Staking is one of the most popular ways of earning passive cryptocurrency income. But how does staking work and how can you benefit from it. In this video let's get into what staking actually is.
In very basic terms staking is the process which allows you to receive more crypto by storing a specific amount of coins to support the functionality of a blockchain network. Some people look at staking like a savings account where you put cash in the bank and receive interest income after a certain period of time but though the idea is similar the staking concept works in a completely different way. When you deposit your money in a bank it uses your funds to lend to other people or for investing in financial instruments.
With staking you lock crypto in your own node or delegate your coins to someone who owns the node. This node like numerous others in the blockchain usually serves as a validator of crypto transactions within the network or it can be used for governance votes. The node's purpose differs from network to network but the more valued the node brings to the network the greater the chance it will receive a reward in return.
The staking reward is usually paid in the coin state but some networks may determine rewards through other native tokens supported by their network. Still it's important to note that not all crypto networks support staking. You can stake coins only where a blockchain works using a principle called proof-of-stake for example bitcoin is based on the proof-of-work principle and relies on mining to secure the network so bitcoin is not a stakeable coin however Cardano for example is a proof-of-stake network so native crypto can be used to participate in staking to help the network operate.
There are more stakeable coins appearing in the crypto market because staking is considered a more energy efficient alternative to mining. Moreover if a network supports delegated staking users can contribute to it without special equipment or technical skills simplifying network adoption. If you want to start earning by staking the easiest way to do it is through a platform that allows you to delegate your coins.
Typically such platforms offer additional staking features. CEX. IO for example allows users to stake crypto currencies with an up to 14% estimated annual yield just by holding crypto on the balance by participating in staking with CEX.
IO crypto remains unlocked meaning you can withdraw and trade it anytime. Such an approach allows you to earn additional crypto without changing your interaction with cryptocurrency. If you like this video and want to learn more about staking and other CEX.
IO products make sure to subscribe to our YouTube channel by clicking on the subscribe button below. You can also find multiple useful links about staking in the description. Thanks for watching and stay at the forefront of crypto with CEX.
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