Welcome back to our staking course right here at Cryptology.

In the first part we previously discussed and introduced the idea of crypto staking in an easy and digestible way. If you haven’t read through it yet then we recommend you do so before checking this part out. This is especially important if you’re new to the space and are only just getting started.

We want to make the blockchain and crypto to be accessible for all. Following our courses is a great introduction into this emerging industry.

So grab your pen and paper and get strapped back into our staking course!

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An Introduction to Crypto Staking

Crypto staking is a method of getting more from your cryptocurrency assets in the form of passive income. You lockup your tokens on a staking platform for a certain amount of time. This can depend on the place you choose to stake your crypto. From there the tokens are used as collateral for transactions to be verified. Collateral is needed if those who are validating transactions pass through any wrong ones. In turn these tokens are taken and staking rewards are decreased. 

Staking is a great way to earn extra rewards whilst becoming an active member on your favorite blockchain. Crypto staking came around in 2013 when the first stakeable token came about, known as Peercoin. 

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Understanding Proof of Stake

Proof of Stake (PoS) is the primary technology behind crypto staking.

It’s what’s known as a consensus mechanism. These are programs that are used on the blockchain to allow networks to come together and complete tasks at a shared agreement or consensus. These consensus’ are used to mine crypto on a network which in turn generates the rewards for you. The first consensus mechanism used in crypto was Proof of Work (PoW) for the Bitcoin network. It became clear that as time went on the energy consumption for Bitcoin mining was increasing and not sustainable.

Proof of Stake was then later proposed, which became a more energy efficient consensus for the blockchain. Now instead of the power used to determine mining rewards, it was reliant on the amount of crypto you put into the pot, or in other words how much you staked. Ethereum is the one of the most notable Proof of Stake tokens and allows cryptocurrency staking like no other. 

While created in 2013, Ethereum didn’t make the change to PoS until its Ethereum 2.0 update in 2022. Initially it was a PoW blockchain until blockers we mentioned above were hit and a change was in order!

Proof of Stake has birthed many different ways to stake crypto and earn staking rewards. These include many different protocols and scaling layer solutions such as:

• Polygon (MATIC)
• The Sandbox (SAND)
• Solana (SOL)
• Arbitrum (ARB)
• Immutable X (IMX)

Use cases for blockchain have developed dramatically since the first emergence of PoS crypto in 2013. It can now be used within not just finance but  gaming, NFTs, artificial intelligence and others to name a few.

Crypto gaming and Play to Earn is becoming really popular and the implementation of staking in these titles gives players new ways to earn and put their utility tokens to use.

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The Mechanics of Staking

Cryptocurrency staking mechanics are quite straightforward to understand. The setup of staking crypto is important for it to operate and opens up the doors for the earnings to happen.

There are two main components to staking. They are:

1. Nodes
2. Node operators

Nodes 

Nodes in cryptocurrency staking are essential components of blockchain networks that validate transactions and secure the network. Nodes perform various tasks such as verifying transactions, proposing blocks, and reaching consensus on the state of the network. They can consist of an individual who has set up the node themselves or a staking pool on a platform consisting of multiple people who have pooled their crypto together.

When on the Ethereum network to set up your own nodes you must stake 32 ETH. This can be inaccessible for newcomers therefore you may want to stake on a platform that sets up the nodes for you, reducing the setup costs.

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Node Operators

The next piece of the puzzle is Node operators. They earn rewards in the form of additional cryptocurrency by validating transactions that are put through the nodes on the blockchain. They are almost like a security guard for the blockchain and ensure there are no illicit transactions verified. To earn the most amount of staking rewards, becoming a node operator and setting up your own nodes is the way to go. 

But just staking on a regular platform is the best way to get involved if you’re just getting started.

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Choosing a Staking Platform

Now if you have gotten this far you will be wondering what’s the best staking platform to get started on. Different platforms offer different services. For example you can choose a platform like Cryptology for custodial staking where we look after the nodes for you and operate them ourselves. 

When choosing our platform you give up a lot of the extra work and stress, simply collecting your rewards at the end of the lockup period. We offer flexible staking options for all, meaning you can withdraw your funds as and when you please.

If you’re more experienced than you can choose what’s known as non-custodial staking. This leaves the responsibility on you to ensure that you set up the staking process. 

There are different decentralized finance platforms that allow you to do this such as exchanges like UniSwap. 

One of the main differences between the first and second option is the fact that a custodial staker does it directly from their wallet and keeps ahold of their private keys. There of course can be extra security implications when you hand over your private keys to a third party so be sure to choose wisely and do your own research. 

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Staking on Cryptology

Staking on Cryptology is simple. We offer convenient lockup periods that are highly flexible. Our APR returns are one of the highest the blockchain has to offer, reaching up to 21% for your staked crypto. 

Follow these steps to get started with us on your staking journey!

1. Sign up to Cryptology exchange.
2. Pass the Level 2 KYC process to unlock all of our features for your profile.
3. Once passed and set up, add the relevant crypto to your Cryptology wallet. You can do this via our Buy Crypto page using your normal bank card.
4. We offer 5 different tokens to stake ETH, DOT, GRT, SOL and KSM.
5. Alternatively you can switch over funds from another crypto wallet.
6. Next you choose whether you want flexible or fixed staking, ultimately deciding the APR returns and the lockup period.
7. Sit back, relax and let the passive income commence. You can track your earnings via our designated staking dashboard on our website!

Be sure to check out Cryptology staking for an unbeatable staking experience and returns potential! To learn more about staking and crypto be sure to check out the Cryptology academy.

You can also follow us over on Twitter/X for updates on new additions to our courses as well as our FREE crypto newsletter!

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