How does staking work?

Staking was introduced to the crypto world from the Proof Of Stake consensus mechanism, in which blocks with transactions are validated through the holding of funds, and these validators rewarded through the native blockchain coin.

There are a few PoS blockchains, such as the Binance Smart Chain, Solana and Ethereum after the Merge. Simplifying, […]

Staking consists of holding your assets in a locker and receiving rewards for doing so, while executing the validation process of the blockchain.

Using the PoS Consensus Mechanism as inspiration, Smart Contract developers created a Smart Contract powered Staking. In this case, a Smart Contract deployed on EVM-compatible (Ethereum Virtual Machine — compatible) blockchains (the ones that allow Smart Contract deployments) creates a ‘’locker’’ for tokens to be stored, therefore holding a ‘’stake’’ of the pool. Then, the smart contract distributes its fixed rewards per block among the pool stakeholders.

When the tokens to be staked are LP (Liquidity Pair) tokens, it is called a Liquidity Staking and referred to as Farming.

This mechanism is used by tokens and DeFi protocols as a way of keeping and rewarding investors.

Its development usually requires a Full-Stack development team in order to properly deploy the Smart Contracts and its UI/UX. PancakeSwap offers creation of pools to tokens, but rewarding with its token called CAKE.

The coming Medusa Easy Staking Protocol, developed by Medusa Protocol, aims to deliver pool creation in a simple and fast manner for token owners.

Its dynamic APY system supports both ERC-20 and LP tokens, therefore offering liquidity pools’ solutions from the beginning. The solution offered aims to help token owners to retain their customers with passive income, decrease its circulating supply and even acquire new customers with good APYs and APRs. All of this while adding a new utility to the token.

MESP launching soon. Find out more at Medusa Protocol’s Website.