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      KODA Cryptocurrency – A Beginners Guide To Staking In Crypto

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      Nov 24 2022 | By

      Whether you are new to the world of crypto or you have been investing in cryptocurrencies since they began over a decade ago, staking in crypto could still be for you. As with everything within the world of crypto, there is a lot to learn. It’s important to do your own research and make sure you make the right choice for your cryptocurrency investment.

      In this blog post, we look at a step-by-step guide for staking in crypto, before looking at the benefits of staking in crypto. Of course, we also look at the potential risks of staking in crypto. As with all investment opportunities, there will positives and negatives. It’s just as important to look at the risks as it is to look at the benefits.
      First, let’s look at what staking in crypto is.

      What Does ‘Staking In Crypto’ Mean?

      Staking in crypto is a way for crypto traders or crypto investors to earn rewards. This is done by crypto users holding onto certain crypto coins or cryptocurrencies for a set amount of time. The user has to commit to a blockchain network. They do this by locking a portion of their crypto assets. Over time, those staking in crypto will earn more crypto coins or grow their cryptocurrencies in return for staking in an exchange.

      It’s important to note that you cannot stake in all cryptocurrencies. Staking in crypto is only available for cryptocurrencies that use the proof-of-stake model.

      Your Step By Step Guide To Start Staking In Crypto

      To start staking in crypto you will need to buy, and therefore invest in a cryptocurrency.

      • It must be a cryptocurrency that uses the proof-of-stake model. Take your time to find the right cryptocurrency for you, one which validates transactions with the model of proof-of-stake.

      • Once you have purchased your crypto coins, you may need to move them to a blockchain wallet. This is a secure way to store your digital assets or crypto coins.

      • Like many other crypto traders and investors, you may decide to combine your digital assets in something called a ‘staking pool’. This will give you a real advance in earning crypto-staking rewards in the long term.

      • When you are looking for a staking pool, make sure you take your time to consider the size of the pool and its reliability. Make sure you are sure of the fees added on to your crypto trades too. This way you can ensure that you choose the best staking pool for your crypto investment strategy and goals.

      • Once you have chosen the best staking pool for you, simply stake your crypto coins through your crypto wallet.

      What Are The Benefits Of Staking In Crypto

      There are lots of benefits for crypto traders and investors that stake in crypto. We have listed some of the more popular benefits below to help you see how you could benefit from staking in crypto.

      • As a staker in crypto, you can earn interest on your investment. This is especially the case when you stake crypto coins through a crypto exchange. Look for crypto exchanges that offer additional rewards for tokens to boost your potential interest.

      • Many crypto investors and traders find staking in crypto to be less resource focused. This means that less time and resources are required from the crypto traders or investors.

      • Staking in cryptocurrencies allows for more transparency within a blockchain. In turn, this means that stakers have more inclination as to how set crypto coins will perform and act up going forward.

      • Crypto investors and traders often find that staking in crypto requires very little effort. This is especially the case when compared to other crypto investment options. This allows crypto traders and investors the opportunity to continue investing, while still having a solid night’s sleep with no worries or concerns about the world of crypto and what may or may not change.

      What Are The Risks Of Staking In Crypto?

      As with all investments, there will be some risks. You must be aware of these and do your own research. As we have stated in previous blog posts, cryptocurrencies are highly volatile. There is no getting away from that. Anyone that tells you differently should ring alarm bells in your mind. Trading in crypto can result in the loss of your investment.

      The two main risks that come with staking in crypto are as follows:

      • Due to the volatile nature of cryptocurrencies, it means that you may need to rethink your strategy and keep rethinking it. This is because there can often be unpredictable price swings.

      • Another risk of staking in crypto is the lock-up period. You can lock your crypto holdings for further rewards. However, this means that you will not have access to them for that set amount of time. If the system ends up not working as you expected, or hoped, you may find you get a penalty. This is commonly known as ‘slashing’.

      Overview Of Staking In Crypto

      Here at Koda, we are big on education, in fact, it is one of our core values along with ease of use and transparency. If you want to more about staking in crypto, or if it is the best investment option for you, speak to our team. We also have many other blog posts on crypto staking that you might find useful. Have a browse of our blog posts and see what interests you.