staking. Find out all about it.

staking. Find out all about it.

What is Proof of Stake (PoS)?

Proof of Stake A cryptocurrency consensus mechanism for processing transactions and creating new blocks on the blockchain. A consensus mechanism is a way to validate entries into a distributed ledger and keep this ledger secure.

How does staking work?

To create and verify new blocks, coin owners provide funds as collateral for the opportunity to verify blocks.When a coin is staked, its owner is validator.

A validator is then randomly selected to mine or validate the block. The network randomly chooses who gets access to mining, rather than using competition-based mechanisms like proof of work. The network selects validators based on stake size and holding period. Therefore, the participants who invest the most are rewarded. If a new block transaction turns out to be invalid, a user can have a certain amount of stake burned by the network in a so-called thrashing event.

To become a validator, coin holders must stake a certain amount of coins.For example, a Polygon is 1 Matic Users are staked before they become validators, but users must invest to become validators in Ethereum 32 Ethereum.

Blocks are validated by multiple validators, and when a certain number of validators confirm that the block is correct, the block is finalized and closed.

The Bitfinex soft staking program allows users to easily generate rewards simply by holding digital tokens on Bitfinex. Staking rewards for supported digital tokens can be as high as 10%* annually. Please read the FAQ for more information.

staking. Find out all about it.

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