What is Staking & Why Should You Start?
Staking your crypto assets can be very well compared to traditional bank accounts where you earn interest on your deposits, although, staking is far superior. While the products in traditional finance often offer low returns on investments, DeFi opened up the doors to a whole new world of opportunities to earn money with higher APYs.
What is Staking?
Staking is an investment option in the DeFi space where you can earn rewards for holding certain cryptocurrencies. It stems from the Proof of Stake (PoS) model where it is used to verify transactions and generate incentives for participants on the network.
In a general sense, participants are required to lock up their crypto assets for a specified period of time, where they will not be able to utilize the funds prior to the lock-up period. Staking rewards will then be generated whenever a user is chosen to validate the transactions on the blockchain.
How does staking work?
To make it easier to understand we will further break it down into simple steps one would take if he/she were to stake their crypto asset on CoinWind.
- Step 1: The user would first have to deposit cryptocurrency into a supported wallet.
- Step 2: The user would then need to head over to CoinWind and connect his wallet
- Step 3: There will be 2 buttons to navigate.
Strategy — Showing all required information about the product of choice.
Deposit — Users will have to decide the period he/she wishes to stake the asset.
- Step 4: After the lock-up period stipulated on the transaction, CoinWind will distribute the rewards earned with the initial lock-up amount. Users can then be able to withdraw or re-stake to generate more profits.
Why Should You Start?
Staking is an important tool to utilize if you hold crypto assets. It is an attractive way to earn passive income while incurring low risks instead of letting your coins collect dust in a wallet.
The migration from the Proof of Work (PoW) to the Proof of Stake (PoS) model is also an environmentally friendly move, as PoW mining was criticized for its obscene energy consumption. Given that staking is less energy-intensive, it not only poses a less threat to the environment but also operates at a faster speed while being highly scalable.
At CoinWind, users can leverage our staking protocol to earn revenue when they participate in node pledge mining.
Our Staking Features:
The asset security level is higher, where users have no risk of principal loss, node multi-signature management, more transparent capital flow, etc.
We support multi-currency, cross-chain node staking mining.
Users can enjoy low risk and a high rate of return with our platform.
Staking products we support:
Albeit the vast advantages of staking, it is crucial to DYOR and be informed about the risks that come with it. Locking up your assets for a period of time could also mean that you will lose out if the market were to move against you, wherein that case you wouldn’t be able to withdraw your assets immediately.
If you would like to read more about the risks of staking or other relevant topics, let us know in the comments below!