Difference between revisions of "Staking"
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The term staking used to refer to the act of staking [[tokens]] within a [[Proof-of-Stake (PoS)|Proof-of-Stake]] [[blockchain]], helping secure and validate that chain. Having your tokens 'at stake' with the risk of getting [[Slashing|slashed]] if you violate the [[Consensus Algorithm|consensus]] rules. | The term staking used to refer to the act of staking [[tokens]] within a [[Proof-of-Stake (PoS)|Proof-of-Stake]] [[blockchain]] (check out the page for way more information), helping secure and validate that chain. Having your tokens 'at stake' with the risk of getting [[Slashing|slashed]] if you violate the [[Consensus Algorithm|consensus]] rules. | ||
Along the way staking got also used for locking up tokens for security and insurance purposes within [[Decentralized Finance (DeFi)|DeFi]] [[Decentralized Applications (DApps)|Dapps]], like [[Aave (AAVE)|Aave]] and its safety module. | Along the way staking got also used for locking up tokens for security and insurance purposes within [[Decentralized Finance (DeFi)|DeFi]] [[Decentralized Applications (DApps)|Dapps]], like [[Aave (AAVE)|Aave]] and its safety module. | ||
Latest revision as of 10:39, 2 June 2022
The term staking used to refer to the act of staking tokens within a Proof-of-Stake blockchain (check out the page for way more information), helping secure and validate that chain. Having your tokens 'at stake' with the risk of getting slashed if you violate the consensus rules.
Along the way staking got also used for locking up tokens for security and insurance purposes within DeFi Dapps, like Aave and its safety module.
Later on it got more watered down, meaning basically just the act of locking tokens in a smart contract.
- From The Death of Staking, by Cobie (21-4-2022):
"Somehow, over time, the word ‘staking’ has been repurposed and redefined. Instead of receiving rewards for contributing to chain security with collateral at stake, modern “staking” just seems to mean idk we give you more coins as a reward if you don’t sell your current coins lol.
These modern staking mechanisms do not have any function in the ecosystem to which they belong. They don’t do anything in any practical or technical sense. They don’t make an ecosystem more robust. They are a shell game, using the name of a different thing to obfuscate their actual purpose, which is to encourage less selling."
