It’s hard to escape the term, ‘crypto staking’, these days.
The phrase is enjoying increased mainstream attention from financial KOLs and media outlets, thanks in part to unprecedented market uncertainty and investors seeking options to diversify their portfolios and preserve wealth.
So, what exactly are the benefits of staking? Let’s take a deep dive with a simple Q&A.
What is crypto staking?
Staking allows a trader to lock up their crypto funds in a wallet for a certain period, at a certain APR%, to gain rewards. Very similar to generating interest on a fixed deposit account at a bank.
Fine, but what’s a ‘staking pool’?
Staking in a pool simply means you are combining your crypto holdings with those of other investors in a pool to improve the chances of earning greater rewards.
When joining new pools, be mindful of the pool size, the bigger the pool means that the rewards are distributed among more traders. Staking fees and staking tenor also differ, choose one that works best for you and your portfolio. Fees can impact your total rewards gained, while staking tenor affects how long your crypto holdings will be locked up for.
Got it. So, what are the main benefits of staking?
Glad you asked.
- Generally higher rewards compared to other forms of investment.
As more PoS blockchains compete for participation from investors and traders, the rewards can be quite attractive as they can add up to 10 -20% yearly.
2. If you have a significant amount of crypto lying idle, it’s a great way to put it to work.
We have not met anyone who didn’t appreciate passive income. Staking is as simple as locking up your funds, only to come back later to discover more value.
3. Staking helps stabilise the security of the PoS blockchain.
Think of it as community service to help everyone on the blockchain engage and transact better. Many advocates of staking also claim it is much more eco-friendly than mining as it uses less energy to validate new blocks on the chain.
For details on a full guide to staking on FINXFLO, click here.
FINXFLO provides regular staking pools for FXF token holders, so, watch this space for more exciting announcements.