What is staking?

Staking is an essential feature of proof of stake (PoS) protocols to validate new data blocks in a blockchain. Staking generates rewards by allowing participants to lock up their crypto holdings in a network’s staking mechanism, which helps secure the network and validate transactions. It's a sustainable way to earn passive income while supporting the growth and decentralization of the blockchain ecosystem.

Energy efficient and scalable

Proof of Stake (PoS) is an energy-efficient and scalable way to validate new data blocks in a blockchain. PoS enables holders of crypto assets to participate directly in the consensus mechanism, thereby ensuring a decentralised and secure network.

Energy Efficiency:

PoS is often lauded for its energy efficiency compared to Proof of Work (PoW), the traditional consensus mechanism used in crypto assets like Bitcoin. In PoW, miners compete to solve complex mathematical puzzles to validate transactions, requiring massive computational power and energy consumption. Conversely, PoS requires significantly less energy because it doesn't involve solving computationally intensive puzzles. Validators are chosen to create new blocks based on their stake in the network, eliminating the need for vast amounts of computing power.

Scalability:

PoS offers improved scalability compared to PoW. In PoW, as the network grows, so does the complexity of the cryptographic puzzles miners must solve, leading to potential bottlenecks and slower transaction processing times. PoS, on the other hand, doesn't face the same scalability challenges because block creation and transaction validation are not dependent on computational power. Validators are chosen based on their stake, allowing for a more scalable and efficient consensus process. Additionally, PoS networks can implement mechanisms such as sharding, where the network is divided into smaller partitions (shards), each capable of processing transactions independently. This further enhances scalability by allowing parallel processing of transactions across multiple shards.

Security:

Despite its energy efficiency and scalability benefits, PoS maintains a high level of security. Validators are economically incentivized to act honestly and validate transactions accurately to maintain the value of their staked assets. Moreover, PoS introduces penalties (slashing) for validators who attempt to validate fraudulent transactions or disrupt network operations, further enhancing security.

Environmental Impact:

PoS is often seen as an environmentally friendly way to maintain blockchain security compared to PoW due to its significantly lower energy consumption. With increased attention to the environmental impact of blockchain technologies, PoS offers a more environmentally friendly and scalable alternative that aligns with sustainability goals.

Consenus mechanisms and rewards

Consensus mechanisms:

A blockchain is essentially a distributed digital ledger used to record transactions. These transactions need to be verified and agreed upon (reach a consensus) by numerous different peer-to-peer computers (called validators in PoS) in a blockchain network before they can be added to the chain. This principle is called the consensus mechanism (also known as the consensus protocol). There are many different types of consensus mechanisms, but one of the main ones is Proof of Stake (PoS).

Proof of Stake:

In PoS blockchains, transactions are verified (validation) by validators, who have to stake an amount of a blockchain’s native token in order to participate in the verification process. In return for doing this, validators typically get rewarded in the blockchain’s native token. If the validators engage in malicious behavior, or fail to validate (e.g., by going offline), a portion of their stakes could be taken away (slashing penalty).

Rewards:

Kvarn X customers can participate in the PoS network consensus mechanism via the staking service easily and securely. Users of the staking service can lock their crypto assets for staking and participate in the validation of new blocks and transactions in the network. By participating in securing and maintaining the network, the validators, and thus the user of the Kvarn X staking service, have the opportunity to earn passive yield on their crypto assets.

Risks to be considered

While staking offers attractive rewards, it's essential to be aware of potential risks, including but not limited to:

Market volatility:

Crypto markets are highly volatile, and the value of staked assets may fluctuate during the staking period. It is possible to incur losses if the value of the staked token goes down and the losses, thus, are higher than the rewards received from staking.

Technical risks:

Network issues or vulnerabilities could impact the staking process or result in loss of funds.

Slashing:

Certain staking protocols impose penalties for misbehavior or downtime, leading to a reduction in rewards or loss of staked assets.

Hacks:

It is also possible that staking pools could be hacked or have a vulnerability that is exploited, potentially resulting in a complete or partial loss of the locked-up funds.

Lock-up period:

Staked tokens have minimum lock-up periods where users cannot withdraw their tokens. Furthermore, when withdrawing tokens from a staking account, there could be a specific unbonding period (waiting time) for each blockchain before the tokens are received. This should be taken into consideration if a user wants to use their crypto for other purposes (such as trading) during the staking period.

The risks mentioned above concerning staking do not cover all possible risks associated with staking or crypto assets in general. It is therefore important that you do your own research and due diligence to make the best possible judgment when buying, selling, staking or investing in crypto assets. Please also note that staking rewards are impacted by factors outside of the control of Kvarn Capital, e.g. changes of the protocols, technical disruptions. Kvarn Capital cannot therefore guarantee any specific staking reward or return over time.

Frequently asked questions (FAQ)

How does staking work?

Staking is a process where users actively participate in validating transactions and maintaining the security and integrity of a blockchain network. By staking your crypto assets, you contribute to the network's consensus mechanism and are rewarded with additional tokens. It's a sustainable way to earn passive income while supporting the growth and decentralization of the blockchain ecosystem.

Who is eligible to stake on Kvarn X?

If you are 18 years of age or older, have a Kvarn X account and have accepted our staking terms, you are welcome to use Kvarn X staking.

Where can I see my rewards?

Staking rewards are shown in Kvarn X service under the tab “Transactions”.

Is there a lock-in period?

Yes, there is a lock-in period (staking period) when staking on Kvarn X. During this period the user cannot withdraw or otherwise freely use (e.g. sell or transfer) their staked crypto assets.

How do I redeem my staked assets?

You can request to unstake anytime, but you will not be able to sell or send your staked assets until the unstaking process is complete. This could take from a week to month, depending on the staked asset and when you have started staking. We process unstaking instructions once a month, on the first Tuesday of each month.

How do I start staking on Kvarn X?

To stake your assets:
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1. Buy and/or hold the asset you wish to stake
2. Go to the “Holdings” tab
3. Select your preferred asset
4. Choose the amount
5. Click on “Stake” to give a staking instruction

You can stake your crypto at any time but we process staking instructions once a week, on Tuesdays. Successful staking entitles you to a weekly staking reward in accordance with the general terms and conditions of the staking service. Your rewards are automatically distributed to your account.

To unstake your assets:

1. Go to the “Holdings” tab
2. Select the asset you wish to unstake
3. Click the asset name
4. In the detailed holdings page click unstake button

You can unstake your locked crypto at any time but we process unstaking instructions once a month, on the first Tuesday of each month.

How often will I receive staking rewards?

Successful staking entitles you to a weekly staking reward in accordance with the staking terms. Your rewards are automatically distributed to your account.

Where do the staking rewards come from?

Node operators lock tokens into the network as a guarantee that block validation operations are performed correctly. These node operators are rewarded with freshly minted tokens and transaction fees for adding valid blocks to the network. These newly minted tokens and transaction fees are the rewards for staking and will be passed onwards to those who have staked their tokens.

How do I transfer my crypto to Kvarn X?

Transferring crypto funds is quick and easy, but requires some precision.
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Sending crypto assets to the wrong wallet address or with incomplete information may result in the permanent loss of the funds.
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● Always check that the addresses you use for the transfer are valid and correct
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● Make sure that the wallets you use for the transfer are on the same blockchain (sending and receiving wallets)
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● Attach all the necessary identification information to the transfer
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Please carefully read the instructions for transferring crypto assets.

Is there a fee associated with Kvarn X staking?

Kvarn charges a commission of 30% (staking fee) of the rewards determined by the protocol for the use of the staking service. The commission will be automatically deducted before the rewards are distributed to the customer. The commission includes any possible subcontractor or third party fees.

Stake crypto, earn rewards

What is staking?

staking provided by kvarn x

Put your crypto to work - easy, simple and secure

Get staking assets
‍

Select an asset
to stake

Earn rewards
‍

Assets available for staking on Kvarn X

ASSET

est. reward rate* (APY)

Reward frequency

redemption date**

Staking made easy

Stake with confidence on Kvarn X

staking made secure

The safe and regulatory compliant way to generate yield from your digital assets

Start staking today and earn rewards

Frequently asked questions (FAQ)

Stake crypto, earn rewards

What is staking?

Energy efficient and scalable

Consenus mechanisms and rewards

Risks to be considered

staking provided by kvarn x

Put your crypto to work - easy, simple and secure

Get staking assets‍

Select an assetto stake

Earn rewards‍

Assets available for staking on Kvarn X

ASSET

est. reward rate* (APY)

Reward frequency

redemption date**

Staking made easy

Stake with confidence on Kvarn X

staking made secure

The safe and regulatory compliant way to generate yield from your digital assets

Start staking today and earn rewards

Frequently asked questions (FAQ)

How does staking work?

Who is eligible to stake on Kvarn X?

Where can I see my rewards?

Is there a lock-in period?

How do I redeem my staked assets?

How do I start staking on Kvarn X?

How often will I receive staking rewards?

Where do the staking rewards come from?

How do I transfer my crypto to Kvarn X?

Is there a fee associated with Kvarn X staking?

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Get staking assets
‍

Select an asset
to stake

Earn rewards
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