What is Staking?

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Full details and developer documents about DESO's Revolution Proof of Stake can be found here.  

Here is all the information published by the DESO Foundation about staking DESO and the requirements to run and manage a Validator.  

Staking is a process used in blockchain and cryptocurrency networks to secure the network and validate transactions. It involves participants, known as validators or stakers, locking up a certain amount of cryptocurrency in the network as collateral. 

How it works: Staking helps secure the blockchain network by ensuring validators have a financial incentive to act honestly.

Validators lock a specified amount of cryptocurrency in a wallet. These validators are then selected to validate and confirm transactions, create new blocks, and add them to the blockchain. In return for their participation, validators earn rewards, typically in the form of additional cryptocurrency.
 

Rewards: Validators receive staking rewards as an incentive for their participation. These rewards can come from transaction fees and new coins issued by the network. If validators act maliciously or fail to validate correctly, they can be penalized. This can result in losing a portion of their staked funds, a process known as slashing.

Benefits: Participants can earn a passive income through staking rewards. Stakers contribute to the decentralization and security of the network.

Risks: The risk of losing a portion of the staked funds if the validator acts improperly. Staked funds are often locked for a certain period, limiting liquidity.  The value of the staked cryptocurrency can fluctuate, affecting the overall return on investment.

A validator is a participant in a blockchain network that is responsible for validating transactions and adding new blocks to the blockchain. Validators play a crucial role in maintaining the security and integrity of the network. 

Here’s a detailed breakdown of what a validator does and their importance:

1. Validate Transactions: Validators verify the  authenticity and correctness of transactions submitted to the network.      This includes checking for double-spending and ensuring that transactions  adhere to the network's rules.

2. Create Blocks: Validators propose new blocks to be added to the blockchain. They gather validated transactions into a  block and broadcast it to the network for consensus.

3. Consensus Participation: Validators participate in the      consensus mechanism of the blockchain. Depending on the consensus protocol (e.g., Proof of Stake, Delegated Proof of Stake), validators may vote on the validity of proposed blocks and work to achieve network consensus.

4. Secure the Network: By staking their own cryptocurrency as collateral, validators have a financial incentive to act honestly. This staked collateral can be slashed (partially or fully taken away) if validators are found to be acting maliciously or incorrectly. 

Choosing a validator to stake with is an important decision that can impact your rewards and the security of your funds. Five key factors to consider when selecting a validator:

1. Reputation: Look for feedback from other stakers or community members. Reputable validators often have positive reviews and active engagement with the community. Check the validator’s history of uptime and performance. Consistent performance and reliability are crucial.

2. Fee Structure Transparency: Validators typically charge a commission fee on the rewards you earn. Compare the fees of different validators and consider how they might impact your overall returns. Ensure the validator is transparent about their fee structure and any potential changes.

3. Performance and Security: High uptime ensures that the validator is consistently active and participating in the network, maximizing your staking rewards. Validators should have robust security measures in place to protect against hacks and downtime. Understand the validator’s history with slashing events. Frequent slashing indicates potential risks in their operation.

4. Rewards and Incentives: Understand how and when rewards are distributed. Some validators might have different schedules for reward payouts. Some validators offer additional incentives or services to their delegators, such as educational resources or staking tools.

5. Validator’s Commitment to Network: Validators often play a role in network governance. Choose a validator that actively participates in governance decisions and aligns with your values. Validators that provide good support and communication can be beneficial, especially if you have questions or need assistance. Engage with the community through forums, social media, and discussion groups to get insights and recommendations on trustworthy validators. Visit the validator’s website or social media channels to learn more about their operations, team, and engagement with the community.

I have contracted with a trusted and reliable partner to managing the technical aspects of maintaining and securing the validator.

This validator was set up first to stake the $DESO held by my digital asset investment holding company, 2c9v Digital, LLC, and its parent entity, 2c9 Ventures, LLC.  You can learn more about 2c9 Ventures here.

I trust this partner with managing 2c9v Digital's staked DESO, and you can too.

@Validator_BenErsing is owned and operated by 2c9v Digital, LLC (a Wyoming  trust).