#261 new
bessiejoans

What is DeFi Staking?

Reported by bessiejoans | November 5th, 2020 @ 02:59 AM

In a decentralized Blockchain network, each block is validated by the Proof-of-stake (POS) as the Stake, and who lock their crypto assets on the platform and actively participate in validating the transactions and earns the reward for it. Mining requires a lot of resources and energy for mining blocks over the network known as Proof-of-work POW, and whereas stake requires crypto assets on their wallets.

How Staking Works?

On staking, once should hold cryptocurrency to lock it up (stake it) in a smart contract. When your stake is locked up, you vote to approve transactions. The “contract” between the staker and the blockchain network works.
Staking rules are distinct on various networks, and they are like

  1. The staker accepts that they’ll only validate valid transactions on the network. For example, they will not vote to approve double-spend transactions.
  2. In trade for accepting valid transactions, the network rewards the staker with a staking reward.
  3. If a staker vote to approve illegal transactions, they may lose some or all of their stake.
    This process is quite easy than mining as it requires a lot of computing devices and energy for Providing POW.
    Validators get the reward from the network for locking their cryptos on the network to attain the consensus.

The rules describing the technical and financial needs to act as a validator, like a stake size for validating transaction levels performed the basis of the algorithm, and rewards distributed among the validators.
Explore more info>https://www.osiztechnologies.com/blog/decentralized-finance-defi-st...

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