When it comes to play-and-earn gaming, it all seems fun and games, but it’s a bit more complex than that. On the first level of understanding, P2E games allow users to earn crypto rewards and NFTs through playing skill-based games.

On a deeper level, there are many other things a player can do with their cryptocurrency, and we’re here to explain all the different concepts you need to know. So let’s immerse ourselves in the crypto world and start by learning about staking.

What exactly is staking?

Simply put, staking is a way to put your crypto to work and earn rewards by doing so. It’s how some cryptocurrencies verify their transactions, giving the users the possibility to earn staking rewards. The process involves crypto assets that are used to support blockchain networks and confirm the transactions.

Not all cryptocurrencies allow staking. It only works with those currencies that use the proof-of-stake model to process payments.

Proof-of-Work vs. Proof-of-Stake

Both proof-of-work and proof-of-stake are consensus mechanisms that cryptocurrencies use. The first consensus mechanism to ever be used was Proof-of-Work ( PoW).

PoW involves mining, a process through which users worldwide, called miners, try to solve a cryptographic puzzle. The winner that solves the problem obtains the right to add the newest block of verified transactions onto the blockchain, getting in return some crypto rewards. Proof-of-work requires substantial energy usage, and it can create bottlenecks on complex blockchains, leading to long transaction times and higher fees.

As a result, the Proof-of-Stake ( PoS) emerged to lower fees while also increasing the speed and efficiency of transactions. Transactions get validated via staking by highly invested people in the blockchain. Users can put certain amounts of their tokens on the line, or all of them, to get the chance to be selected as validators. Validators add the new block on the blockchain and get rewarded in exchange.

There is also a third consensus mechanism option, Proof-of-Burn, less used. Users must burn or destroy crypto in order to validate transactions.

How staking works

Usually, users need to have a minimum required balance of a specific cryptocurrency before they can stake their coins and earn rewards. This requirement can vary from network to network, but the basics are the same: the more tokens you stake, your chances of becoming a validator increase. Whenever a new block is added to the blockchain, new tokens are minted, and the block’s validator receives them as staking rewards.

You should also know that your coins are still yours when you stake them. You are just putting them to work for you, but you also have the possibility to unstake them at a later date if you wish to trade them instead. Unstaking is not an immediate process, as most networks require users to let their coins stake for a minimum fixed amount of time.


Benefits of staking

So now you know what it is and how it works. You probably already can imagine what the benefits of staking coins are:

  • It’s the easiest way to earn some interest on your crypto holdings. Actually, it’s your crypto that does all the work for you!
  • You don’t need any expensive equipment as mining requires.
  • You are taking an active role in maintaining both the security and the efficiency of the blockchain.
  • Since it requires way less energy usage than mining, it’s also considered more environmentally friendly.

The Learn-to-Win series will continue with other educational resources on industry topics. We strongly believe that knowing how the entire ecosystem works, what is staking, why platform governance is essential, basic tokenomics rules, and everything in-between will help you become part of a community of like-minded players, but also help you make the most out of Win.com.

Before you play-to-win, you should learn-to-win!

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