FAQs
What are the different staking solutions?
Earning staking rewards is a great source of passive income. There are several ways you can stake your crypto assets:
Self-staking: This means running your own node and becoming a validator while staking your cryptocurrencies. Normally, a minimum staking amount is required, for example, 32 Ether if you want to be a validator for the Ethereum network. At the moment, you need more than $62K in order to buy 32 Ether. Assuming you have the minimum required amount, there are two ways you can stake: an additional investment in the necessaryhardware and some technical knowledge to set up a node. Alternatively, you can use paid services such asAllnodes to run your own hosted nodes. Self-staking is safe because you hold your own private keys.
Join a staking pool: If you do not have the minimum amount required and still want to stake and earn rewards, you can join a staking pool where multiple participants pool their tokens together to grant the pool operator validator status. In return, each token holder gets a share of the total rewards. A staking pool can be centralized, e.g. offered by a centralized crypto exchange such as Binance, or decentralized, e.g. offered by a decentralized finance protocolsuch asRocketPool.
Liquid staking: This is what we discussed in this article. Stakers can earn staking rewards while still utilizing the liquidity of their crypto assets.
What is a liquid staking APR?
A liquid staking APR (annualized percentage rate) is how much a staker will get as a staking reward for staking a fixed amount of chosen crypto asset with the liquid staking platform. From the staker’s point of view, it is called APY (annualized percentage yield). This rate is not fixed; it fluctuates every day.
Is liquid staking decentralized?
Liquid staking platforms can be centralized or decentralized, depending on the service provider. There are a number of decentralized liquid staking protocols such as Lido, Rocket Pool, Parallel Finance, and Ankr. There are also centralized exchanges offering liquid staking services such as Coinbase, and OKX. Here is an overview of liquid-staked ETH distribution.
