Understanding Proof-of-Stake
Deep dive into the fundamentals of Proof-of-Stake, its benefits, and how it powers the blockchain ecosystem.
What is Proof-of-Stake (PoS)?
Proof-of-Stake (PoS) is an energy-efficient blockchain consensus mechanism where Validators are selected to create new blocks based on the amount of cryptocurrency that has been delegated to them and locked as "stake." This method significantly reduces the computational power required, making it a sustainable alternative to Proof-of-Work (PoW) and other consensus mechanisms.
How Does PoS Work?
Validators
Validators, also called Node Operators in the Ethereum network, are responsible for validating transactions and adding blocks to the blockchain based on their stake and network rules.
Delegators
Delegators can delegate their cryptocurrencies by staking these to Validators, also called Node Operators.
Rewards
Participants in the staking process, such as Delegators and Validators, earn rewards for their participation, such as inflationary rewards and, in some cases, transaction fees.
Benefits of Proof-of-Stake
Energy Efficiency
PoS requires minimal energy compared to PoW, contributing to a more sustainable blockchain ecosystem.
Decentralization
PoS encourages network participation by allowing a wider range of users to participate in block creation and network security. With PoS, any token holder has the chance to contribute to securing and shaping the future of the blockchain.
Enhanced Security
The higher the percentage of staked tokens, the more secure the network becomes. Potentially attacking a network would be extremely costly, as one would need to convince or acquire more than ⅔ of the voting power.
Incentivized Participation
Validators and Delegators earn rewards, promoting active involvement in network staking.
What is Staking?
Staking is the process of taking part in a Proof-of-Stake (PoS) network consensus by locking up cryptocurrencies to support its consensus mechanism. It contributes to network operations and security, and participants such as Delegators earn inflationary staking rewards and potential transaction fees as a return. Validators (Node Operators) are responsible for block production and validation. They earn a commission from the rewards generated by the stake allocated to them by Delegators.
How to Stake?
Hold Proof-of-Stake tokens
Staking requires Proof-of-Stake tokens, such as the ones listed here. These can be stored in a non-custodial wallet for full control or securely held with a custodian. Stakin operates as a non-custodial service, ensuring you retain ownership of your assets.
Understand Risks and Rewards
Familiarize yourself with the staking process, including the potential rewards and risks. Check network-specific details, such as wallet compatibility and staking instructions, available on our Network Pages
Stake and Earn
Delegate your tokens to a Validator to start earning rewards. Claim and compound your rewards manually or take advantage of our auto-compounding solutions and tools for an optimized experience.
Benefits of Staking
Earn
By staking your cryptocurrencies, you are rewarded by the protocol. Each Proof-of-Stake network offers unique inflation rates and, in some cases, potential transaction fees, allowing you to earn interest on your holdings while contributing to the ecosystem.
Keep Possession
Staking is non-custodial, meaning that you keep possession of your cryptocurrencies. You get to choose how you store these and are responsible for the security of your assets.
Decentralize
When you stake your tokens, you contribute to the security and decentralization of the network. The higher the percentage of tokens staked in the network, the harder it is to attack it.
Why Stakin
Institutional-Grade SLA Staking and Support
Benefit from enterprise-grade Service Level Agreements (SLAs) with guaranteed uptime, slashing protection, and dedicated support.
ISO27001 Certified Operations
Stake with confidence knowing our infrastructure adheres to globally recognized security and reliability standards.
Geographically Distributed Infrastructure
Our servers and redundant backups are strategically distributed across multiple continents, ensuring high availability and resilience for higher uptime.
Enhanced Staking Experience
Enjoy user-friendly tools like our staking dashboard, seamless custodian integrations, and auto-compounding solutions designed to maximize your rewards.
Active Contributor
We actively participate in network governance, protocol development, and educational initiatives, strengthening the blockchain ecosystem.
Sustainable Operations
Committed to eco-friendly practices, our infrastructure leverages renewable energy and carbon offset initiatives to minimize environmental impact.
Watch Our Video Tutorials
Non-Custodial vs. Custodial Wallets
Discover the key differences between non-custodial wallets, which give users full control of their crypto assets and keys, and custodial wallets, which store keys on behalf of users.
What is Staking?
Learn how staking works in a Proof-of-Stake (PoS) network. Understand how locking cryptocurrencies helps secure the network, contributes to its consensus, and earns participants staking rewards.
What is Proof-of-Stake?
Learn how staking works in a Proof-of-Stake (PoS) network. Understand how locking cryptocurrencies helps secure the network, contributes to its consensus, and earns participants staking rewards.
Have more questions?
You can contact our team via social media or email:
For institutional investors, Stakin has partnered with leading custodian providers.
We can help you navigate your questions concerning staking, security, and risk management.
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