What is a stake pool?

Staking pools explained:

Staking allows holders of tokens to combine their assets in what’s called a pool in return for interest payments. Staking pools provide stability and liquidity to their cryptocurrency’s blockchain to help validate transactions.

Typically staking pools are run by native pool operators that require tokens to be sent to a wallet on the crypto’s blockchain. However other projects have their staking pools run by third-party transaction validators, in which case it is up to the token holder to decide which pool to stake with.

When calculating a pool’s profitability, gas or transaction fees should be considered. Staking pools vary in their reward structure, rules and withdrawal policies. Some pools require tokens to be locked up for a predetermined time period, whereas others allow users to withdraw their pooled tokens anytime.

Keep reading about staking and investments…

• What is staking?
• Understanding your investment time horizons
• A beginner’s guide to crypto trading strategies