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Delegated staking FAQ
Staking is a mechanism through which Proof-of-Stake networks ensure that the validator nodes that create new blocks on a blockchain are acting in good faith. Proof-of-Stake consensus relies on network participants putting assets “at stake” to guarantee that they are not spamming the network or engaging in other kinds of activities that would imperil it.
To start staking your crypto assets, you first need to choose a trusted validator to which you will delegate your assets.
The assets staked to a validator increase its chance of being selected to create new blocks on a network. When creating new blocks, the validator gets rewarded by the protocol with a number of tokens proportional to its stake. The validator then passes this reward to its stakers, minus a small fee that is used to run the node.
Staking rewards are tokens that are distributed to validators to compensate them for their work operating and securing the network.
Staking rewards come from two main sources: transaction fees and newly-minted tokens. The creation of new tokens is typically determined by the protocol rate of inflation. It’s worth noting that each protocol has its own rules that define the inflation rate, the network fees, and the rewards paid to block validators.
Liquid staking is a type of staking whereby asset holders receive an equivalent asset in exchange for the tokens they stake. This is a derivative of their staked asset (such as receiving stETH in exchange for ETH), which is a representation of the original asset and can be used to engage in decentralized finance (DeFi) or for other activities.
Finoa’s validators are run by Finoa Consensus Services, Finoa’s first subsidiary.
Founded in 2022, FCS develops blockchain infrastructure and distributed validator technology that secures decentralized networks and maximizes institutional investors’ capital efficiency.
By staking to an FCS node, you agree to the Finoa Consensus Services Terms and Conditions.