Staking

Staking is the process of locking up tokens to participate in Proof of Stake networks or project quests in return for rewards. First, let’s start with what a proof of stake network is.

As we discussed earlier, blockchains are distributed networks which process and validate transactions. These networks often span hundreds of thousands of computers, which must reach agreement on the validity and order of transactions. The agreement mechanism they use is known as "consensus."

One of the most commonly used Consensus mechanisms is Proof of Stake. In this mechanism, validators, i.e computers who verify transactions for the blockchain, must lock up a certain % of the native crypto to participate in the consensus process.

Proof of work vs Proof of stake

Another use case of staking centers around participation in projects. Sometimes, projects award investors a certain percentage of their supply allocated to stakers. This does not concern the consensus mechanism because some projects want to reward their loyal supporters.

For example, you can stake your $PUFF for surprises and community multipliers based on chapters in the Dark forest.