BITSONIC’s Crypto Book — Staking
What is staking?
Office worker A stakes B coin and receives additional coins in exchange for it.
Concept of staking
When depositing at a bank, interest is paid at a certain rate after a certain period. Staking can also be understood as the same concept.
Staking refers to participating in the network’s operation with the issued coin by setting it not to be traded or transmitted for a certain period.
However, staking is not available to all cryptocurrencies. Staking is only possible within the blockchain network to which the Proof of Stake (PoS) algorithm is applied.
Staking rewards
Like the bank interest, staking has a consistent income.
If many users participate in staking and the amount of staking increases, the amount distributed and traded in the market decreases. It is to say that the price can increase.
Generally, traders will see charts from time to time or compare today’s profits with yesterday. However, staking is more convenient because once deposited, there is no hassle to check from time to time and easily get more stable profits.
Can anyone get rewards from staking?
Not necessarily. When participating in staking, a certain amount of compensation is given. However, if the price falls due to external factors, users may lose money after the staking period expires.
Also, after participating in staking, a certain period is required to receive the coins. Even if the price fluctuates, it cannot respond immediately.
How to participate in staking
It is rare for ordinary investors to participate in staking directly. In other words, in order to stake, users must install and operate *nodes directly on your computer and must verify and approve block generation.
For this reason, ordinary investors do not directly stake. It takes a lot of time and money, so they usually participate through exchanges, wallets, or custodial agencies.
*Node — The individual that manages blockchain operation and overall governance
Typical staking coins
Cardano (ADA): Estimated Annual Profit: 4–5% (subject to change)
Neo (NEO): Estimated Annual Profit: 2.5–4% (subject to change)
EOS: Estimated Annual Profit: 0.5–1% (subject to change)
VeChain (VET): Estimated Annual Profit: 1–3% (subject to change)
Tezos (XTZ): Estimated Annual Profit: 6–7% (subject to change)
Checking staking rewards
“Stakingrewards” is a platform that informs staking cryptocurrency data. Users can stake here, and check the staking value of cryptocurrency and various assets as well.
According to Stakingrewards (as of January 18, 202), the value of the staking cryptocurrency is estimated to be approximately $474.5B
🔎 Explore staking rewards
