Crypto staking is the process of locking up your crypto assets to earn rewards or interest. It plays a key role in maintaining blockchain networks, where transactions are verified and recorded. Staking is essentially how users help validate transactions on a blockchain.
Depending on the type of cryptocurrency and the technology behind it, these validation processes are usually part of "proof-of-stake" (PoS) or "proof-of-work" (PoW) mechanisms. Both are ways for crypto networks to achieve consensus, ensuring that all transaction data is accurate and consistent across the blockchain.
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By locking up their crypto, stakers are participating in the network’s consensus process—helping to verify and approve transactions. In return for this service, the network rewards stakers, with the specific rewards varying depending on the blockchain.
A useful comparison is to think of staking like depositing money into a savings account. Just as you earn interest on your cash deposit, stakers earn rewards for contributing to the security and operation of the blockchain by locking up their crypto.
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