2022-05-09 22:20:00
Centralized and decentralized staking poolsIn our post “The different ways to use Toncoin,” we briefly touched on staking pools, when a tokenholder passes some coins to a validator and receives a reward in return.
Staking pools are a convenient use case for cryptocurrencies because they’re accessible to everyone.
Since the TON ecosystem is starting to see more staking pools sprouting up, we’ve decided to dive deeper into centralized and decentralized staking.
What is a centralized staking pool?This is a pool whose safety and reliability are guaranteed by either a specific person or a team.
This is what participating in a centralized staking pool looks like: You send some Toncoin to a validator’s wallet, which is obliged to add that crypto to its stake and share a cut of the profits made from the validation process with you.
During this process, your staked funds will be under the control of the validator. However, there’s nothing to fear if you’re dealing with a reputable and trustworthy team or individual, but you would be taking on all the risks inherent in centralized services.
What is a decentralized staking pool?This kind of pool operates via smart contracts, self-executing code that guarantees the fulfillment of pre-determined conditions without the participation of humans.
By sending Toncoin to a decentralized staking pool, you do not relinquish the rights to your tokens to other parties.
The smart contract will automatically add your tokens to the validator’s stake, automatically pay out validation rewards, and transfer your tokens back to your wallet upon request.
Decentralized staking is safer than centralized staking; however, the former does have its own set of risks. For example, bad actors could hack or exploit a smart contract, which would result in you losing your staked tokens.
Therefore, before you stake your Toncoin, it’s worth looking into the smart contract to check whether it’s reliable and created by professionals.
An excellent example of a decentralized staking pool is the TonWhales team, which launched the first smart contract-based pool in the TON ecosystem. Moreover, we’re expecting decentralized staking pools from the TON Foundation shortly.
62.8K viewsedited 19:20