What is staking?
All You Need To Know About Staking
Staking is the process of actively participating in transaction validation (similar to mining) on a proof-of-stake (PoS) blockchain such as SOLANA. On these blockchains, anyone with a minimum-required balance of a specific cryptocurrency can validate transactions and earn Staking rewards. All you need to do is to find validator and stake your cripto.
What is Staking in Cryptocurrency?
- When the minimum balance is met, a node deposits that amount of cryptocurrency into the network as a stake (similar to a security deposit).
- The size of a stake is directly proportional to the chances of that node being chosen to forge the next block.
- If the node successfully creates a block, the validator receives a reward, similar to how a miner is rewarded in proof-of-work chains.
- Validators lose part of their stake if they double-sign or attempt to attack the network.
Is it Safe?
Staking is like sending crypto to someone, but the delegated entity doesn’t have full access to those funds, they can’t spend them. A very important thing is to do your own research before choosing a validator to stake to.