20 Jul 2022

It is wonderful to see that the world is gradually embracing the blockchain industry and the numerous possibilities that accompany web 3.0. Cryptocurrency is no longer an unfamiliar term in our society today. If you are well informed about cryptocurrencies, then you will agree that the term staking is not a strange concept. If on the other hand, the term ‘staking’ is still very strange, allow me to break it down for you.


In cryptocurrency, the term staking refers to a process that involves committing your crypto assets to support a blockchain network and confirm transactions. In simple terms, it is the process of locking up crypto holdings in order to obtain rewards or earn interest. It is one interesting avenue of earning passive income as some cryptocurrencies offer high staking rates. Staking is applied to cryptocurrencies that employ the Proof of Stake (POS) consensus mechanism.

According to Investopedia, the Proof-of-stake is a cryptocurrency consensus mechanism for processing transactions and creating new blocks in a blockchain. A consensus mechanism is a method for validating entries into a distributed database and keeping the database secure. In the case of cryptocurrency, the database is called a blockchain — so the consensus mechanism secures the blockchain.

In order to achieve concensus, participants are required. These participants who take part in staking are known as stakers and they take active part in approving and verifying transactions on the blockchain. As a reward, they get specific rewards depending on the network.
Take for an example depositing your funds in a savings account, you earn interest on your funds while it is still in the bank. This interest is a reward from the bank for using your funds for other purposes (lending, etc.). You can now see how staking is similar to earning interest.

The Drawbacks of Staking

Staking has its advantages which include a means of generating passive income as well as a way of contributing to the security and efficiency of the blockchain project involved. However, there are some setbacks.
Your crypto assets are locked and you receive staking rewards (interest) for whatever you deposited. This is not the case with liquid staking.


If you want to talk about emerging investments in decentralized finance, you should take a look in the direction of liquid staking. It involves the act of delegating your tokens to a service that stakes for you without losing access to your funds.
Liquid staking allows you to access your funds even when you’re staking them. The funds remain in escrow, but aren’t “locked” and inaccessible, as they would be with PoS staking.
Staking your tokens involves locking them up for a specified amount of time. During this period, you cannot trade or send these tokens to another crypto address. With liquid staking, you can add and remove funds as you pleased (usually with a trade-off of lower APR).
The advantage of liquid staking is that you can still earn passive income while still having access to your staked assets. You are permitted to use your tokens in DeFi as well as stake them. With liquid staking, you remain in control of your funds. The PoS Network benefit from liquid staking with increased liquidity and enhanced network security.


Talking about Liquid Staking, it is high time I introduce you to StakeEasy-An on-chain privacy preserving liquid staking solution for Secret Network. With StakeEasy, you are totally anonymous on the blockchain and your assets are confidential. You can stake your assets on the platform and get a liquid SNIP-20 token (seSCRT) in return which is equivalent to your staked assets. This seSCRT token increases in value as the staking rewards is accumulated on the platform. The seSCRT token can be transferred to another wallet or it can be used in a Defi protocol to either provide liquidity or as a collateral.

The features of StakeEasy include auto compounding, validator diversification, dynamic validator set, liquid staking and DeFi integration. If you want to learn more about StakeEasy, follow on socials to stay updated.



Write & Read to Earn with BULB

Learn More

Enjoy this blog? Subscribe to Kommie


No comments yet.
Most relevant comments are displayed, so some may have been filtered out.