Am I understanding staking correctly?
Am I understanding staking correctly?
So bought my first Crypto last night pops party popper
I\’ve went with
70% Bitcoin 20% Ethereum 10% Alt coins (SOL, SUI, XRP)
Im already up £5 so it\’s all very exciting! What I\’ve seen on the app I\’m using (Kraken Pro) is on option to STAKE my Ethereum for 2.5-7%.
Struggling to find a solid answer on what this actually means so I\’m going to explain it the way I understand it and someone please tell me if I\’m right.
I can STAKE all 20% of my Ethereum for a period of time (maybe someone could clarify if I choose how long I want to STAKE my crypto for?) and after that period of time, I get 2.5-7% return on my 20% Ethereum?
During that STAKING period, my crypto is no longer traded/invested and does not gain any extra value.
The end product is I willl now have an extra 1.7 Ethereum if I had earned the 7% and this can now be traded/invested.
I also have the option for Bonded and Bonded Restaking if someone can simply what that means and what one is better or if either is more risky than the other.
Finally, is STAKING worth it? I plan on holding my crypto for a long period of time, adding to it from time to time.
Proof of Stake is a way to secure a blockchain. For a blockchain to be secure it’s important that who creates the next block is unpredictable. Proof of Stake allows a verifiable way to select apparently random block creators. This is true “staking” and it can only occur in a wallet that is actually part of the blockchain.
Exchanges doing staking, is something else entirely, basically they are using the term to give their shenanigans the air of verisimilitude. No way to know where the returns are coming from, but if they are staking your funds on the real blockchain and giving you a cut, you are losing out on some returns.