Staking is a phenomenon in which people participate in the process of block formation in any blockchain, based on the Proof-of-Stake consensus algorithm. In the context of the Tezos blockchain, this process is called baking. Anyone holding any amount of Tezos coin has the right to stake on this platform, i.e., produce and sign a block and receive financial rewards according to their stake.
The only requirement to use your rights to stake or bake is to run a node with baking software and keep it updated on the platform. Another easy way to utilize this feature of staking on Tezos is delegation. In this process, one can entrust his staking/baking rights to another baker instead of setting his own node. This feature lets a person earn staking rewards without utilizing his time and energy in maintaining a node.
Is Staking Tezos Profitable?
Following are some of the reasons for which staking is absolutely a try worthy of being taken by anyone on Tezos:
- Staking is a source for earning a passive income by participating in the block-making process of the Tezos network. Currently, 6% is the annual yield of Tezos (including the validator’s fee). After waiting for the first reward for about a month or a little more, one can expect a reward after every three days.
- Token holders on Tezos are able to give their rights of validation to other validators while remaining the owner of their tokens. One can even delegate his whole account to Tezos.
- Another factor that makes Tezos staking worthy of being performed is its liquidity. Delegation of Tezos coins to someone is a completely liquid process, in which the person is always free to move his tokens. This is because of no freezing period at the time of delegation to a validator.
- There is particularly no risk in delegating Tezos coins, except the possibility of not earning the expected reward. So one must carefully choose his validator so that the amount of reward and quality of service continues progressing.
So, we can conclude by saying that staking and delegating on Tezos is very simple, secure, and worthy of it. If one has any amount of coins in Tezos, he definitely should stake or delegate them, as they would not be locked, and one would only earn staking rewards. So it is a good source of side income, as one only needs to wait patiently for some days, more or less than a month.
Also read: Is Tezos Better than Ethereum? – A Detailed Comparison Between The Two Cryptocurrencies
Takeaways
- Tezos provides a feature of staking and delegation in which people can participate in the block-making process of the blockchain.
- It is a simple and secure way to earn side income just by maintaining a node.
- After staking, the user just has to wait patiently first for a month and then for some days for each staking reward.
- If one has any amount of coins in Tezos, he definitely should stake or delegate them, as they would not be locked, and one would only earn staking rewards.