In the wake of the Ethereum Merge, many have stocked up on Ether to make the most of the outlook and benefits of the newest and largest Proof-of-Stake chain, including the high Staking rewards expected after the Merge. Learn more about ETH Staking, and Staking in general, to start earning rewards and contributing to blockchain projects, including Ethereum.
For more information on the Merge, read our articles on one of the greatest happenings in the history of crypto (part 1 and part 2).
What is Staking?
Staking is a fundamental component of the consensus method of certain types of crypto assets.
Unlike Proof-of-Work (PoW) blockchains like Bitcoin that ensure security through significant hardware resources and energy expenditure, Proof-of-Stake (PoS) blockchains ensure validators are honest by requiring them to commit a certain amount of collateral on chain in order to participate in consensus and secure the blockchain.
If the validators are dishonest, the stake of coins they have locked can be “slashed” or burned by the protocol. If the validators are honest and contribute constructively, they are rewarded with new tokens. Other token holders that want to participate without running their own node can also delegate their tokens to a trusted validator to earn rewards. Thus, Staking is a unique method to both contribute to the security of a blockchain and to earn stable dividend payments to compound an investment in the native coin of a PoS project.
What is Proof-of-Stake?
Together with PoW, PoS is arguably one of the most popular consensus mechanisms to verify the honesty of the users and the transactions on the blockchain, even more so now after the Ethereum Merge (read more on The Merge in part 1 and part 2 of our series).
While PoW systems allow validators to verify crypto transactions through mining, in PoS, blocks are created by validators who stake collateral into a smart contract. In a nutshell, users can stake tokens on the blockchain and earn a percentage-rate reward over time (APR, Annual Percentage Rate), usually via a staking pool.
What are the advantages of Staking?
- Compared with PoW mining, Staking has significantly lighter hardware requirements.
- Staking generates incentive payments to reward participants.
- Compared to PoW mining, Staking can be up to 99.9% more energy-efficient.
- Staking participants contribute to the the security and smooth operation of decentralized blockchain protocols.
- Among yield-generation methods, Staking ranks high in safety, as the receipt of yield payments is not reliant on the success of a trading strategy to create value.
WhaleFin Staking
WhaleFin offers Staking options on seven different coins, including ETH2.0, Solana, Cosmos, NEAR, Polkadot, Kusama, and Cardano, with rewards rates currently as high as 20%.
Visit the Invest > Staking tabs to start Staking on WhaleFin.
Why ETH2.0 Staking on WhaleFin?
WhaleFin Staking empowers its users to contribute to mainstream blockchain projects, earn rewards, and also participate in historic upgrades like the Merge of the Ethereum blockchain.
Among the tokens available for Staking on WhaleFin, ETH 2.0 is among the most popular.
The advantages of ETH 2.0 Staking on WhaleFin include:
Capitalize on the Merge to earn higher rewards
The APR rewards from Staking Ethereum can be quite attractive compared to other yield generation strategies, and it is currently as high as 4% on WhaleFin.
Contribute to the ecosystem
As more Ether is staked, the network becomes stronger because it takes relatively more Ether in order to influence the network.
No upfront hardware investment or variable energy cost
No energy-intensive hardware investment is required to participate in a proof-of-stake system.
Reliable yield generation
Yield earned on staked ETH is agnostic to market fluctuations and is automated– not dependent on the success of a trading strategy.
Why Staking on WhaleFin?
WhaleFin invests significantly on the security, safety, and privacy of its users and their assets.
Assets held on WhaleFin are protected by multiple layers of security:
Holder of the gold standard of security
WhaleFin is SOC 2 Type II- certified by Deloitte
Industry-leading asset custody
WhaleFin works with world-leading partners like Fireblocks to provide institutional-grade custody and protection for the assets of its users
$100 million worth of insurance policies in place
WhaleFin has pioneered safety in crypto custody by activating various insurance policies to improve risk mitigation for customer funds
Furthermore, Staking requires high uptime, frequent updates and maintenance attention, specialized computational hardware, and usually a significant starting balance. WhaleFin handles everything so that users can simply enjoy earning higher yields.
What are the risks of Staking?
When you stake collateral on a blockchain, your assets may need to be locked up for a variable period of time (vesting period), meaning that you can’t transfer, withdraw, and thus trade your assets during the vesting period. Furthermore, one of the risks associated with Staking is slashing, which is the loss of staked tokens for not fulfilling the network validation requirements. It is a risk that can be managed by choosing projects that have a high threshold on what could lead to the execution of slashing.
Remember to do your own research to understand and gauge the implications of Staking on a specific blockchain project.
About WhaleFin by Amber Group
WhaleFin, powered by Amber Group, is an all-in-one digital asset platform designed to empower you to diversify, manage, and grow your wealth digitally in a secure manner. On WhaleFin, you can buy, sell, trade, and invest in crypto with ease.
Download the app here.
Amber Group is a leading digital asset platform operating globally with a presence in Asia, Europe, and the Americas. We provide a full range of digital asset services spanning investing, financing, trading, and spending, backed by some of the best investors across the world such as Sequoia Capital, Temasek, and Tiger Global Management.
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