From Bitcoin to Tron, all blockchains have one thing in common: their transactions require validation. For Bitcoin, one of the most popular blockchains, the process of transaction validation uses a method referred to as proof of work (PoW) consensus, which is energy-intensive. This fact and the emerging demand for a green global economy have made the second method of transaction validation, proof of stake (PoS), to become very popular. Unlike PoW, PoS is a consensus mechanism that gives stakers the opportunity to confirm transactions for a reward and also vote on important decisions.
To make more from crypto staking, you should consider working on an appropriate DeFi platform, but how do you select the best? Here are some useful tips to help you pick the best platform for staking your cryptocurrencies.
A Closer Look at Staking: How Does It Work?
Cryptocurrency staking in decentralized finance is the process of locking up your coins in a PoS blockchain to help confirm transactions. Staking also helps to secure the network and with its governance. As an incentive, you are rewarded with part of the transaction fees or new coins, depending on the model used by the selected platform.
Although you can stake the selected cryptocurrency on your own, the logistics are likely to make it pretty challenging. For example, many people find it very challenging to run their computers without turning them off. Again, the amount you are likely to get in reward is likely to be low if your coins are only a few.
This is why it is a good idea to work with an appropriate DeFi network for cryptocurrency staking. The platforms pool together the stakes from different participants, increasing the chances of founding new blocks and adding them to the chains.
Tips for Selecting the Best Decentralized Finance Platforms for Staking
For people with cryptocurrencies, staking is seen as an excellent way of creating a new stream of revenue. This is why it is important to work with the best DeFi platform, and we are going to list useful tips to assist you in selecting the best:
- Easy to Use
As we mentioned earlier, the process of staking can be complicated because of the long list of logistics that stakers need to understand. However, a good DeFi platform should have an easy-to-use platform that allows you to check presented coins and make the right decision easily.
- High Security of Users Coins
It is not uncommon to hear cases of hacks that resulted in the loss of millions of coins worth millions of dollars in pools. Therefore, you need to review the security of the selected pool to ensure that it can protect your coins and winnings. To do this, it might be a good idea to read through previous clients’ feedback to establish what they have to say after using the platform. Even when they provide positive feedback, ensure to carry further due diligence to ensure the platform is the best for you.
- Should Have Many Products and Services
To optimize the utility of a platform, only select the one that offers other services of interest. For example, a DeFi platform that also offers lending services can come in handy if you need to borrow funds at a rate lower than the conventional banks.
The success you can get in crypto staking depends on the selected DeFi platform. In line with the tips we have listed above, one of the best DeFi platforms out there today is Mantra Dao.