A DeFi staking platform is a decentralized application that enables users to lock or stake their cryptocurrencies in a blockchain network to earn passive rewards.
Types of DeFi Staking
Liquidity Staking
Liquid staking allows users to lock up assets while maintaining liquidity. To stake your tokens, you get access to special tokens that represent your staked assets. The participant can use that staked token to trade, lend, or use it on any of the DeFi platforms to earn incentives. In short, this is like you can enjoy the benefits of staking while still having the same assets in your hands.
Governance Staking
Governance staking is a unique DeFi staking model. Here, the token holders stake their crypto assets to gain governance rights. Instead of rewards, they are granted voting rights, allowing them to participate in the decision-making process of decentralized protocols. Apart from governance rights, this staking method encourages better community involvement.
Validator Staking
Validator staking is when users lock their tokens to become the validators of the network, to verify transactions, and maintain network security. In return, they earn rewards in the form of additional tokens or a percentage cut from the transactional fee. After completing the validation, the staked tokens get released back to the validator.
Yield Farming
DeFi Yield farming is when you stake your crypto assets across multiple DeFi protocols. However, the stakeholders here move around the assets strategically, aiming for higher revenues. Compared to regular staking, this has higher earning potential. This Yield Farming is most suitable for people who can take a slightly more complex path to earn bigger rewards.
NFT Staking
Unlike other categories that deal with fungible tokens, here the users can stake up their non-fungible tokens. The idea especially appeals to gamified ecosystems or metaverse platforms where NFT utility extends beyond mere digital collectibles. This new concept attracts many users as they can earn passive income without selling their NFTs.
Staking as a Service
Staking as a Service ( StaaS) is another best DeFi staking service that allows users to earn and stake rewards by giving their tokens to a third-party handler. Here, the users assign their tokens to professional validators or staking platforms to handle every technical part. In return, a small commission or service fee is deducted from the earned user’s rewards.
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