NIX’s trustless LPoS staking

https://nixplatform.io/

About NIX

NIX Platform is a next generation privacy currency and multi-layered interoperability platform which fuels anonymity-focused decentralized applications (dApps).

What is staking ?

Staking consists in holding a cryptocurrency in a wallet for a fixed period, then earning interest on it. The reward you earn from staking varies depending on the length of time you hold it. The longer the stake duration, the higher your returns.

It’s similar to a fixed deposit in the traditional banking system which rewards you with a defined interest at the end of the period, as stipulated in the contract.

LPoS (Leased Proof of Stakes) as consensus algorithm

Any blockchain uses consensus algorithms to decide which chain of blocks is valid and to ensure there are no double-spending on the distributed network. There are mainly two different types of consensus algorithms: Proof-of-Work (PoW) and Proof-Of-Stakes (PoS).

NIX platform uses LPoS (Leased Proof of Stakes) which is an enhanced version of Proof-of-Stake. In a regular PoS system, each node that holds a certain amount of cryptocurrency is eligible to add the next block to the blockchain. In the LPoS system, users can lease their balance to full nodes. With LPoS, the user will have the ability to Lease NIX from the wallet to different contractors which can pay a percentage as a reward.

How to stake NIX

So you are interested to stake some NIX ? First step is to create a NIX wallet. Your address must begin with either “N” or “nix1” to be compatible with staking. Addresses beginning with “nix1” are eligible to vote, while “N” addresses are not.

Then there is two different methods to stake NIX:

  • Independant PoS staking: stake NIX yourself by using an encrypted wallet that you will keep unlocked, synced with the network, and remain open and running. Note that you must leave your wallet open 24/7 in order to actively stake your coins.
  • LPoS Merchant staking: Lease your coins to a merchant to stake using LPoS contract. You can also utilize LPoS contracts to cold stake your own coins in a much safer environment.

Pros and cons to LPoS using merchant

The advantage of using a merchant to receive staking rewards is that you don’t have to worry with the technicalities of keeping a wallet open, updated and unlocked. If you’re concerned about security, note that the merchant has no ability to move, spend, or otherwise do anything with contracted coins other than actions that are directly related to staking such as creating new blocks.

The disadvantage is that you will have service fees (between 4% and 10% depending on providers).

Some useful links

Nix wiki: where you will find all useful informations about the project.

Nix marketplace: where to find independent merchants who offer NIX related products and services

Nix UI wallet

Nix Github

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