Holding on to cryptocurrencies can be difficult at the best of times, but this trading platform is offering a solution that may make things easier.
The crypto markets are as volatile as ever — and now, a major trading platform is making it easier to have “diamond hands.”
eToro supports staking, which means that those who purchase and hold supported cryptocurrencies on its platform have a way of growing their capital.
According to the platform, the mechanism thats used to achieve this is not dissimilar to the way that interest accrues in a savings account.
With many people beginning to gain exposure to crypto for the first time, eToro says it aims to ensure that the staking process is “simple, secure and hassle-free.”
Any rewards that are generated are paid on a monthly basis in the cryptocurrency that was staked in the first place, and coins remain the property of users at all times.
According to eToro, it can be complicated for crypto investors to start staking on their own. Using this platform makes the process much more straightforward. A small fee is charged to cover operational, technical and legal costs.
How it works
Staking is available to all eligible eToro users. Members of the eToro Club receive a higher proportion of rewards according to their tier, and can also enjoy other perks including in-depth market webcasts, dedicated customer success agents, using your debit card to invest on the eToro platform, lower fees and exclusive events.
The cryptocurrencies that are currently supported by eToro include Cardano and Tron, with more set to be added in the future. The reward percentage of the monthly staking yield varies depending on which tier of membership a user has.
Crucially, absolutely no action is required on the part of those who are eligible, as rewards are distributed directly and automatically. As part of eToros push for transparency, all users receive a tailored monthly email that sets out the rewards they received, and how it was calculated.
Whats at stake
Staking is an emerging crypto trend, and is available for cryptocurrencies that are based on blockchains with a proof-of-stake consensus mechanism. This means that the likes of Bitcoin and Ethereum arent involved in one of these programs — because they use a proof-of-work algorithm.
Through PoS, validators are responsible for verifying transactions — receiving rewards in exchange. One of the biggest benefits lies in how these blockchains can be more environmentally friendly than those based on PoW. Ethereum is planning to make the transition to PoS in the not-too-distant future. More than 5.2 million ETH has already been deposited into the contract.
One of the dangers associated with staking is that, given how participants are now responsible for keeping the network secure, they can face penalties if they are seen to be acting against the best interests of the network.
Using external providers such as eToro helps to remove some of the technical hurdles that may stand in someones way, all while giving them greater levels of flexibility.
