What is Cryptocurrency Staking? How does it work?

Introduction

A profitable crypto trade involves investing in a cryptocurrency of your choice at a certain price and selling it when the price increases.

But the world of crypto is constantly evolving and opens doors to many different transactions. This also means that traders have more avenues to leverage cryptocurrencies to earn more.

Crypto Staking is a new way for you to earn passive income using your cryptocurrency.

What is Crypto Staking?

Simply put, the process of earning passive income through crypto staking is similar to putting your cash in a savings bank account and earning interest on it.

When you put your cash in a bank, the bank uses that money for its other businesses. This includes various pooled investments that the bank makes. At the end of a term, the bank is required to pay you interest because you chose to park your money with them.

Crypto Staking also involves you depositing your cryptocurrency with certain trustworthy protocols. These gather cryptocurrency from investors without purchasing them.

They use these cryptos to increase the blockchain, which results in getting more cryptos as rewards. These rewards are then distributed to you and various others who staked their cryptos.

This means that your idle cryptocurrency is now being used in an attempt to contribute towards blockchain development. To understand this, picture adding blocks to a line of existing blocks. Every time a block is added, it is equivalent to a task or a level being completed which generates rewards.

It is similar to what banks do, using your money to make certain investments that in turn generate more money.

Why should you choose staking cryptos rather than depositing money in a savings account?

Higher Rewards

Staking cryptocurrency generates a much higher interest than any regular bank.

Enjoy Benefits

When you stake your cryptocurrency, you can continue to enjoy the benefits of any fluctuations in the price of the cryptocurrency. This means that if you stake your crypto for 60 days and its price goes up, after 60 days, you can sell your crypto for a profit and also earn interest through staking it.

Generate Passive Income

It is an easy way of generating passive income using cryptocurrency without the hassle of the equipment of crypto mining. It essentially translates to lending your crypto to someone and letting them do the work for you while you earn interest. ZebPay Earn and ZebPay Lend make this process as simple as a click. You can also track your daily earnings through ZebPay!

But high rewards come with high risks. What are the risks of crypto staking?

If you’re a seasoned crypto trader, you know that the value of cryptocurrencies is very volatile and can change rapidly. If you have staked your crypto, you will not be able to sell it for the duration of the stake.

Another important risk is that the benefits of staking cryptos largely depend on the success of the network. Therefore, it becomes essential to stake your cryptos only to trustworthy sources. The best cryptocurrency exchanges like ZebPay actively work to ensure the complete safety of your investment.

While new cryptocurrencies emerge every day, crypto staking is only allowed for a select few currencies currently. This unique method of earning passive income is swiftly gaining popularity, especially for those who want to reap more benefits from their cryptocurrency without getting into the technicalities of crypto mining.

Ready to start staking your crypto to earn passive income? Head over to ZebPay for a smooth transaction!

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