Participating in Proof of Stake is an opportunity for token-holders to earn passive income from idle assets.
What is staking?
In a Proof of Stake (PoS) consensus model, participants wanting to verify transactions must put their money where their mouth is, literally putting their assets “at stake” to lend credibility to a transaction.
How and why stake your coins?
In a Proof of Stake blockchain, any token holder can earn a reward for staking their tokens, because they are helping to verify new transactions on the blockchain, earning a reward in the process. Token holders “delegate” their tokens to validators, who run infrastructure and use the tokens to earn a reward without taking custody of the tokens. Even safer than delegating to a single validator is delegating to a liquid staking pool like Lido, which stakes the tokens across multiple validators.
See our FAQs about Lido to learn more.
What are the risks of staking?
Validators need to adhere to the blockchain’s requirements for truthfulness and uptime, and can have staked tokens taken away by the protocol if they fail to do so (this is called “slashing”). Staking pools like Lido work with industry-leading validators who have robust and reliable infrastructure, and any slashing losses from a validator are socialized across the entire pool.
