What is staking?

Most crypto investors have heard of staking. It is a way how many crypto projects, including Electra Protocol, verify their transactions, and it allows participants to get XEP rewards (the native currency of the blockchain) on their holdings. Staking XEP is a process that involves committing own XEP crypto assets to support the Electra Protocol blockchain network and confirm transactions.

Staking is available for Electra Protocol, since it relies on the proof-of-stake model to process payments. This is very energy-efficient alternative to the proof-of-work model, which requires mining devices that use a lot of computing power to solve mathematical equations.

Staking XEP coins is a great way to use crypto holdings for generating rewards. On the Electra Protocol blockchain they are 3% XEP APY (why this value has been chosen). Before you get started with XEP staking, it’s important to fully understand how crypto staking works.

Stake XEP - Staking Electra - Electra Protocol - Earn rewards

How staking works

Staking works only with cryto currencies that use the proof-of-stake model, like Electra Protocol. Staking defines how new transactions are added to the blockchain. Participants pledge their XEP coins to the Electra Protocol blockchain. From those pledging participants, the protocol chooses validators to confirm blocks of transactions. The more coins a users pledges, the more likely he is to be chosen for validation. 

Every time a new block is added to the blockchain, new XEP coins are minted and distributed as staking rewards to the validator of that block. Staking is only possible using a XEP Desktop Wallet (by keeping the wallet unlocked) and it is not possible using XEP Mobile Wallet (as the smartphone version does not carry a full copy of the blockchain). The earned rewards are paid out using XEP and are 3% APY.

The XEP coins used for staking are always in the owner’s possession. They are esentially put to work and everyone staking is free to unstake them at any time. In contrast to many other crypto projects, there is no minimum amount of time you must stake and also not unstaking period (you can immediately use the XEP coins if you do not want to stake them anymore). The minimum recommended XEP amount for staking is 1 million XEP.

Validator nodes upcoming

The launch of validator nodes in 2022 will likely impact the rewards mechanism of XEP Desktop Wallets, as more blocks will be generated by validator nodes in comparison to old-fashioned validators and under different terms.