What is Staking in Crypto?
Decentralized finance (DeFi) has been rapidly gaining popularity in recent years as a way to participate in financial services in a decentralized and permissionless manner. One of the most popular DeFi applications is staking, which allows users to earn passive income on their idle crypto assets.
Staking is the process of locking up your crypto for a specific period to help support the operation of a blockchain. In return, you earn interest by staking your tokens. Okto is a DeFi app that allows users to stake their crypto assets and earn passive income through staking rewards. Okto offers users a unique way to earn high returns on their investments with relatively low risk, making it easier for those looking to enter the world of DeFi staking.
How Does Staking Work?
Staking requires you to lock your tokens for a specific period. In return, you earn interest on your tokens. For example, with Okto Staking, if you hold BNB in your wallet, instead of letting it stay idle, you could stake your BNB holdings and earn additional income depending on the interest offered at the time of investment.
Staking platforms offer varied staking rewards, with some assets earning up to 20% annual percentage yield (APY). This high earning potential is a major reason for users looking to make the most of their crypto investments. Tokens available for staking on Okto include FTM, MATIC, UDST, DOGE, BUSD, etc while Okto is working towards adding many other tokens.
Benefits & Advantages of Crypto Staking on Okto
Crypto staking has become increasingly popular in recent years due to the numerous benefits and advantages it offers to investors. Staking on Okto opens up a world of low-risk, high-income potential, enabling you to make the most of your digital assets. Here are some of the key benefits and advantages of crypto staking:
Passive Income
One of the most significant benefits of crypto staking on Okto is the potential to earn passive income. By staking your crypto, you can earn rewards in the form of additional tokens. The amount of rewards you earn depends on the amount of crypto you stake and the staking network's reward structure.
Also Read: Earn Passive Income On Okto
Simplified Interface
Okto offers users a user-friendly and intuitive platform. The platform is easy to navigate, with a simple interface that makes staking accessible to users of all levels of experience. Okto also offers a range of helpful resources and guides to help users get started with staking.
Low Risk
Staking can be a lower-risk alternative to other forms of crypto investment. Unlike trading, which involves buying and selling crypto based on market fluctuations, staking involves holding and locking your crypto for a specific period. This reduces the risk of market volatility and potential losses.
High Returns
Staking can also offer high returns, especially for early adopters. As staking networks become more popular and attract more participants, the staking rewards may decrease. Staking early on a network with high potential can provide significant returns over time.
Zero Lock-in Period
Flexibility is key when it comes to managing your digital assets. With Okto’s simple earning offering via staking, there are no lock-in periods. You have the freedom to stake and unstake your assets at any time without any restrictions.
Diversification
Staking can be an effective way to diversify your crypto portfolio, as it offers an alternative way to earn rewards from crypto holdings. By diversifying your portfolio, you can reduce risk and maximize potential returns.
Security
Okto also provides users with a high level of transparency. The platform is decentralized, meaning that it is not controlled by any single entity or organization. This means that users can trust that their investments are secure and that the platform is operating in a fair and transparent manner.
How to Stake Crypto on Okto in 5 Easy Steps
The process of staking on Okto is straightforward. Below is a step-by-step guide:
- Go to Earn and select a token (for example BNB)
- Click on the token, and review the details such as APY, payout duration, gas fees, etc.
- Click on Invest now, and enter the amount of BNB you wish to invest. If you have an insufficient token balance, you are required to buy or deposit BNB. You can now buy most of the tokens on Okto using a bank transfer.
- Once you have added BNB, review your order and Confirm.
- In return, you will receive a “Receipt Token” which is BNBX in the case of BNB. A receipt token is an acknowledgement token or proof of your investment.
How to Exit Staking and Claim Your Principal and Rewards
- Go to “Portfolio” and click on “Your investment”
- Select the token you wish to exit and click on Exit (For example, BNBX)
- If the token is tradable (which means you can sell your receipt token), you can either:
a. Request Exit OR
b. Sell BNBX
- If you “Request Exit”, enter the amount, review the details, and confirm your order.
- If you select “Sell BNBX”, you can choose the token you wish to receive in return and confirm your order.
- If the token is non-tradable, you can simply place a “Request Exit” order, review the details and confirm your order.
- Please note: if the payout duration exists, you will only be able to claim your rewards and principal amount after the payout period, or else you will receive your rewards and principal amount instantly after the exit order.
Tokens available for staking on Okto include FTM, MATIC, UDST, DOGE, BUSD, etc., and as our platform continues to grow, we will introduce more tokens that provide additional ways for you to maximize your earnings. This empowers you to adapt your investment strategy to changing market conditions or capitalize on other opportunities as they arise.
Risks Associated With Staking in Crypto
While staking in crypto can offer myriad opportunities for earning passive income, it is essential to understand and consider the risks involved. Here are some of the key risks associated with staking in crypto:
Market Volatility
Crypto markets are highly volatile, with prices experiencing significant fluctuations. The value of the crypto you stake can rise or fall dramatically, affecting your overall investment. Market volatility can lead to potential losses or reduced returns.
Impermanent Loss
Impermanent loss occurs when the value of the crypto you stake diverges significantly from the value of the staking token. This can happen when the price of the staked crypto increases or decreases compared to the staking token. It results in reduced returns compared to simply holding the staked crypto. Watch this video below to understand what permanent loss is.
Technical Risks
DeFi platforms, including staking platforms, operate on complex technical infrastructure. There is a risk of smart contract bugs or vulnerabilities that could lead to potential security breaches and loss of funds. It is crucial to carefully evaluate the reputation, security measures, and audits of the staking platform before committing your assets.
Regulatory and Legal Risks
The regulatory landscape for crypto and DeFi is still evolving. There is a risk of regulatory changes or crackdowns that could impact the legality or availability of staking services. It is essential to stay informed about the legal and regulatory aspects of staking in your jurisdiction.
Also Read: What Is Tokenomics
Conclusion
In conclusion, crypto staking on Okto offers numerous benefits and advantages to investors, including passive income, low risk, high returns, network participation, diversification, and decentralization. However, it is essential to understand and evaluate the risks associated with staking before making any investment decisions.
