What is Staking Pool?
A staking pool enables multiple stakeholders to combine their resources to increase their chances of earning rewards by collectively verifying and validating new blocks on a blockchain. Similar to traditional mining pools in Proof of Work (PoW) systems, staking pools are prevalent in Proof of Stake (PoS) blockchains. Managed by a pool operator, stakeholders join by locking their coins in a designated address. While some pools require users to stake through a third party, others offer alternatives like cold staking pools, allowing participants to contribute while maintaining control of their funds in secure hardware wallets.
Why people should liquid stake their SOL with a stake pool?
People should consider liquid staking their SOL with a stake pool for several reasons:
- Maximize Yield Potential: Liquid staking allows users to earn staking rewards while participating in DeFi activities, maximizing their potential yields.
- Maintain Liquidity: Unlike traditional staking, liquid staking allows users to maintain liquidity, enabling them to use their staked tokens in various ways within the DeFi ecosystem.
- Diversification: Stake pools often spread delegated SOL across multiple validators, reducing the risk associated with any single validator.
- Accessibility: Liquid staking pools like SolBlaze remove technical barriers associated with running a validator node, making staking more accessible to a wider audience.
Resources: Learn more📎
- https://academy.binance.com/en/glossary/staking-pool
- https://stake-docs.solblaze.org/