Mention the term “staking” and people are likely to tell you that they have heard about it but do not know how it works. It is a buzz in the crypto world, whose popularity has been rising steadily. In 2021, lending/borrowing was the biggest segment, taking up about 50% of the entire value locked in DeFi platforms.
DeFi is both decentralized and powered by cryptos. This implies that it is not controlled by centralized authorities and, therefore, you are in full control. With over USD 300 billion locked in DeFi platforms in early 2022 and showing no sign of ebbing out, experts agree that this is the new world of finance. The best thing that you can do is to learn more about it and adopt it into your finance system. Why wait any longer when jumping in right away comes with so many benefits?
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Blockchain and Staking: How are they Related?
A blockchain is a system of recording information so that it is impossible to change or cheat the system. It works as a distributed system where all the nodes on the system store a copy of the database. The most notable thing about blockchains is that they use consensus for all operations on the respective native network. If it is a governance issue, especially where new features are proposed, nodes are asked to take a vote.
Staking is a process of using crypto coins to help validate transactions. When a user initiates a transaction, such as sending funds, the nodes pick it from there and confirm that everything is okay. Then, they add the details to the immutable blockchain. Finally, they are rewarded for their work of confirming transactions.
The main link between staking coins and blockchain is that the former is dependent on the latter. The process of staking starts by acquiring the right coins and then working with an appropriate DeFi platform to lock them to the native network. This means that staking helps to advance blockchain technology.
Now, onto the sweetest part: staking is easy, and you can use it to create a new revenue stream. Check out some of the reasons why people are opting to stake as opposed to working with standard trading instruments.
Staking Offers High Returns on Investment
Think of any investment out there, be it stocks or properties, and compare it to staking. Unlike these assets, where the returns are not defined, it is different when it comes to cryptos in decentralized finance (DeFi). Here, you get to know how much you are going to make in revenue at the start of the staking period. Some platforms pay up to 40% of the staked coin value.
Staking Does Not Involve Selling Your Coins
If you want to trade properties or stocks, it is pretty simple: you sell when the price goes up. Well, staking is different because you do not need to sell, but it still generates awesome returns. When you stake the coins, they will be returned to your wallet at the end of the staking phase. If the price of the coin goes up during the staking period, it will be an added advantage to you.
You become an Important Stakeholder in the Respective Blockchain
You have probably heard about the unique design of blockchain technology and network. Now, DeFi offers you the opportunity to become one or the owners. When you buy coins in the respective network, you immediately become one of the owners. Now, staking allows you to participate in governance. Your coins will not just be used to validate transactions but also allow you to vote to make the big decisions about the network.
To become part of the fast-emerging new world of finance and help take it to the next level, you need to have the right coins. Now is an excellent moment to buy cryptos because the discipline is expected to grow even faster. Visit Mantra Dao today for all the staking needs.