Quote:
Originally Posted by filthyvermin
what is staking?
only answer if you feel like it. it's not a big deal
In PoS chains validators deposit crypto to the network as a stake. In the chain the next validator of a block is chosen based on amount each node has staked. The higher the stake the more likely it is that they get chosen to validate the next block. If they would accept fraudulent transactions in the block a part of that stake would be burned, which is incentive for all validators to behave well. Furthermore when the validators validate a block they get rewards, just like miners get rewards in PoW chains. Anyone with a technical know-how can set up these nodes, but an easier way is to participate in an existing staking pool. How this works is you delegate your coins to an existing staking pool and you get part of their rewards, proportional of your stake of course. You can do that at a wallet or even an exchange. Former is recommended, but if you're keeping your cryptos in an exchange anyways I don't see why you couldn't stake there.
In some cases there might be a lock-up period that you can't access your crypto at all. If you'd stake through Binance for example there's 15, 30, 60 and 90 days lock-up periods. And if you stake ADA for example through a wallet there is no lock-up periods. Obviously locking your crypto can be risky since the prices might crash. And then let's say you got a couple of percent increase in your crypto holdings, but price went down 90 percent, it's not great.
I think, but am not sure, that if you stake ETH now, you can't withdraw it currently. This is because they're still in the process of converting to full PoS functionality. So probably not recommended before further upgrades. Others can probably give a better explanation.