The Fetch.ai network, driven by the FET token, operates as a decentralized company in machine learning and artificial intelligence across sectors. If you hold FET, you can help this network grow and be rewarded for it by staking. In this article, we consider different ways of how to stake FET and their corresponding benefits.
In the world of cryptocurrencies, staking refers to locking in your digital assets for a period to support the operations of a blockchain network. In the case where you stake your tokens, you get rewards in return for that action. The rewards that you get are basically transaction fees or block rewards, or a combination of these, depending on what the particular network's design is.
Passive Income Generation: Staking your FET can help you make rewards without active trading or indulging in any highli-complicated activity. This helps to create a stream of passive income that could, in turn, boost your overall returns.
Network Security: Stake for the security of the Fetch.ai network. Staked tokens mainly let you participate in the validation of nodes, making it a bit harder for a malicious person to interfere with the network. Therefore, incentives for the stakers in the provided network security will be emanated.
Governance Rights: Some staking models will also give you voting rights in the Fetch.ai network. With this, you are responsible for deciding important matters concerning the further development of the network.
More Liquidity: Staking could bring further improvements to total FET liquidity. This would improve volatile price movements and benefit the ecosystem as a whole with easier trading.
There exist two major ways through which staking of FET is done:
Fetching directly on the Fetch.ai Network: This would entail direct participation in the consensus mechanism of the network. It requires more knowledge about blockchain technology and has a higher degree of technical complexity.
Staking through Delegated Proof of Stake (DPoS) Platforms: This is more convenient and accessible for most users. DPoS platforms let you delegate your FET to validators who secure the network on your behalf.
Staking on the Fetch.ai Network- Staking directly on the Fetch.ai network offers the highest potential rewards; however, it's also the most complex way. Here is what you would need to consider for how to stake FET directly:
Technical Knowledge: Staking would require some technical knowledge about blockchain technology. That is, how nodes work, key management, and securing the network.
Minimum Stake Requirement: A minimum amount of stake to be required for participation is characterized in the Fetch.ai network as a validator. This minimum amount will be large enough to probably exclude those people with smaller holdings of FET.
Hardware and Software Prerequisites for Running the Node: The staking node is going to require dedicated hardware with a great deal of processing power output and storage. You also need to install and set up software that will be required for node operation.
Uptime requirements: Validators should be very near to constant uptime on the network. This can be mandated in terms of constant monitoring and maintenance of your staking node.
Higher Rewards: Compared to delegators, validators in DPoSs generally experience a higher return on staking.
Direct Participation: You contribute towards security and governance empoweredly over the Fetch.ai network.
Greater Control: You can have control over the staked tokens and the validation process.
You can conduct staking with FET through DPoS platforms. This is how they work when it comes to how you can stake FET with their help:
Delegate Your Tokens: You have to find a reliable DPoS platform and delegate your tokens in FET to some validator on the network.
Validators Secure the Network: Validators on the platform run staking nodes that make the Fetch.ai network secure by validating transactions and maintaining network integrity.
Earn Rewards: You earn through staking rewards based on the performance of the validator and the fee structure of the platform.
Lowest Technical Requirements: DPoS platforms require the least bit of technical know-how. In fact, you simply need to select a platform, deposit your FET to begin with, and offer token delegation to a validator.
No Minimum Stake Requirements: Most DPoS platforms allow you to stake to as low of an amount as any amount under FET, thereby making it accessible to many people holding small amounts.
Convenience : DPoS platforms take care of the technical side of staking, meaning that you will not need to set up a node for yourself.
Choice of Multiple Platforms: You have numerous picking ways of platforms supporting the FET staking and the ability to compare fees and features before deciding on one.
Security and reputation: Go for a platform verified by its record of proof of security. Look out for those that have passed independent safety audits and are reputable in the cryptocurrency community.
Fees and Commission Rates: Most DPoS platforms charge their services. Now, these fees would vary with the nature of things on another platform, so you will need to know precisely how much it will cost you to delegate your FET. While many charge a flat fee, others might take a percentage off from your staking rewards.
Validator Performance: Research the performance of the validators on any platform you're looking at. You want to delegate to a program's validator consistently being online and maintaining a high delegation ratio, essentially, their amount of FET staked with them. You are often going to find this directly on the DPoS platform itself.
Supported features: Some of the DPoS platforms are supplemented with features such as auto-compound, which means you'll be auto reinvesting from your staking reward, or insurance against validator slashing. You may want to factor these in your decision at your own discretion.