Owners of cryptocurrency can deposit their funds in staking and receive a fee in proportion to the amount deposited. The choice of the method and service for staking is up to the user.
Depositing Tokens To An Intermediary
With custodial staking, funds are transferred to the account of the intermediary app, which then independently allocates them to one or more validators.
Advantages Of Custodial Staking
- Easier procedure for participating in staking.
- One-click staking. Some apps have a “Send Funds to Staking” button that instantly transfers tokens when you click it.
- Quick income and withdrawal of funds from staking. Many custodial applications immediately start charging interest on the invested amount, without waiting for a reward from the blockchain. You can also quickly access funds and withdraw them from staking.
Disadvantages Of Custodial Staking
- Fraud risk associated with transferring funds to an intermediary.
- The possibility of losing funds due to service being hacked.
- Inability to independently choose validators.