What is staking?

Staking allows you to earn income from your cryptocurrencies by contributing to blockchain networks that use Proof of Stake (PoS) consensus protocols.

When you stake your cryptocurrency, you make the underlying blockchain more secure and more efficient. And in return, you are rewarded with more cryptocurrencies from the network itself.

To generate staking rewards on a Proof of Stake blockchain, a node has to designate a certain amount of tokens on the network (similar to a bond). The likelihood of a node being chosen to validate the next block is directly proportional to the number of tokens staked. If a node successfully validates a block, it is awarded a reward, similar to the rewards for miners on Proof of Work (PoW) chains. Validators would lose part of their investment if they approve a fraudulent transaction, which incentivises them to only approve valid transactions.

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