Quick Tutorial
You should be conscious that the wallet needs to remain open and unlocked for staking to receive a reward. If you want to encrypt your wallet, please follow the next two steps, otherwise, go straight to the 4th point of the tutorial.
2. Encrypt your wallet by your own passphrase.
Keep your passphrase secure, for example, written on a paper in a safe place.
3. To stake an encrypted wallet, go to Settings, choose “Unlock Wallet”.
Enter the password and check the “For staking only” checkbox.
4. Back up your wallet through the File menu.
It should be done strictly after encrypting. You will get back up .dat file.
5. Replenish your wallet with FOIN.
6. Unlock your FOIN wallet for staking. Once the coins are “mature” enough, meaning they have a specific number of confirmations, they can be staked.
7. Notice, that your FOIN wallet must be running and connected to the internet 24/7.
8. Now you are ready for getting extra FOIN as a reward.
