rypto staking is the process of holding crypto tokens in order to earn rewards. It is similar to earning interest on a savings account. The more crypto you stake, the more rewards you can earn. And, like a savings account, you can leave your crypto staked for as long or short as you like - though generally, the longer you stake, the more rewards you will earn.
Staking involves crypto wallets and crypto nodes. A crypto wallet is a software program that stores your crypto keys (private and public) and interacts with the blockchain to enable you to send and receive crypto. A crypto node is a computer that validates transactions on the blockchain. When you stake crypto, your tokens are used to help validate transactions on the blockchain, and in return, you earn rewards.
How does crypto staking work?
When you stake crypto, you are essentially locking up your tokens so that they cannot be used. In return for doing this, you earn rewards from the network. These rewards come in the form of new tokens, which are generated by the network. For example, if you stake 10 ETH, you may receive 1 ETH as a reward. The amount of rewards you earn will depend on the network, the amount of crypto you stake, and how long you stake it for.
In order to stake crypto, you need to have a crypto wallet that supports staking. Not all wallets support staking, so be sure to check before you try to stake your crypto. Once you have a compatible wallet, you can choose which crypto you want to stake and how much. Then, you simply leave your crypto in your wallet and wait for the rewards to come in. Some networks may require you to run a node in order to stake crypto, but this is not always the case.
How to start staking crypto
Now that we know what crypto staking is, let's look at how to get started.
The first thing you need is a crypto wallet that supports staking. Some popular crypto wallets that support staking are Trust Wallet, Atomic Wallet, and Stakecube Wallet.
Once you have a wallet, you need to find a crypto node that you can stake your crypto with. There are many crypto nodes to choose from, but some popular ones include Cardano, Tezos, and EOS.
Once you have found a crypto node that you want to stake with, you need to send your crypto to the address provided by the node. The amount of crypto required varies from node to node, so be sure to check the requirements before sending any crypto.
After your crypto has been sent and received by the node, it will begin staking on your behalf and you will start earning rewards. The amount of rewards you earn will depend on the amount of crypto you have staked, as well as the specific node you are staking with.
Crypto staking through an exchange
One of the most popular ways to start staking is to use an exchange that supports the process. We recommend using SokuSwap.
To stake on SokuSwap, you must hold the platform's native token SOKU. Then, you will need to join a SokuSwap staking pool. There are many different pools to choose from, each with its own requirements and rewards.
Once you have joined a pool, you will need to deposit the amount of crypto required by the pool. The crypto will then be used to help power the SokuSwap staking platform and you will start earning rewards.
Staking vs Yield Farming
Crypto staking and yield farming are often confused because they are both ways to earn rewards from crypto. However, there are some key differences between the two.
The biggest difference is that staking usually requires you to lock up your crypto for a specific period of time, while yield farming does not. This means that with staking, you can earn rewards even if the price of crypto goes down. With yield farming, on the other hand, you may need to sell your crypto in order to get out of a losing position.
Another difference is that staking usually requires you to use a specific wallet or node, while yield farming does not. This means that with staking, you have more control over where your crypto is being stored and how it is being used. With yield farming, on the other hand, you may need to trust a third party with your crypto.
Finally, staking usually has lower rewards than yield farming. This is because staking is less risky than yield farming, so the rewards are not as high.
Frequently asked questions
What is crypto staking in simple terms?
Crypto staking is a process where you lock up your crypto in a wallet or node in order to earn rewards.
What are the benefits of crypto staking?
The benefits of crypto staking include earning rewards even if the price of crypto goes down, having more control over your crypto, and having lower risk than yield farming.
What do I need in order to start staking crypto?
In order to start staking crypto, you need a crypto wallet that supports staking and some crypto that you want to stake.
Is staking better than yield farming?
It depends. Staking usually has lower rewards than yield farming, but it is also less risky.
Can anyone stake crypto?
Yes, anyone can stake crypto. You simply need to purchase some cryptocurrency and join a staking platform.