Staking

What is Staking?

Staking in the blockchain context refers to the commitment of cryptocurrency assets to support network operations and security. In Ethereum's Proof of Stake (PoS) model, validators, or staking providers, are tasked with validating transactions and blocks while maintaining network integrity. They are incentivized through rewards paid in ETH for their honest participation and efforts to deter malicious activities.

The Role of Staking in Blockchain Integrity Staking's primary technical purpose is to ensure a decentralized and secure network. It encourages user participation in maintaining the blockchain’s operations, validating transactions, and preventing harmful actions.

How Does Staking Work?

General users have two options for staking

1. Self-running a validator (Stake-at-Home movement) requires a collateral of 32ETH.

2. Using a staking provider.

The high entry barrier of 32ETH for self-run validators led to the development of protocols like Lido and Rocket Pool. These platforms democratize participation in network validation, making it accessible without substantial capital.

Liquid Staking and Accessibility

In traditional PoS systems, staked cryptocurrencies are locked and become inaccessible for a duration. However, with liquid staking derivatives, users retain some liquidity of their assets while contributing to network consensus and security. This innovation aligns with Ethereum's ethos of permissionless access and opportunities for all.