If you’re a crypto investor, staking is a concept you’ll hear about often. Staking is the way many cryptocurrencies verify their transactions, and it allows participants to earn rewards on their holdings.
Staking is evolving from being a semi-passive reward, to becoming a powerful incentive for participating in governance. Projects that plan for the future will figure out how to incentivize active participation, while those who elect a set of governors based on the quality of their kickbacks won’t last.
Here are reasons why you should participate in staking:
Generate Great Rewards And Extra Income
With the help of staking, you can diversify assets as well as reduce transaction fees on the blockchain. If you are figuring out the best ways to make extra income, then let us tell you that it is the most efficient way to do so. A lot of people have increased their net worth by investing and encashing crypto. They also reinvest their money to buy another crypto and cash it to earn profits.
Staking for Power
With the right incentives, staking can not only return rewards, but also give you input on a project’s future direction. When staking your coins, they usually go through a lock-up period while voting — rules on this vary from project to project.
If you want to have a say in how a project is run, you need to stake one that incorporates your sovereignty as a user. To participate, you need to keep up on changes to its consensus rules and actively vote for what you believe is best for it.
Helping the global ecosystem
Most importantly – staking is much more eco-friendly than mining. Proof of stake system is clearly a massive improvement over proof of work, drastically reducing energy consumption and waste.
Less technical compared to Crypto Trading (Technical analysis)
You can benefit a lot from cryptocurrency staking because the value of your cryptocurrency also keeps on increasing and you also get interested in the cryptocurrency you have staked.
In cryptocurrency trading, it is not necessary that you get profit, there are as many chances of loss as there is the chance of profit. With staking, you just need to research on the right token, validator and platform. Then stake and earn!
Conclusion
Staking opens up more avenues for anyone wishing to participate in the consensus and governance of blockchains. What’s more, it’s an utterly easy way to earn passive income by simply holding coins. As it’s getting increasingly easy to stake, the barriers of entry to the blockchain ecosystem are getting lower.