What is staking?
Staking has been known in the crypto-world as a viable way to make a passive income on holding digital assets. But what exactly is staking and what kind of staking opportunities are available today?
Staking is basically the process of holding cryptocurrency in order to verify transactions as well as support the network. In return, a user who participates in staking receives a reward. And of course, there’s always a chance to earn a bit on top of that when the asset’s price goes up.
Generally, there exist two categories of staking: PoS (Proof of Stake) and DPoS (Delegated Proof of Stake). In PoS, the stakeholder’s coins are frozen for a certain time to validate transactions. Due to network limitations, there is usually a minimum amount for staking in pure PoS systems. When it comes to DPoS, all stakeholders vote to assign a limited number of validators, which then carry out the functions of the network. Users with any amount can vote with their stake for validators.
Most of the time, it is possible to stake assets directly from the crypto wallet. Plus, many exchanges provide their users with staking services. However, it’s important to understand the Proof of Stake mechanism before taking up staking.
Unlike Proof of Work, creating a block in Proof of Stake systems doesn’t depend on solving hash challenges. It is based on the number of coins a user is holding. The Proof Of Stake algorithm essentially means that a person can mine or validate block transactions depending on how many coins/tokens they hold. The process can also include such factors as staking age or randomization. The process often starts with selling pre-mined coins or a switch from Proof of Work to Proof of Stake.
To forge the process, a person needs to lock a certain sum into the network as a stake that will determine the chances to be chosen as the next validator. However, different rules apply to each blockchain.
Dash is one of the leaders in the industry when it comes to staking as well as its main purpose, payments. Dash is a digital currency based on a decentralized peer-to-peer network. Created in 2014, Dash has focused its technology and use cases within payments, and with technological innovations such as InstantSend and ChainLocks, Dash is the most secure and among the fastest and affordable cryptocurrencies to use for payments. In fact, Dash means Digital Cash. Beyond this, Dash’s governance is well known in the industry for its Decentralized Autonomous Organization (DAO) implementation and Masternodes, which it pioneered in its early days.
Its blockchain consensus is attained with the help of both Proof of Work and Masternodes. The block rewards are divided between Proof of Work miners, Masternode operators, and the Dash Treasury, which is a fund able to be allocated to pay for development, marketing, and other necessary tasks. Masternodes vote on budget proposals to decide how the Treasury is allocated. Users have two ways to make passive income with Dash: either run a Masternode or lend Dash.
Masternodes are essentially the network’s high-powered servers. They provide a number of decentralized services, such as fast transactions and an extra layer of security on top of mining. For Masternodes, Dash uses the same concept as the Bitcoin network: they use a deterministic algorithm to create their pseudo-random ordering.
In order to stake, a Masternode needs 1,000 DASH to start earning block rewards. The rewards vary according to the current total count of active Masternodes. Masternodes receive 45% of the block reward. Since the quantity of active nodes always changes, the rewards vary depending on the current total of functioning Masternodes. The rewards are issued every nine days.
Where to try Dash staking?
Many exchanges offer Dash staking, which allows users to get easier access to the services from the FastPass ecosystem. With FastPass, a trader can complete routine deposits or withdrawals in minutes or seconds, instead of hours. This is presented in several use cases, such as quickly moving Dash across exchanges or into a trading platform to leverage market opportunities faster than others.
Users can choose from a wide range of partners across the network and find services that match their strategy and trading experience. This list includes Coinbase, WhiteBIT, KuCoin, Bibox, OrionX, HitBTC, and others.
SMART Staking by WhiteBIT is a good example of such an exchange. The platform has previously integrated Dash’s InstantSend. However, WhiteBIT’s staking is different from your regular PoS mechanism. It functions as a marketing tool rewarding users for holding the funds in their chosen asset. Therefore, on WhiteBIT you can ‘stake’ (i.e get rewarded for holding), even the non-PoS assets like USDT and BTC! The platform currently offers 26 staking plans with different currencies and conditions.
This May, WhiteBIT has launched two SMART Staking plans with DASH: one for 30 and one for 90 days with 0.5% and 1.8% interest rate respectively. This means that users can earn up to 7.2% yearly interest. The minimum holding amount for both plans is 0.5 DASH, while the maximum amount is 10 DASH, and therefore a great place to try staking out with small amounts. The interface of the exchange is user friendly and quite easy to navigate. Here is how to stake DASH on WhiteBIT in just a few steps:
- First of all, create an account on the exchange.
- Log in to your account and make sure you have some DASH on your Main Balance
You need Dash to stake it like any other cryptocurrency. One can do this by either purchasing Dash from WhiteBIT exchange
- If you already have Dash stored in another wallet or exchange, you can transfer it to your main WhiteBIT account. Click on the hyperlinks to be taken to a step by step for the process that is most relevant to your situation:
- Click “SMART Staking” in either the top or bottom menu.
- Find the two plans with DASH and choose the one you prefer (all the information is located under each plan).
- Type in the amount of currency you want to deposit and click the STAKE button (please note that you must have DASH available on your Main Balance to open a plan).
You will receive your interest after the end of the staking period. If you want to withdraw your funds before the end of the staking period, you can do so, however to get the interest reward, you are required to hold until the end of the staking period.
As you can see, the system is quite simple and straightforward. Such staking tools make earning a profit on Dash even easier. Set it and check in on it from time to time. Try it and grow your funds!