If you know something about investing and trading, you might have heard of “staking” many times. What is staking in crypto? Staking is a process when you commit your assets and hold them on the network and receive rewards for it. At the same time, holding your crypto helps support blockchain work. That is also the way networks verify transactions, as an alternative to a Proof-of-Work mechanism, but without expenses for mining equipment and electricity costs.
In simple terms, staking crypto is when you keep your holdings on a blockchain and get “interests” for it, thus generating passive income. Interest rates may vary from crypto to crypto. Assets that allow this option have a Proof-of-Stake protocol as a core. That is a much more energy-efficient way to receive crypto compared to Proof-of-work.
Many platforms enable staking options for users:
Of course, every crypto exchange offers different conditions for staking. Let’s see what White BIT offers.
Smart Staking With WhiteBIT
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The platform offers several plans of smart staking; each of them implies different interests for holding your crypto as well as the period of keeping your holdings on the exchange. Here is the guide on how to participate in smart staking:
- Pick the asset you want to stake and deposit your account.
- Find the list of staking plans available on the crypto exchange and pick the period and interest that suit you. You may use the filter function to sort out the conditions of your interest.
- Select the amount and press “Deposit”. There is min and max amount for each staking plan. Once you open a deposit, you cannot change the amount.
- Once the staking period is over, the plan ceases automatically, and you receive your funds to your balance. If you want to cease the staking before the plan ends, you will lose your interest.
Risks of staking crypto
Staking bears some risks. Since the crypto market is volatile and the rates may change sharply, it may happen that the staked asset rate drops, and this will outweigh your interest. Some small crypto projects attract investors with high staking rates, but you should keep in mind that young projects’ asset rates may drop sharply one day.
Usually, staked assets are locked in staking for some period, and you cannot take them out of there or sell them.