Don’t know market analysis but looking for a simple way to earn crypto? Staking may be just the right answer for you!
Staking allows you to earn interest by just holding on to your crypto assets. With the wide range of staking options available today, all you need to do is just select the staking plan that best suits your needs and collect rewards.
But as with any other investment, it’s always a good idea to at least learn about the basics. So, let’s talk about staking and how it really works.
Simply put, staking is the process of earning rewards by just holding your cryptocurrencies for a specific period of time. During the staking period, you can’t spend your staked tokens, however, some staking plans allow for early withdrawal.
Not all cryptocurrencies support staking. But Why?
To understand the reason, we need to talk about consensus algorithms. In a decentralized setup, a consensus algorithm helps users to agree on different matters concerning the system. For a blockchain network, this means verifying users’ transactions to ensure their authenticity.
Cryptocurrencies, like Bitcoin, use the Proof of Work (PoW) consensus algorithm which requires a huge amount of computing power for transaction verification. The drawbacks of PoW, like its negative effects on the environment, made industry members look for alternative solutions.
As a result, Proof of Stake (PoS) was proposed. In a PoS blockchain, participants can lock up a specific amount of coins to participate in transaction verification and earn rewards. PoS blockchains are more efficient, scalable, and sustainable than their PoW counterparts which is one of the reasons behind their growing popularity.
First, you have to choose a cryptocurrency that supports staking. After that, you can stake your tokens by either becoming a full validator or joining a staking pool.
You may need some technical knowledge for this. In solo staking, you become a transaction validator by running a blockchain node. To do this, you have to stake the minimum amount required by the system which may be quite significant based on your selected crypto. For example, you need at least 32 ETH for solo staking on Ethereum 2.0.
You also need to run the node on your own hardware and keep it online 24/7. In exchange, you’ll earn the full rewards and don’t have to pay a portion of it to the middleman.
Solo staking is not suitable for everyone as it may need significate investment and technical knowledge. Instead, you can try staking pools. Staking pools allow you to stake any amount of crypto which helps them to run a validator node on behalf of you. They charge a fee for node maintenance and distribute rewards among pool members according to their share.
This approach lowers the barriers to entry and allows every crypto holder to have a chance of earning staking rewards. It’s also more beginner-friendly as you don’t have to worry about node or hardware setup.
Similar to an interest-bearing savings account, DIFX Staking allows you to earn interests by locking up your crypto assets for a specific period of time. The staking period can last from 10 days to 1 year, while the interest rate can go up to 90%!
The process is quite simple:
That’s it! You can stake your coins with just a few clicks and achieve a new source of income. In addition, you’ll receive $30 worth of bonus points by just completing the first two steps. And it doesn’t stop there!
Learn more about the DIFX Rewards program here.