What is staking?

What is staking?

Staking is a way of earning rewards for holding certain cryptocurrencies. If you’re looking to earn some staking rewards, it’s useful to understand at least a little bit about how it works.

How does staking work?

With cryptocurrencies that use the proof-of-stake model, staking is how new transactions are added to the blockchain.

First, participants pledge their coins to the cryptocurrency protocol. From those participants, the protocol chooses validators to confirm blocks of transactions. The more coins you pledge, the more likely you are to be chosen as a validator.

Every time a block is added to the blockchain, new cryptocurrency coins are minted and distributed as staking rewards to that block's validator. In most cases, the rewards are the same type of cryptocurrency that participants are staking.

To put it simply, you can “stake” some of your holdings and earn a percentage-rate reward over time.

How much money can you make via Staking?

Different protocols pay different staking rewards. They typically give you a current APY value to show how much staking rewards are distributed back to staking pools via the network.

For instance, at the time of writing this article, Axie Infinity is giving you a 76% APR. This means that if you invest €100 worth of AXS, then you'll get €76 in rewards in a year. Of course, this rate can change very rapidly.

How does Proptee use Staking?

We have the goal to bring you as many income producing investment as we can. This means that we list many Metaverse coins that produce an income from Staking.

We do the hard work for you and Steak your cryptos in different staking pools, so that you can just sit back and earn the high APYs.

What is Proof of Stake?

Proof of stake in crypto is a consensus mechanism -- a way for a blockchain to validate transactions. The nodes in a blockchain must be in agreement on the present state of the blockchain and which transactions are valid.

There are different consensus mechanisms that cryptocurrencies use. Proof of stake is one of the most popular for its efficiency and because participants can earn rewards on the crypto they stake.

Staking rewards are an incentive that blockchains provide to participants. Each blockchain has a set amount of crypto rewards for validating a block of transactions. When you stake crypto and you're chosen to validate transactions, you receive those crypto rewards.

What are the benefits of staking crypto?

Here are the benefits of cryptocurrency staking:

  • It's an easy way to earn interest on your cryptocurrency holdings.
  • You don't need to buy expensive equipment for crypto staking like you would for crypto mining.
  • You're helping to maintain the security and efficiency of the blockchain.
  • It's more environmentally friendly than crypto mining.

Typical risks of staking crypto?

The risks of staking crypto:

  • Your staked assets can suffer a large price drop, that could outweigh any interest you earn on them. In Proptee, you earn the interest in Euro, so it's not an issue.
  • Staking can require that you lock up your coins for a minimum amount of time. During that period, you're unable to do anything with your staked assets such as selling them. On Proptee, you can buy & sell these assets like any other, there's no lock up period.
  • When you want to unstake your crypto, there may be an unstaking period of seven days or longer. Again, on Proptee, you can sell them any time you want.

If you want to learn more on Staking, we recommend researching proof of stake mechanism and depositing a small amount of money into a crypto wallet and stake that into a staking pool.

If you're not that type of person, just download the Proptee app and buy coins that are already Staked!

Download the Proptee app here:

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