The cryptocurrency market has a wide variety of blockchains in its ecosystem. Each of them has peculiarities in their structure. These differences seek to enhance the most important features of each one.
Staking is a crucial protocol for the proper functioning of different blockchains. In the cryptocurrency market there are a variety of ways to perform staking. The user can receive rewards and participate in governance through staking.
What is staking?
Blockchain technology has different mechanisms for generating new blocks. Each block generated makes it possible to increase the security of the ecosystem. Currently, the most commonly used mechanisms for generating blocks are proof of work and proof of stake.
Proof of stake is one of the most widely used block generation mechanisms. This generation is carried out through staking, a process based on the participation of users.
Their participation consists of delegating the blockchain’s native cryptocurrency. This currency must be blocked for a certain period of time. For each block generated, the user will receive a reward that will be distributed according to the amount blocked in the staking.
In the cryptocurrency market, you can find different blockchains that use this protocol. These are some of the most popular blockchains:
- Ethereum
- Arbitrum
- Cardano
- Solana
- Avalanche
- Cosmos
How does staking work?
Before staking, it is important to know some key aspects. Users interested in delegating their funds should be aware of the types of staking available. All types of staking have different requirements for delegating funds. In addition, there is a minimum required to participate in this process.
This is divided into 2 types of staking that we will analyze separately.
Cold Staking
Cold staking (or cold staking) is a type that enables staking from a cold wallet. This allows funds to be kept safer offline. This form of staking is best suited for users who choose to participate with large amounts of the cryptocurrency. The Ethereum blockchain uses this type of staking due to the fact that it takes 32 ETH to become a validator.
Staking pool
Staking pool consists of delegating funds to a group of cryptocurrency owners. This is a collaborative way of participating in the proof of stake of different chains. The rewards are distributed in the pool equally.
While cold staking is a safer way to participate, pools require a smaller amount. The minimum amount in this type is usually affordable for any user.
Advantages of staking over mining
Mining and staking are totally different, although both protocols seek to decentralize the blockchain. However, staking achieves this more efficiently because of its low energy costs generated in each block. Mining, on the contrary, requires larger amounts of electricity every day due to the increasing difficulty of its algorithm.
In the proof of participation, users do not require specialized equipment to become a validator. Simply possessing funds in the native currency of the chain will be enough to become this important player. Staking enables the ecosystem to maintain a high level of security and also keeps the network running smoothly.
Becoming a validator also guarantees consistent rewards. All chains with proof of stake provide high returns for their validators. The liquidity of the cryptocurrency increases with increasing staking, so its value increases. In chains with proof of stake the security is very high.
DragonStake and how to participate in the staking of different blockchains
DragonStake is a validator present in the foundation of numerous blockchains. This team has been present in the ecosystem for several years. Currently, this team is present on 9 blockchains. Users can delegate their tokens while maintaining their custody.
This and other features are mixed to keep users’ funds safe. DragonStake is certified as an operator in the crypto ecosystem. The number of supported blockchains is growing and 2 more are expected to join soon.
There are many blockchains in the ecosystem that support staking. Many of these are very important in the cryptomarket. Let’s see what are the steps to follow in different chains to participate in proof of stake.
Avalanche
- Transfer funds to the platform chain (P-Chain).
- You must have at least 25 AVAX to perform staking.
- Select Dragonstake as the validator.
- Enter the staking period and the amount.
- Confirm the transaction.
This process is very simple and can be done in a short time. If you want to know more about this network you can access its official website.
Polkadot
Polkadot has different ways of staking. The nomination pool allows delegating any amount of funds. The minimum is only 1 DOT for this form of staking. This is the way to delegate on the network for beginners. However, there are other ways where you can delegate directly or select a validator. Here are the steps to participate in Polkadot’s proof of stake.
- Set up an account on Polkadot.js.
- Obtain DOT tokens through an Exchange.
- Connect the wallet to the website.
- Select DragonStake as validator.
- Confirm the staking by pressing the “Nominate” button.
Eigenlayer
Eigenlayer is a chain that was launched at the end of April. The chain has had a great impact since its activation due to some very peculiar features. Many of these aspects have not yet been activated, but for the moment, there is great potential. These are the steps to follow to delegate funds
- Connect the wallet to the official website.
- Click on the “Restake” button.
- Select the Lido protocol.
- Select the amount to be delegated.
- Open the “Operator” section in the top menu.
- Select DragonStake as validator and click on “Manage”.
- Click “Delegate” to confirm.
Undoubtedly, this is a validator with a great prestige in the market. And that’s all for today, let me know in the comments which blockchain you would select for staking.