During what has become the longest bear market to date in cryptocurrency, it’s no surprise that anxious investors are eager to find alternative strategies to continue making gains during the downturn. One of those strategies, which has become a hot trend in crypto, is the practice known as staking.
In staking, investor-owned tokens are placed in digital crypto wallets and then used to validate transactions that create new blocks in blockchain networks. This, in turn, produces coin rewards that can increase the holder’s total asset value.
While vaguely similar to traditional banks’ interest-bearing accounts, the proof-of-stake (PoS) process can generate wide-ranging returns, depending on the coin type and amount held. Recent reports indicate that PoS cryptocurrencies have $4 billion in staked funds.