Word of the Day | STAKING

Staking is a way to put your assets to work by locking your cryptocurrency on an exchange or platform.

As a core mechanism in Proof of Stake (PoS) blockchains, staking allows you to commit your digital holdings directly to the network.

When you stake a cryptocurrency, you lock a specified amount in a digital wallet or protocol smart contract to serve as financial collateral. By doing so, you actively support the network's security and ongoing operations.

In return for your contribution, you earn cryptocurrency rewards, which are distributed based on the amount staked and the duration of your lockup. Total yield depends on factors such as overall network participation, lockup duration and the specific token emissions model. Essentially, staking allows you to generate passive income whilst underpinning the security of a blockchain network.

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https://www.dbm.academy/faq for more blockchain vocabulary.

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