The blockchain and cryptocurrency niche has become the new focus for accounting firms, financial services providers, and individuals. Although a significant percentage focuses on price changes and volatility, staking in blockchains that use proof of stake (PoS) for transaction confirmations is particularly attractive. It leverages the power of decentralized finance, opening taps for users to generate and enjoy passive income from the cryptocurrencies they hold in their wallets.
When people hear of crypto staking, so many questions run through their minds. What is staking? How does it work? How much will I get? Keep reading to get the answers to the questions that you might have about staking in DeFi.
What is Decentralized Finance (DeFi)?
Before looking at DeFi staking, it is crucial to establish what decentralized finance is all about. DeFi is a type of decentralized financial system, which is run on top of public blockchains like Ethereum or Bitcoin. The aim is to offer multiple services, and one of them is crypto staking.
As a decentralized platform, it implies that no central authority, such as a bank or government, is responsible for controlling it. Here are the main attributes of a decentralized finance platform:
- Censorship resistant.
How Does DeFi Staking Work?
The concept of crypto staking is a way of incentivizing people who have crypto coins, such as Texas (TXZ), Cosmos (ATOM), and Tron (TRX), to hold on to them. In return, holders are rewarded with new coins or a part of the transaction fees. It is like taking your cash to a bank account and lending it, implying that you are sure of getting the cashback, plus some additional payments as interest. However, DeFi staking is more appealing because the rewards are pretty high, and your coins can gain more value.
The lovely thing about cryptocurrency staking is that you do not have to lend or surrender your coins. You only lock the coins in your wallet within a selected period. Instead of letting your coins lie idle, it will be a good idea to let them work for you by earning a reward.
What Do I Do to Start Staking?
The process of staking can be done in two ways. You can opt to do it on your own, which involves committing your coins and having a computer that runs 24/7 without downtime. Most people find this challenging and opt for the second option, using DeFi platforms.
These are professionally designed platforms to help you stake without worrying about running a node in the selected network. They are also able to pool together more crypto coins, meaning that your stake will get a better chance of confirming transactions and getting rewarded. It is easy, fast, and convenient because the platforms are run by professionals.
As you can see, staking through decentralized platforms is the next big thing, and you do not want to be left behind. It generates passive income, and your coins can also earn more if their value appreciates. One of the top DeFi platforms, which have won the trust of a lot of people, is Mantra Dao. Visit them on this website to learn more about their services and how to start staking.