Staking has become one of the most popular new methods to potentially generate an investment income in the digital asset markets. However, staking involves a certain degree of technical expertise that not every investor possesses. As a result, staking as a service providers have emerged.
In this guide, you will learn what staking as a service is and how these providers can help you potentially earn digital asset investment income.
How Staking Works
Staking is one of the newest ways of potentially profiting from the digital currency markets.
Statistically speaking, the amount you can earn from staking can be calculated based on how much you have staked and what the expected annual staking returns are. As long as people use the digital currency, you should get paid.
On a basic level, here’s how staking works:
- Instead of thousands of computers battling to provide proof of work (PoW), only one is selected to show proof of stake (PoS).
- The “winner” is chosen using a probability based on how much of the coin they own and have put up for stake (i.e., have locked up as collateral). They then validate the transaction.
- After PoS has been performed, the PoS validator is rewarded with a fee in the form of newly minted coins.
What Is Staking as a Service (SaaS)?
To stake, you need to hold stakable coins, require the technical know-how to perform the staking process, and you need to be able to run your computer 24/7 to maximize staking rewards. Not everyone can fulfill these criteria.
The solution: Staking as a service.
Staking as a service platforms help you to stake by handling the technical process for you in exchange for a small fee (usually as a percentage of the staking rewards).
Generally speaking, to use a staking as a service provider, you register to the platform, send the coins you want to stake to the provider, and you are set to go.
You can find a list of staking providers here: Crypto Staking Providers, Rated and Reviewed
Is Using a Staking as a Service Platforms a Good Idea?
The decision as to whether or not to use a SaaS platform is simple. If you are comfortable that you can stake on your own, you will probably not need one. However, if you prefer to have someone else handle the staking process for you (for a fee), then SaaS platforms provide an excellent option.
Keep in mind, however, that you earn money two ways with staking: the PoS reward and the increase in value of the coin. The second earnings vehicle could, of course, break down; the currency could drop. It’s possible for the coin to drop so drastically that your staking earnings are significantly offset, completely erased, or flipped into losses. Hence, if the value of the coin plummets significantly, you could still end up losing money.
Finally, you should only use a reliable staking as a service platform that you have chosen after thoroughly researching all options, and you need to be smart about your choice of stakable asset. Research your best PoS coin investment opportunities before making a decision on what coin(s) to stake, should you decide to start staking digital assets.
Related Articles:
- What Is Crypto Soft Staking and How Does It Work?
- Best Staking Coins, Rated and Reviewed for 2019
- Ethereum Staking: What is It And How Can You Make Money With It?
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