The Tezos news from earlier this month showed that the concept of staking is getting more and more popular and good for investors. In the past 12 months, we could see cryptocurrency holders from everywhere around the world demonstrating a remarkable shift in sentiment after the huge uptick in cryptocurrency trading volume burned the hands of many traders.
This is why both short-term and long-term holders started looking for new low-risk and stable investment options which generate a healthy profit. Staking is getting more popular apparently, and remains as one of the most promising systems that generate substantial yields for stakers over the long term.
Do you know why?
Well, staking is getting more popular because it is a low-risk alternative. Knowing that investors nowadays either enter the long-term hold mentality and leave their crypto untouched or start trading on spot or derivatives markets, staking offers a good third option.
Because of this, rather than taking risks and attempting to trade crypto or relying on simple price appreciation, many crypto holders are beginning to look for ways to grow their portfolio in a way that is risk-free but still generates a healthy return.
And exactly this is why staking is getting popular – as a process that sees cryptocurrency holders locking up a stash of Proof-of-Stake coins in return for regular rewards. Right now, there are more than two dozen POS coins in the altcoin news which support staking.
Some of the most popular include Tezos (XTZ), LOOM and V-Systems (VSYS). With an average yield of 12.49% per year, staking is definitely a viable passive income stream for many people with low-risk appetite.
The original consensus model which shows that staking is getting more popular is based on keeping blockchains secure and free of corruption – known as Proof-of-Work (POW). For POW cryptocurrencies, the transaction validation process is carried out by miners that typically use specialized hardware to discover blocks which are then filled with confirmed transactions.
So, both safe and with low risks involved, staking is getting more popular as an option that ensures real trading with real rewards.
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However, the process is also very energy-intensive which is why there are various alternatives on the market right now. Proof of Stake (POS) and various off-shoots still remain the most popular examples.
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