What is Staking?

Crypto staking allows anyone interested in cryptocurrency to earn rewards by participating in transaction validation on a proof-of-stake (PoS) blockchain. 

The process may sound complicated, but it is, in fact, very straightforward. Anyone holding a cryptocurrency that is based on a proof of stake algorithm can earn rewards.

The more tokens the user stakes, the more rewards they will receive.

Rewards will vary depending on the type and amount of cryptocurrency the user is staking. More recently, all top exchanges started offering staking as a service. Of course, the flag bearer of this trend was, as one would expect, Binance as this is the biggest cryptocurrency exchange globally.

Crypto Staking on Binance comes in two forms, these are:

Both of these can enable passive income for you, so let’s dig in.

As the name suggests, locked staking involves locking your funds for a set period; they will not be available for trading until the staking period is complete; users can end the staking period whenever they like but will lose their rewards if they want their tokens back early.

Locked Staking rewards vary; factors that influence rewards are:

Staking more tokens gives more rewards.

Benefits of Locked Staking

Disadvantages of Locked Staking

There is no need to lock your cryptocurrency with flexible staking, giving you more freedom over your tokens while still allowing you to benefit from staking rewards.

Benefits of Flexible Staking

Disadvantages of Flexible Staking

When staking cryptocurrency with Binance, users have a lot of options.

There are over 40 locked staking options, along with five more flexible DeFi staking options.

Binance offers over 40 different locked staking options. For a complete list of currencies that support locked staking on Binance, see here. 

Binance supports DeFi staking for the following coins.

DeFi staking allows you to choose between flexible or locked staking:

As Binance is the most popular crypto exchange platform, they will likely add more options for both locked and flexible staking process in the future.

Binance makes staking easy; it works similarly to a staking pool.

To start staking on Binance, head over to the staking section of the website. 

You will then choose between either locked staking or DeFi Staking.

After choosing which staking model you wish to use, you will select which token you want to stake; if you decide to use locked staking, you will also decide how long you want to stake your tokens.

The user interface is excellent and makes it easy to see how much interest you can expect to earn from staking with your chosen setup.

For more information about how to stake coins on Binance see here.

A staking pool allows multiple members to combine their staking power to increase their chances of being rewarded. 

Members of the pool will then receive staking rewards based on how much staking power they contribute to the pool.

Cold Staking is a method of staking coins without being under threat of cyber attack. It works by making use of offline spot wallet to keep tokens safe.

Proof of Stake (PoS) was created by developers Sunny King and Scott Nadal back in 2012. The goal of staking was to tackle the problem of Bitcoin mining’s high energy consumption. Back in 2012, it cost an average of $150,000 a day to maintain the Bitcoin network. PoS is a consensus mechanism.

Rather than relying on miners to add to the blockchain, Sunny and Scott suggested staking as an alternative; they proposed that individuals could contribute to the blockchain through staking. Anyone who is staking would have more chances of adding a block to the chain; they suggested that staking should have the incentive of staking rewards.

The ability to trade tokens while staking will depend on what staking method you decide to use.

You cannot trade with tokens used for locked staking.

Flexible staking allows users to trade their tokens at will; however, staking rewards are less.

Cryptocurrency staking allows participants to earn rewards by participating in transaction validation on a proof-of-stake (PoS) blockchain. 

Locked staking gives you higher rewards, but you cannot trade the staked tokens for a set amount of time; if you exit the staking period early, you will lose any interest generated on your tokens.

Flexible staking gives you more freedom, allowing you to trade your tokens while retaining the interest generated through staking.

Binance makes the process incredibly straight forward meaning that anyone can get involved with minimal effort.

The post Binance Staking Review – How to Stake Coins on Binance? appeared first on CaptainAltcoin.

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