Staking basically is the practice of storing and locking a predetermined quantity of bitcoin in a wallet to maintain a blockchain network's operations and in return, to be credited for doing so.

Earning interest on a savings account is identical to the method. Staking rewards are usually granted in the same cryptocurrency and represent a portion of the amount staked. This is a method employed in the proof-of-stake consensus mechanism to protect the network and act as a method of network validation.

This must have given you a better idea about what staking is, so moving ahead the next stop in this journey would be Locked Staking.

As an investor you readily think of investments and better returns on your invested assets, locked staking is some of this kind where a user can engage in the validation and administration of a blockchain network by locking up a particular amount of a specific cryptocurrency through a process known as "Locked Staking."

The user receives incentives for staking their tokens in the form of additional tokens or a portion of transaction costs. Isn’t it a great deal to lock some tokens as well as get additional tokens in return for taking them?

Yes, right as this is one of the greatest advantages provided by Locked Stacking.

To simplify, in other words, you can also understand that it is typically employed in proof-of-stake (PoS) blockchain systems, where the amount of tokens a user holds and stakes determines the number of tokens that are used to validate transactions and create new blocks, as opposed to the amount of computational power they contribute, as is the case with proof-of-work (PoW) systems like Bitcoin.

This must have eased & simplified the whole understanding of locked staking, now moving ahead we will discuss another type of staking called flexible staking.

What is Flexible Staking Meaning?

Flexible Staking enables the users to stake their tokens and earn rewards while also allowing them to withdraw or move their staked tokens at any point, without paying any fees. Traditional staking, on the other hand, usually entails users locking up their tokens for a predetermined amount of time, during which they cannot be moved or used.

Users of flexible staking have greater control over their assets and change their staking strategy as necessary.

This greater attainment of control over your asset using flexible staking is one of the main driving forces. You can readily see various forms of flexible staking and all of them are user-friendly.

"Continuous Staking" is also one such form of flexible staking which enables a user to stake their tokens and receive benefits continually, without a lock-up period. Users can also opt to un-stake their tokens at any moment, but doing so will result in a penalty that is often a percentage of the stake.

It's crucial to remember that different projects approach flexible staking and penalties individually, thus it is always recommended to study the project paperwork and know the details before participating. Participating in the governance and validation of a blockchain network can be accomplished either through flexible staking or locked staking.

After knowing what these stakings are and what they tend to do basically, you would really want to know how different these two types of staking are -  

On one hand, in a locked staking system users are required to lock up a certain amount of tokens for a specific period of time in order to earn rewards. They are not able to move or withdraw their tokens during this time, and failure to do so may result in penalties.

This type of staking is typically used in proof-of-stake (PoS) blockchain systems where the validation of transactions and the creation of new blocks is determined by the number of tokens a user holds and stakes.

On the other hand, flexible staking allows users to stake their tokens and earn rewards but also allows them to withdraw or move their staked tokens at any time without penalty. This type of staking is particularly useful for users who want to have more control over their assets and make adjustments to their staking strategy as needed.

Flexible staking can be seen as a trade-off between security and flexibility. Locked staking provides more security to the network, but it's less flexible for the users. Flexible staking is more user-friendly but might be less secure for the network.

It's also worth noting that different projects may have different implementations of flexible and locked staking, and different rewards, penalties, and conditions, so it's always best to read the project's documentation and understand the details before participating.

Now, as we end flexible & locked staking, we would readily move onto a different type & set of topics i.e. Hard staking Vs Soft staking as they always go hand in hand whenever we are discussing Staking.

What is Soft Staking?

Soft staking, as well as hard staking, are two different mechanisms for participating in a blockchain network's validation and governance.

Users may stake their tokens and receive rewards in a soft staking system, but they are also free to use or move their tokens without paying any fees. This kind of staking is frequently employed in networks where a user's token holdings and stakes affect the number of tokens that are used to validate transactions and create new blocks. Soft staking is less restrictive than other staking methods, giving users more control over their resources and the ability to change their staking strategy as required.

What is Hard Staking?

Hard staking, on the other hand, is a form of staking inside which users must lock up a particular quantity of tokens for a specific amount of time in order to get rewards. During this time, they are not permitted to move or withdraw their tokens, and if they do, they risk penalties. Hard staking is more restrictive and is generally used in networks where the amount of tokens a user holds and stakes determines the validity of transactions and the generation of new blocks.

It's important to note that different projects may have different implementations of soft and hard staking, and different rewards, penalties, and conditions, so it's always best to read the project's documentation and understand the details before participating.

Conclusion:

In addition to earning rewards, Stakers also play an important role in maintaining the security and stability of the network. By staking their coins, they are essentially committing to acting in the best interest of the network and helping to prevent malicious actors from compromising it. This is why many blockchain projects incentivize users to stake their coins by offering them a share of the network's transaction fees or other rewards. Another benefit of staking is that it can help to increase the value of a cryptocurrency. As more users stake their coins, demand for the currency increases, which can drive up its price. Additionally, staking can also provide a way for users to earn passive income, as they can earn rewards for simply holding and staking their coins.

(To Learn More About Staking, Click here)

Stake Bitcoin and other Cryptocurrencies with High APYs on Zelta.io.