Staking
Staking is the process of depositing (or "freezing") cryptocurrency to support the blockchain network, generate new blocks, and facilitate transactions. The cryptocurrency owner provides their coins to the platform for a certain period of time in exchange for receiving rewards in the form of additional tokens.
Staking has become very popular as a quick and efficient way to enter the crypto industry. Profitable staking is a significant part of the crypto industry. Users believe that delegating their funds is easier and less risky than mining or investing in cryptocurrencies.
What is staking and how does it work?
When we deposit money in a bank for a fixed term, we earn interest. The concept is similar in crypto staking. Crypto staking involves holding your coins in a blockchain, thereby supporting its operations and enhancing its security.
In return for this, you receive rewards in the form of new coins, which are distributed within the network during the generation of new blocks.
The reason your cryptocurrency earns rewards during staking is that the blockchain incentivizes it to work. Cryptocurrencies that allow staking use a consensus mechanism called Proof of Stake, which ensures that all transactions are verified and secured without the involvement of a bank or payment system in the middle. If you decide to stake your cryptocurrency, it becomes part of this process.
Many long-term cryptocurrency holders view staking as a way to make their assets work for them, earning rewards instead of lying dormant in crypto wallets.
Staking is also a way to enhance the security and efficiency of the blockchain projects you support. By staking a portion of your funds, you make the blockchain more resilient to attacks and strengthen its transaction processing capabilities.
What is the difference between staking in Decimal?
Staking in Decimal refers to the process of placing a stake with validators on the Decimal blockchain. During this process, you do not transfer your coins to them and can withdraw them at any time.
As of Mars 26, 2023, there are 85 validators operating on the Decimal platform, with stakes delegated to them totaling around 7,5 billion DEL.
Staking becomes highly attractive once it reaches a profitability level of 20%. Cryptocurrencies are volatile, so as long as you choose a coin that is growing, you will earn profits. Staking contributes to the growth of the coin, which is why it has become so popular.
On DecimalChain, the annual staking percentage is currently 109.69%.
Yes, absolutely. People use it because they are interested in new technologies. Additionally, the annual coin yield on some blockchains can range from 20% to 100%.
Unlike mining, you don't need any equipment to participate in staking. Staking is much more user-friendly and environmentally friendly. Moreover, when staking, you play an important role in keeping the blockchain secure and sustainable.How to start staking on the Decimal platform?
If you want to participate in staking on the Decimal platform, you need to acquire the cryptocurrency of that blockchain, which is based on the Proof of Stake mechanism. Each participant can delegate their coins to one or multiple validators and receive rewards for it. The rewards earned by the validator for creating and verifying blocks are distributed proportionally among all the delegators based on their stakes.
To help delegators assess their potential rewards, the Decimal team provides special calculators. These calculators use historical data and various parameters (number of validators, stake size, etc.) to provide reward estimates.
To begin staking, you need to:
- 1. Go to the Delegation section of the Decimal Console.
- 2. Choose a validator.
- 3. Delegate your stake to them from the coins available in your balance.