What is a staking reward? Have you even heard of staking or staking rewards?
Staking rewards are an incentive that blockchains provide to participants. Each blockchain has a set amount of crypto rewards for validating a block of transactions. When you stake crypto and you’re chosen to validate transactions, you receive those crypto rewards. Make sense now? Keep reading
With proof-of-stake, users validate their transactions according to how many coins they contribute, or stake. In return for staking more coins, users have a higher likelihood of being chosen to validate transactions on the network and earn a reward. Almost sounds like an influencer.
This reward can include an annual percentage yield, and the exact percentage depends on which blockchain is used.
Each blockchain uses different requirements to stake, along with different risks associated with doing so.
Sometimes, there are restrictions on how soon you can take out your cryptocurrency after staking, certain penalties for not actively validating transactions, a minimum amount needed to stake, etc.
To distill this down further, if you stake a lot of crypto, you can earn basically interest or a return, over and above the conversion rate.