There are several ways in which one can participate in staking within the crypto ecosystem:
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Run your own validator node
Proof-of-stake allows for anyone with a computer to run a node and validate transactions by participating in the consensus of the selected blockchain. Validators are assigned at random to verify a block.As long as the validator node is live, the tokens being staked are both locked up and earning a yield. Running your own node can be complicated and technical for beginners and if done incorrectly, can incur financial losses of the tokens at stake.
Delegate to a validator
Tokens of PoS networks can be assigned to a third party so they can run their own node and validate transactions. This is a less complicated method than running your own node but involves delegators joining a staking pool and trusting the selected validator with their tokens. Similarly to running a mining pool, a staking pool requires a robust team of engineers. The main difference comes down to the target audience. While mining pools are focused on miners, staking pools cater to anyone who holds PoS tokens. Dasom Song, head of marketing for Stake.
Liquid staking
In recent years, several projects have sprouted that offer token holders an alternative to staking pools and solve the illiquidity of staking while still contributing to validating the network. Other projects like Rocketpool (RPL) have decided to focus on just supporting liquid staking for ETH at the moment. Rocketpool is a permissionless protocol so anyone can become a node operator.
The first and main use in DeFi at the moment is providing exit liquidity to those liquid staking protocols via liquidity pools. Curve Finance liquidity pool of ETH + STETH tokens allows for STETH to be swapped for ETH until the merge is complete. RETH also has a liquidity pool in Curve Finance.
Locking tokens in a DeFi protocol
Protocols in DeFi can incentivize participants to lock their tokens in exchange for rewards in the form of yield. This can be done for lending and borrowing protocols like Aave (AAVE), to provide liquidity on a decentralized exchange (DEX) like Uniswap (UNI) or SushiSwap (SUSHI), and to support governance-related operations of decentralized autonomous organizations (DAOs).
Staking through a CEX
Centralized exchanges provide several of the staking options mentioned above in a traditional custodial and permissioned manner. The exchange will stake the tokens on the users' behalf and ask for a commission in exchange for the staking services.Binance, the biggest crypto exchange, allows users to stake their tokens for a locked period or in a liquid way, depending on their preference and yield appetite. For those users who stake ETH, the platform provides exit liquidity in the form of a Binance ETH (BETH) token until after the merge takes place. Binance recently launched a new TerraUSD (UST) staking program for more than 30 million users. Kraken, another leading exchange, provides staking services but doesn’t offer an exit liquidity option.
Locked tokens that earn a yield
Staking comes from PoS but has taken a meaning of its own in DeFi and crypto as a whole. As of the time of writing, any token that is locked either to support a network via a validator or used in a decentralized application is considered to be staked.