Staking is the process of keeping or holding coins on tokens to empower the Blockchain or application for it smooth running. It can be a unique way of investment your coins, for instance crypto currency or tokens such as Hive or Leo.
In many network application, staking sustainable the network for increasing the reward pool of the entire community. We must see the daily proof of work (PoW) which strengthens many communities. Actually the staking of many members of the network strengthens the community and keeps it growing with its daily work. So, if more rewards are unstake, it pulls the support of the members from the community. The community therefore weakens .
I understand the reason some Cryptocurrency Investors like Bitcoin and Ethereum Investors would still stake their funds no matter how the market would fall to the minimum. During the recession, while the Novice in the market would be shivering to take out the money; the most Experienced and Gurus in the market would hold their Crypto till the market return. What this mean is that the Crypto Currency Investors they lock it up or hold it for funds to be in circulation. There should be more supply in the market so that all isn't pull which could deplete of collapse the value of that Crypto network. If more Crypto like Bitcoin is pumped in the market as market people join from various Globe with their fiat or native coins, there would be more for exchanges. When more Crypto are stake it enables Blockchain Validation to execute Proof of Work. More blocks are able to be added to support expand Blockchain network.
In Hive Blockchain and other tokenism platforms Staking is the means Proof of Stake adding new blocks in platforms that support content creation. The Hive Blockchain technology need to be validated and protect users account from fishers and hackers so there must be concensus to update the system for smooth running.
Staking of Hive As compounding investment
In Hive there are three (3) categories of rewards to incentivize the Content Creator of the Author for his effort of sharing valuable content on the Hive Blockchain. These are Hive, Hive Back Doallar and Hive Power. Currently, the Hive Back Doallar and Hive Power are given due to low value of Hive. The Hive Power are then stake by keeping them in our wallet wiithout powering down. Long term Investors could could hold their Hive Power for Five (5) to Ten (10) years without unstaking. This help content creators to influence the Blockchain through voting and commenting on other posts. Proof of Delegation can be done to support other community to grow. Another form in which we can stake Hive is through powering up with the liquid Hive. The Hive Back Dollar can be converted to to Liquid Hive and use to power up. This serves as compounding profit.
The 50/50 Reward Split Between the Author & Creator.
There are two ways in which the rewards are earned: the curator's reward and content curator's reward. In all, the rewards earn is 100%. This reward is split into two; the Author takes 50% and the Curator takes 50%. When the Author earns 50% and power up after post payout and again earns curator's reward and power up it turns to increase the reward pool too. Actually, there is some percentage that goes to the reward pool tool for Blockchain maintenance. All these goes to keep the Hive Blockchain very strong.
Recurring rewards
Staking helps earning passive income when we stake, it keeps multiplying our in our assets portfolio. In Hive Blockchain for instance, Right now I have 1,145 HP of Stake. In simple analysis if I'm able to to invest through upvoting Author's work for returns of Author's rewards which gives Approximately $0.10 on each content cast. The rewards is going to replicate as I keep upvoting. Casting for 100 Authors give curation rewards of $10 Hive. There is a second layer of rewards for the sharing contents. Good contents attracts higher upvotes. So there nothing to loose when it comes to investing through Staking of Hive.
Staking through Proof Of Delegation(PoD)
Many Investors delegate some Hive Powers to various Communities and get daily returns. Depending on the amount of Hive you delegate would tell the daily returns. These returns can be the Liquid Hive or Hive Back Doallar. In some Delegatee they give upvotes of content of the Delegator for giving out his power for the work of the community.
As mentioned already, staking, promote the blockchain like Hive and Leo by increasing efficiency and security. For instance we have Hive Witnesses and Developed, and Hive Team sustainability to protect your account from Fishers and Hackers.
For all those who stake have promised to lock up their Crypto coins to incentivize good projects. So you rather gain some rewards for this sacrifices.
Some cryptocurrencies work as Delegated Proof of Stake(DPoS), for instance Hive protocol, users are allowed to use their coin balances to vote and support the community, especially the Newbies in the community.
In Summary, staking play a major role as far as Blockchain is concerned. It's one of the key component that sustain the Blockchain and their users. Staking is also one of the long term investment with much incentive.