You can profit in the crypto industry by staking. But what is crypto staking? How can it generate passive income ?
Well, on this occasion, Coinomo would like to discuss what crypto staking is and how it can generate a large enough return . So for those of you who want to know more, just check the reviews below!
What is Crypto Staking?
In simple words, staking is like locking the assets in the system, i.e. staking 3 Bitcions means locking 3 Bitcoins up in the wallet, not touching it.
If you want to know the exact meaning, it involves a process when a crypto asset user actively participates in the validation of transactions that occur in the Proof of Stake (PoS) consensus algorithm blockchain system .
Proof of Stake is an algorithm whose role is to validate transactions based on distributed consensus. Validation is usually done based on the total number of crypto assets owned.
Because in the Proof of Stake algorithm a person can validate transactions according to the coins he locks, in other words the more coins locked in the wallet , the more significant his influence in the blockchain system will be.
Well, you can get passive income in the form of rewards or interest from staking. You could say it is similar to the Deposit in Bank system, only the return provided by crypto staking can be much larger.
How Does Staking Work?
Staking is one of the most popular ways that you can earn passive income on the basis of trading crypto assets. Staking can be done by storing assets in a wallet that offer this service.
The stored assets will be locked into the blockchain using a consensus Proof of Stake algorithm for a certain period of time. The profit you can get from it depends on the price and number of crypto assets you lock and the duration you lock the asset.
A person who stakes crypto assets in a Proof of Stake blockchain is usually referred to as a validator . A validator will get rewarded when they successfully validate a transaction. Of course, every Proof of Stake has various kinds of special rules for its validator.
Specific rules for validators are quite diverse, there are those that define validation rules based on the asset locking period or specify a certain minimum limit. Based on the rules and algorithms of the validators, Proof of Stake works to perform actual validation and distribute rewards to validators. The rewards that validators can receive are usually calculated based on the amount of assets locked up.
For example, in a Proof of Stake blockchain that uses a minimum limit rule, the node will deposit the required number of crypto assets into the network and then lock it. Later, if the node succeeds in creating a new block, then the validator will get a reward.
The more assets that are locked, and the longer the lock-up period lasts, the greater the profit the validator can get.
Well, for a blockchain to work efficiently, a validator must provide at least a stable service. An example of an effort to maintain a stable Proof of Stake is to cut interest on crypto assets owned by validators who act fraudulently. This interest deduction is of course done directly by the blockchain.
Is Staking profitable?
Of course staking can be a great choice if you want to earn passive income. Especially, if you are a person who does not have time to monitor market price movements continuously.
As explained earlier, staking is done by locking an asset. Later you will get interest from the locked asset. At first glance, it seems very easy and profitable, but is staking always profitable?
Of course staking still has risks, therefore before deciding to staking, you must do your research first and make sure the platform you choose is a trusted platform.
That’s because when staking crypto, you are required to lock the crypto assets that you own for a certain period of time. That means during that time period, you cannot sell the crypto asset.
It can also work against you, as you could miss the moment when the value of the crypto asset you are locking up is going up. You also cannot sell assets or make cut losses when the price of crypto assets is falling. But even so, if you are a hodler (i.e. when you like to buy crypto coins and hold them), then staking is the right strategy for you.
Staking on Coinomo
If you want to try staking crypto to get passive income, make sure you do it on a trusted exchange platform . One of the platforms that provides Staking services is Coinomo through the OMO Farming and OMO Staking program .
OMO Staking SNX is launching soon on Coinomo. You can earn an estimated APY of 50%, and buyers can earn passive income twice. First time, from the staking rewards/interests, second time from the value appreciation of SNX itself.
SNX, (NOT the same as the NYSE traded stock SNX) is one of the older DeFi tokens as it was launched back in 2017, survived & prospered through the industry reformation in 2018/2019. The network in conventional finance terms creates futures contracts to let traders bet on asset prices (like Tesla stock price) without owning the actual assets. Each of the options contract are collateralized by SNX tokens.
Come on! Download Coinomo Now and Invest in OMO Staking SNX Today!