Passive Income Reward
Staking on CSC
Staking crypto is now becoming popular day by day as many people are becoming aware of it. It has emerged as another way for crypto investors to make money. More precisely, to produce a good passive income. Staking can be a complicated idea or a simple one depending on how many levels of understanding you unlock. For a lot of traders and investors, staking is a way of earning rewards for holding certain cryptocurrencies.
How Staking Works.
Staking is the process in which you agree on granting a portion of your crypto to a blockchain network. The blockchain network uses your crypto for the betterment of the network. The reason your crypto earns rewards while staked is because the blockchain puts it to work. Cryptocurrencies that allow staking use a “consensus mechanism” called Proof of Stake, which is the way they ensure that all transactions are verified and secured without a bank or payment processor in the middle. Your crypto, if you choose to stake it, becomes part of that process.
“Only some cryptocurrencies have staking. Remember that the feature of staking is not available in every cryptocurrency. It is available in only those that use the model of proof-of-stake (PoS). It is more efficient in conforming transactions and uses less energy than the proof-of-work model (PoW)”
If a cryptocurrency you own allows staking, you can “stake” some of your holdings and earn a percentage-rate reward over time. This usually happens via a “staking pool” which you can think of as being similar to an interest-bearing savings account. Lucky for us CSC allows staking.
CSC & CET
CSC — CoinEx Smart Chain is a decentralized and high-efficiency public chain that runs based on the PoS consensus protocol. It can provide developers with an efficient and low-cost on-chain environment to run decentralized smart contract applications (DApps) and store digital assets. CSC adheres to the principle of decentralization and permission-free block generation, so that anyone can become a validator by staking CET. CET — CoinEx Token is the native token of CoinEx & CoinEx Smart Chain.
Understand The Mechanism Behind Staking Crypto
This is where it starts to get a bit more technical. To understand you need a little bit of background.
- Cryptocurrencies are typically decentralized, meaning there is no central authority running the show. So how do all the computers in a decentralized network arrive at the correct answer without having it fed to them by a central authority ? They use a “consensus mechanism.”
- Many cryptocurrencies — including Bitcoin and Ethereum 1.0 — use a consensus mechanism called Proof of Work. Via Proof of Work, the network throws a huge amount of processing power at solving problems like validating transactions between strangers on opposite sides of the planet and making sure nobody is trying to spend the same money twice. Part of the process involves “miners” all over the world competing to be the first to solve a cryptographic puzzle. The winner earns the right to add the latest “block” of verified transactions onto the blockchain — and receives some crypto in return.
Staking is considered to be a new way that aids in confirming the transactions. This process of confirming transactions occurs only in the cryptocurrencies that use the proof-of-stake model.
The proof of work model has been criticized a lot because of the vast amount of energy it uses, worsening the effects of global warming.
What is Proof of Stake?
A newer consensus mechanism called Proof of Stake has emerged — with the idea of increasing speed and efficiency while lowering fees. A major way Proof of Stake reduces costs is by not requiring all those miners to churn through math problems, which is an energy-intensive process. Instead, transactions are validated by people who are literally invested in the blockchain via staking.
- Staking serves a similar function to mining, in that it’s the process by which a network participant gets selected to add the latest batch of transactions to the blockchain and earn some crypto in exchange.
- The exact implementations vary from project to project, but in essence, users put their tokens on the line for a chance to add a new block onto the blockchain in exchange for a reward. Their staked tokens act as a guarantee of the legitimacy of any new transaction they add to the blockchain.
- The network chooses validators (as they’re usually known) based on the size of their stake and the length of time they’ve held it. So the most invested participants are rewarded. If transactions in a new block are discovered to be invalid, users can have a certain amount of their stake burned by the network, in what is known as a slashing event.
Benefits of Staking
Many long-term crypto holders look at staking as a way of making their assets work for them by generating rewards, rather than collecting dust in their crypto wallets.
Staking has the added benefit of contributing to the security and efficiency of the blockchain projects you support. By staking some of your funds, you make the blockchain more resistant to attacks and strengthen its ability to process transactions. (Some projects also award “governance tokens” to staking participants, which give holders a say in future changes and upgrades to that protocol.)
- It’s environment Friendly — Staking uses a mechanism that causes very little energy, ultimately helping the environment. It doesn’t require high computational power, which makes it much better than crypto mining.
- It Aids The Blockchain Network — Staking crypto helps the blockchain network process transaction more efficiently. Not only this, but it also helps provide high security to the system and make frauds negligible.
- Helps You Earn More Interest — Staking crypto has become one of the best ways for investors to earn a good amount as an interest on their stakes. Generally, it can provide you with good returns.
Staking On CSC
To stake our cryptos, we first need to pick a PoS public chain like CSC. Everyone is welcome to assist nodes to become validator by staking CET
Everyone is welcome to apply and become a validator by staking CET. The first staking for the validator must exceed 10000CET and each subsequent staking must exceed 1000CET . Based on overall staking ranking, the blockchain will select the top 101 nodes as validators in every 200 blocks. The validator has the obligation to generate blocks and verify on-chain info. In return, the validator will be rewarded with block commission fees and a certain amount of block production reward on the basis of the proportion of their staking.
You can Check out the CSC validators at: https://www.coinex.net/validator
Mainly, the rewards for validators are from block rewards (1 CET per block) and commission fees from block transactions. The reward differs according to the proportion of validator staking in overall staking. Since the validator take turns to generates blocks with the same probability (if they remain 100% online), the revenues of all validators are only related to their staking proportion.
The blockchain distributes rewards in proportion to the staking every 200 blocks. Validator’s reward receipt address can retrieve the reward by invoking the contract or via node command line. Rewards can be withdrawn every 28,800 blocks.
CSC manages node staking and governance via system contracts. The system contract has been deployed after CSC launch. Currently, 2 sets of system contracts are designed for CSC:
- Validator contract — Via staking contract, anyone can create nodes, stake for the nodes and make profits.
- Slash contract — Due to network, hardware, configuration and other factors, CSC might suffer from instability led by network abnormalities, machine crash and other potential problems. As a result, CSC introduces penalty mechanism. The slash contract is mainly responsible for keeping track of wrong block records of validator nodes. When the wrong block record reaches a certain threshold, 500CET of penalty fee will be taken from the validator's staked assets.
You can maximize rewards by choosing a staking pool with low commission fees and a promising track record of validating lots of blocks. Staking in IFPool, an application based on CSC. With IFPool, CSC’s first stake mining pool, even beginners can vote for CSC validators and stake their CET holding directly through MetaMask. In IFPool, staking generates returns for each share of iCET obtained, and users can claim the returns when withdrawing their CET. Through this pool, retail users can directly stake CET in their wallets to earn passive income, which is an easier, more convenient, and less limited approach compared to staking CET through CSC validators.
- Stake with IfPool at: https://ifpool.io/