Staking crypto assets refers to the system of locking tokens away in a smart contract in order to be selected to participate in the blockchain validation process and earn rewards.
It’s worth noting that any coins you delegate to a staking pool are still in your possession. You can always withdraw your staked assets, but there’s usually a waiting time specific to each blockchain to do so.
Cryptocurrencies are volatile. Drops in price can easily outweigh the rewards you earn. Staking is optimal for those who plan to hold their asset for the long term regardless of the price swings.If you decide to withdraw your assets from a staking pool, there is a specific waiting period for each blockchain before getting your coins back.
Staking pools can be hacked, resulting in a total loss of staked funds. And since the assets are not protected by insurance, it means there’s little to no hope of compensation.Staking is a good option for investors interested in generating yields on their long-term investments and aren’t bothered about short-term fluctuations in price., the average staking reward rate of the top 261 staked assets surpasses 11% annual yield. It’s important to note, though, that rewards can change over time.
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