Today, crypto investors are more interested in earning risk-free profits rather than earning from speculative digital assets. One such means is holding coins and earning rewards just for having these coins safely locked in your wallet. The rewards are usually a cut from the transaction fees made on the network.
Proof-of-Stake (PoS) consensus occurs when nodes share a single coin or token for a period of time in return for a fee to confirm and validate transactions. Staking is a way that supports the Proof-of-Stake consensus, just as mining supports the Proof-of-Work (PoW) consensus.
Staking involves locking or storing your coins for a limited amount of time. Staking requires a specific number of coins contributing to the worth on the network. In this way, the holder becomes a validator and contributes to the security and coin issuance (if any) of the network. The amount of your coins represents your part in the network security. For this favor, the network rewards the holder after a set amount of time.
What is liquidity staking?
Crypto staking makes you a validator. This term means if you stake a specific number of coins or tokens on a PoS network, you become authorized to validate a transaction. Liquidity staking implies that you lock several native tokens in a wallet for the sake of providing liquidity for that particular coin. The blockchain does not allow you to use these tokens for an extended period, but in return, as discussed earlier, you are rewarded by a cut of transaction fees and bonuses.
What is the benefit of liquidity staking?
As a liquidity provider, you earn just by adding liquidity for a coin. With its community members staking tokens, a blockchain gets more secure. Consequently, slippage is reduced and trade is increased. Money is not continuously flowing out of the network, as it remains constant there. Basic requirements for staking include a wallet and a set number of tokens.
How does liquidity staking work on Jax.Network?
One peculiar aspect of staking on Jax.Network is that you do not contribute to the security of the network. The latter is ensured by the PoW mining algorithm. By staking, you provide liquidity to the shards. As we will see, this is an essential aspect for Jax.Network ensuring its smooth operation. More liquidity means more cross-shard transactions can be processed, and thus improve the network overall capacity.
Staking coins and earning profits have never been this easy. Jax.Network has a liquidity staking scheme for the users, wherein they can earn rewards through their coins – JAXNET (JXN) and JAX. JXN and JAX are the digital coins offered by Jax.Network.
Anyone with JAX coins will be able to stake coins on the network through two different mechanisms detailed below. Furthermore, the rewards are distributed depending on the proportion of the stake, i.e., the more significant the stake, or the more extensive the duration of the stake, the bigger the rewards are.
You do not only need to be a validator to earn rewards in JAX. Liquidity providers are generally referred to as exchange agents. All exchange agents can earn huge profits by being facilitators of cross-shard transactions. Here, the user has two choices, either they can stake their JAX coins in a decentralized fashion and update their own exchange agent registry on the beacon chain. This way, they provide cross-shard liquidity to the platform.. They earn a portion of the transaction fees as a reward for providing the stability and composure to the network.
The users can also stake their coins with any exchange hub. Through this, they will be able to minimize the time for the confirmation of any transaction, and the exchange hub will reward the users for their contribution.
Conclusion
The JAX Network provides a feasible and convenient staking mechanism for its users. They can earn profits and rewards by simply using the liquidity staking scheme, as they can stake any coin that the JAX.Network has to offer. JAX promises profits to all its users, irrespective of their status. However, the amount of rewards do depend on the contribution of the users to the network. On one hand, users are rewarded for their staking, and on the other hand, the platform also becomes more secure, reliable, and achieves stability because of these stakes. Thus, everyone achieves their targeted goals.
