Staking allows token holders to participate in proof-of-stake blockchain protocols. By staking your tokens with a healthy, active validator, you are helping the network you have staked to. When you stake to successful validators, like Blockdaemon, the network rewards you with a percentage reward on your staked assets.
Staked tokens are committed to a specific validator for a time; this is known as the lock-up period. Once staked, your tokens are locked up and illiquid. They remain locked up until this period ends, at which point you can unstake your tokens and use them as normal.
Holding unstaked tokens is like storing cash under your mattress. Unstaked tokens do not make you receive any interest. Not only that, but you’re not contributing to the network.
If you hold tokens on proof-of-stake blockchains, and you don’t intend to withdraw them in the near future, then you should consider staking. You can receive interest on your staked tokens. Plus, by staking to a healthy validator you contribute to the overall network's health and success.
There are 2 main methods of staking on most proof-of-stake networks; Running a Validator and Delegating to a Validator.
Running a Validator generally results in higher rewards, but it requires greater commitment. You have to run a validator node and stake a large number of tokens. If your validator is healthy and active, you can reap the rewards. Fortunately, Blockdaemon takes a lot of the effort out of running a validator. We host and manage validator nodes for our customers on many leading proof-of-stake blockchains. If you’re interested in running a validator node, check out the Blockdaemon Validator Node page.
Delegating to a Validator is an easier route into staking, however, the rewards aren’t quite as high. As the name suggests, delegating involves allocating your tokens to a validator. You don’t have to contribute in any other way, and you will receive rewards based on the success of that validator. When you delegate, you retain ownership of your tokens, but they will be locked up and illiquid while they are staked.
If you’re interested in delegating, visit the Blockdaemon Staking page and check out our staking guides.
Updated 3 months ago