What Are the Risks and Rewards of Crypto Staking on KriptoEarn? - Kriptomat (2024)

With crypto staking your digital assets can earn rewards while you go about your daily life. KriptoEarn, a feature of the Kriptomat platform, offers a unique opportunity to engage in this lucrative activity. But what exactly does staking entail, and what makes KriptoEarn stand out in the crowded field of cryptocurrency platforms?

Staking might sound complex, but it’s essentially a way to put your cryptocurrencies to work, earning additional tokens just like interest in a savings account. However, with higher potential rewards come certain considerations, especially around lock-up periods and market volatility.

In this article, we’ll dive into the ins and outs of staking on KriptoEarn. From understanding the process and benefits to navigating the potential risks, we aim to provide you with a comprehensive guide to make informed staking decisions. Let’s demystify crypto staking and uncover how you can make your assets work for you.

What is KriptoEarn?

KriptoEarn offers a straightforward, user-friendly platform for on-chain staking, making it accessible even to those who are new to the concept. It integrates directly with your Kriptomat wallet, allowing for seamless staking of your digital assets.

One of the standout features of KriptoEarn is its commitment to security. On-chain staking means that your assets are stored securely on the blockchain network of your choice. This approach not only ensures the safety of your investments but also contributes to the security and stability of the blockchain itself.

By staking through KriptoEarn, you’re not just earning rewards; you’re also participating in a system that promotes the integrity and resilience of blockchain technology. Find out more about KriptoEarn in our comprehensive guide “KriptoEarn – Basics”.

What is on-chain staking and what are the benefits?

On-chain staking is a key aspect of the cryptocurrency world, offering a way for investors to earn rewards directly on a blockchain network. It contrasts with commercial staking, where a third-party service manages the staking process for you. In on-chain staking, you hold and stake your cryptocurrency tokens directly on the blockchain, participating in the validation of transactions and network security.

The benefits of on-chain staking over commercial staking are notable:

• Decentralisation: On-chain staking involves direct participation in the blockchain network, promoting decentralisation and reducing reliance on intermediaries.
• Control: You have complete control over your tokens, allowing you to manage them as you see fit, including when to stake or unstake.
• Transparency: The entire staking process is visible on the blockchain, enhancing trust and reducing the risk of fraud or manipulation.
• Potentially higher rewards: As there are no intermediaries, on-chain staking often offers higher rewards than commercial staking.

KriptoEarn takes this concept and streamlines it, making on-chain staking accessible and straightforward, even for those new to crypto. By integrating the staking feature within the Kriptomat platform, KriptoEarn handles the complex details while providing the benefits of secure and transparent on-chain staking.

Rewards of staking with KriptoEarn

When it comes to enhancing your crypto portfolio, staking with KriptoEarn presents a promising opportunity. The platform offers more than just a safe place to store your digital assets; it allows them to grow. By staking your cryptocurrencies on KriptoEarn, you earn rewards in the form of additional tokens. This process is similar to earning interest with a traditional savings account.

Besides the benefits discussed in the previous section, staking on KriptoEarn is advantageous for several other reasons:

• Compound interest: This means that not only do you earn rewards on your initial staked amount, but over time, you also earn rewards on the rewards. This compounding effect can significantly increase the growth potential of your portfolio. As your staked assets generate more tokens, these additional tokens are automatically reinvested, thus continually increasing your earning potential.
• Zero fees: One of the key advantages of using KriptoEarn for staking is that it charges no fees for the staking service itself. This means you can stake your cryptocurrencies without worrying about additional costs cutting into your rewards. You should note that there are network charges associated with staking and unstaking transactions. These fees are not set by KriptoEarn but by the underlying blockchain network used for staking.
• Slashing insurance: Slashing refers to a penalty imposed on node validators for misconduct such as double signing or network instability. This penalty typically involves a partial loss of the staked tokens, serving as a deterrent against harmful actions to the network’s integrity and security. To mitigate this risk, Kriptomat offers slashing insurance for its users. This insurance is designed to protect stakers on the platform from the financial consequences of slashing. It provides an added layer of security and peace of mind for those investing their assets in staking activities.

Kriptomat offers staking for the following 7 cryptocurrencies. This are the current APY (staking rewards) and lockup periods (minimum withdrawal time):

How to stake assets on KriptoEarn

The staking process on KriptoEarn is designed to be user-friendly and efficient, allowing both new and experienced crypto users to participate easily.

1. Choose the cryptocurrency you wish to stake and specify the amount. You can either enter a specific amount or select a percentage of your crypto holdings.
2. Review the details such as the lock-up period and any applicable fees and confirm your transaction.
3. After confirming your choice, your transaction will be processed. The time taken for assets to get staked on the network can vary based on network conditions.
4. Once your assets are staked, you start earning rewards in the form of additional cryptocurrency. These rewards are distributed periodically, depending on the staking protocol. After every reward distribution, your reward is added to your KriptoEarn balance and merged with the deposited balance.

KriptoEarn offers the advantage of compounding your staking rewards. This means the rewards you earn are automatically reinvested, increasing your staked amount and potentially leading to higher earnings over time.

The staking process on KriptoEarn is not just about locking your assets; it’s a strategic move to grow your investments. Learn the exact steps of how to stake and unstake assets with KriptEarn in our detailed tutorials “KriptoEarn – How to stake/unstake your assets” and “How to stake/unstake funds to KriptoEarn via the Mobile App”.

Limitations to consider when staking with KriptoEarn

While crypto staking can present several risks, with KriptoEarn, these risks are minimal. These are the key limitations that you should keep in mind when using KriptoEarn:

• Lock-up periods: When you stake your crypto, it is locked up for a specified period, ranging from several days to several weeks. This affects the liquidity of your assets as it means you can’t access or use them during this time. If you need access to your funds, you won’t be able to withdraw them until the period ends.
• Market volatility: Crypto markets are known for their high volatility. The value of your staked crypto might go up or down during the lock-up, impacting your investment’s overall value.
• Smart contract risks: Vulnerabilities or bugs in smart contracts used for staking can lead to loss of staked assets or rewards. This is especially true when staking MATIC as staking on its blockchain involves interacting with smart contacts.

To sum up

In summary, staking on KriptoEarn presents an enticing opportunity for cryptocurrency enthusiasts looking to grow their digital assets. With its user-friendly platform, secure on-chain staking process, and the advantage of compound interest, KriptoEarn offers a practical way to earn rewards.

As the world of cryptocurrency continues to evolve, staying informed is key. We encourage you to explore further educational resources available on Kriptomat. By signing up for a Kriptomat account, you not only get access to KriptoEarn but also a wealth of other trading tools to enhance your crypto journey. Whether you’re a seasoned investor or just starting out, Kriptomat’s features can be a valuable addition to your crypto strategy.