How does staking work? ⠀ This is not the easiest topic in th | Crypto Ocean

How does staking work?
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This is not the easiest topic in the crypto market, but we advise to understand it (at least for general understanding)!

For many cryptans, staking is a way to earn rewards by holding certain cryptocurrencies. But even if you just want to earn rewards for staking without diving into the technicalities, you need to understand at least a little bit about how it works.

How does staking work?
If a token, from your portfolio, has a stacking feature in its functionality, it means that you can stack/lock it in a contract and get reward/return for it during the "lock-in" time.
The reason your staked token earns a reward is because the blockchain makes it "work," meaning your crypto, becomes part of a larger process. Something similar to your fiat money on deposit in a bank.

Ways of staking

Staking with Voting in DAO
For example, on Uniswap. Let's start with the simplest one - UNI. Staking on Uniswap, which allows you to get voting rights in DAO. In other words, by staking UNI you can vote for/against different proposals in the DAO.

Revenue Sharing
Next, let's look at a bit more complicated types of staking. Revenue Sharing is a mechanism in which a portion of revenue from an activity or product (such as commissions received from users) is distributed among network participants based on their contribution to that activity. The best example is GMX. This protocol provides an opportunity to stake a native GMX token, and get rewarded for it.

Launchpool
Let's take Binance Launchpool as an example, it is a staking program developed by Binance exchange. The program Launchpool gives the participants an opportunity of staking in several projects at the same time. Under this program, users can stake their tokens and receive rewards in new project tokens, which can then be sold on the Binance exchange or left as an investment.

Conclusion
• The average staking yield depends on many factors, such as the chosen protocol, duration of staking, number of staked tokens, and can range from 0.1 to 100 or even more %. You can always see the returns for different blockchains on Staking Rewards.
• If you have been holding tokens on hold for a long time, then staking can be a profitable option for you, as it allows you to get additional yield from your tokens.
• The risks of staking can include loss of investment in the event of protocol failure or other technical issues. It is also worth considering that the cryptocurrency market can be very volatile, which can lead to significant changes in token prices.

Did you manage to figure out what staking is?

- Yes, everything is clear
- There are a couple of questions

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