Kele Pool

What is Staking in Cryptocurrency?

As another important way to earn cryptocurrency besides mining, staking has become popular in recent years. In simple terms, staking is like we deposit money in the bank to earn interest. By staking the coins and creating network validators, you can earn a certain percentage of the staked coins as rewards. Compared with mining crypto, staking is much more convenient to participate in. You don't need to purchase miners, or work on complicated miner configurations and operations. All you need to do is finish some agreements and wait for the rewards.

Still, staking is not supported for all cryptocurrencies currently. Before investing, you must first confirm that the corresponding network is based on the Proof-of-Stake (PoS) consensus mechanism.

What is the PoS consensus mechanism and how does staking work?

Consensus Mechanism is a fault-tolerant mechanism, which can verify the information in the distributed database and secure the database. For cryptocurrencies, this distributed database is known as the blockchain.

The Proof-of-Stake (PoS) consensus mechanism can process cryptocurrency transactions and generate new blocks on the blockchain, by the means of staking - the coin owners stake a certain number of coins to create a validator, and the validator will have a chance to participate in the supervision and generation of new blocks.

Unlike PoW, we don't have miners in PoS and they are replaced by "validators". This mechanism is for people to create blocks, not to mine. To reward the people helping with the network security, validators that create new blocks are rewarded with extra coins. Generally speaking, if a validator has more holding coins and longer holding time, it would be easier for it to be chosen by the network. So stake more coins for higher profit.

Why do we need PoS?

Before PoS and staking, the Proof-of-Work (PoW) consensus mechanism has always been the mainstream theoretical basis of the blockchain. PoW can maintain the distributed network by requiring miners to complete complex mathematical calculations, but there are also problems:

  • Miners/mining machines consume too much electricity, which has already caused environmental disputes

  • The process of processing mathematical calculations is inefficient, and a transaction usually takes a long time to complete, which is becoming a headache as blockchains expand.

In the PoS network, we replace the processing power competition of miners with the comparison of "stake" shares, so the above two problems can be effectively solved. As cryptocurrencies are widely used in games, De-fi and other fields, PoS has gained its popularity for its high efficiency.

Benefits of Staking

Staking is the most convenient way to earn cryptocurrency and does not require much hardware support. In addition, staking can also bring the following benefits:

① Increase your crypto funds, reduce the loss and risks caused by inflation

② Easily help to maintain and secure the blockchain network

③ Obtain voting rights and participate in the governance of the blockchain

At present, the annual percentage rate of staking is 4-20%, varying in different currencies. The actual income should also consider the value fluctuation of the currency itself, platform service fees, etc.

How to increase staking income

If you want to increase your income, you can refer to the following suggestions:

  • If you are not a crypto expert, it is better to choose a well-recognized currency, such as ETH.

  • Choose a reliable staking platform with a proper service fee, such as a Kele Pool.

Kele Pool official website: Kelepool.comopen in new window

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Secure: The staking smart contract of the Kele Pool has been audited by the blockchain authority SlowMist Technology.

One-stand Staking Platform: Kele Pool provides a flexible staking model. You can freely choose the amount you want to stake and enjoy a low service fee. ETH is now supported in Kele Pool and more currencies will be released in the near future.

For details, please check the official website: https://www.kelepool.com/open in new window

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