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Staking in Crypto and How it Works

by root

Staking is a concept we often come across when it comes to cryptocurrencies. To understand staking, it is first necessary to have a basic understanding of the consensus mechanisms in blockchains. Although there are different consensus mechanisms in the blockchain world, which is rapidly developing and very open to innovations, there are two most common and most frequently used consensus mechanisms. These consensus mechanisms are Proof of Work (PoW) and Proof of Stake (PoS). If that cryptocurrency allows you to mine, that cryptocurrency is using the PoW mechanism. However, PoW has a problem like a scalability. In addition, the PoW mechanism consumes a significant amount of energy to perform its transactions. Because of these adverse features of the PoW, the PoS mechanism has been developed. Currently, there are many blockchains that use the PoS. This is where staking comes into play. Let’s take a more detailed look at the concept of staking.

In the PoS consensus mechanism, just like in PoW, validators are needed to validate the transactions. In the PoS, validators are selected from among those who stake there. This is all to say, in order to approve transactions and create new blocks in the PoS system, blockchain users must have the relevant cryptocurrency and lock these coins/tokens. A lock of cryptocurrencies is a promise that the coin will not be withdrawn from the ecosystem within a certain period. While you still own this currency, you cannot use this cryptocurrency only for a certain period. The process of locking cryptocurrencies on the blockchain is called staking. In the PoS mechanism, you also contribute to the operation of the system by staking the cryptocurrencies you own. Users get a certain amount of related coin/ token returns in response to this locking promise. In PoW, users earn a certain number of rewards for their mining operation, while in PoS, they have the chance to earn passive income by promising to keep their cryptocurrencies in this system. In this way, you can earn income in an environmentally and sustainable way with no extra equipment, as in PoW.

staking

How To Perform Staking?

No extra equipment is required for staking. All you need is to have the native token of the blockchain you will stake. Even if the staking steps vary according to the relevant blockchain, you can basically perform the staking as described below. One option for staking is cryptocurrency exchanges. The dominant crypto exchanges of the market such as Binance, Coinbase, and Kraken provide staking. These crypto exchanges allow for staking within their own systems. You can buy any crypto using the PoS mechanism from these exchanges and then stake it inside the exchange. This process is quite easy, but here you can only stake certain cryptos that the exchange allows. Another method you can choose for staking is through a crypto wallet. You can do this by depositing the cryptos in your crypto wallet to the blockchain you will stake. This method is also ideal for staking your OMCs. For this process, you need digital crypto wallets such as Metamask, and WalletTrust. You can easily download these digital crypto wallets at no cost and store your crypto securely with these wallets. At this point, the most important point that you should pay attention to is that you provide the passwords of these wallets securely. Otherwise, you will lose access to your wallet and unfortunately, this is irreversible.

Why Should I Stake?

Staking is beneficial for both the user and the relevant blockchain. With staking, while you earn passive income, you also ensure the security of the blockchain and contribute to the execution of transactions. If you have the relevant cryptocurrency, keeping it in your wallet will not do you any extra good. But by staking, you allow your money to earn you extra income without any effort. With staking, you can have a say in consensus on a blockchain. This means that you have a say in ensuring the accuracy of transactions to be made on the blockchain. By staking, you will increase the security of blockchains. Staking, unlike mining, is environmentally friendly. Powerful computers are not needed to verify transactions, as is the case with the PoW consensus mechanism. This eliminates the need for extra equipment. More importantly, there is no high energy consumption at the time of these calculations. All you need is to have the corresponding crypto. In this way, you earn cryptocurrencies in a sustainable way without any negative impact on the environment.

How To Stake Your OMCs

Staking your OMCs is a fairly simple process. How to do this is explained step by step below. First, go to https://stake.omchain.io/. Here, click on the Connect Wallet Button located in the upper right corner of the page.

Here you will see two options. You can stake your OMCs with your Metamask or Trustwallets. Link your wallet by choosing the wallet that your OMCs hold. Once you have linked your wallet you are now ready to stake your OMCs. Enter the amount of OMC you want to stake in the “Enter Amount” box on the page that appears. While the minimum stake is 100, you can lock your OMCs for a minimum of 30 days.

After entering the amount, click the Stake button next to the box.

After pressing the stake button, press the Accept button to confirm the transaction on the page that will appear. As the last step, it is necessary to confirm this transaction in the wallet module. After looking at the Accept button, the wallet module opens in the upper right corner of the page and you can complete your transaction by pressing the confirm button here.

That’s how simple it is to stake your OMCs on OMChain. In this way, you can both contribute to the OMChain ecosystem and increase your OMCs and earn a passive income.

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