You might have heard staking of CAKES, ADA and other cryptocurrencies. So what is staking of cryptocurrency? Staking is basically putting your coins in shared pool. That pool competes for processing of payments on the blockchain and the pool with most funds will win the next processing. Upon processing of block the pool earns fee on it and distributes the funds among the participants.
In technical terms the staking is the method to get rewarded for participating in funds pool in order to win and process proof-of-stake (PoS) cryptocurrency blockchain. POS is similar to mining in POW proof-of-work like in Bitcoin, however it does not require powerful hardware to solve complex mathematical equations to become eligible for producing next block.
A proof of stake system is based on algorithm which selects stake pool server for processing/adding next block on the blockchain. The selection is based on a number of criteria but the primary one is the total amount of coin that has been delegated to that pool. When someone delegates to a stake pool, that person is increasing that pool’s chances of producing blocks. When a pool produces a block the system pays out a reward (from its reserves) which is the incentive mechanism to encourage people to run reliable nodes to produce and verify transactions on the blockchain. The rewards are eventually distributed among the stake pool operator and the delegators based on the amount that they delegated (minus the fees to run the stake pool).
Where can we Stake Coins
Staking on Pancakeswap