What is staking?

What is staking?

Staking is a passive income technology that involves blocking cryptocurrency in an investor/farmer’s wallet, and which entitles the investor to profit for having blocked or in other words “deposited” his coins. Investors who earn income through staking are called stackers in the cryptocurrency world. The principle of earning for stakers is based on holding coins. The more coins, the higher the income level of the owner will be. The principle is simple. The blockchain algorithm rewards a staker for extracting liquidity from the market i.e. for reducing the number of coins in circulation. Thus, the cryptocurrency becomes less volatile, as the number of long-term investors increases among holders of such cryptocurrency and the number of speculators decreases.

Staking is considered one of the easiest and safest methods of earning passive income. A participant in the blockchain network does not transfer their asset anywhere - the currency remains in their wallet, namely at the staking address of the cryptocurrency owner. Premium is transferred by the blockchain system to the same staking address if certain conditions are met by the staker.

Staked coins are held for a specific amount of time. This time is denoted in the description of the blockchain protocol. During this period, the owner of the cryptocurrency should not use the funds and withdraw them from the wallet. A similar principle is implemented in term bank deposits. Because the investor remains the owner of the coins, he retains the right to use his own funds. However, if he makes the transfer before the withholding period expires, he will not receive the interest due, that is, the reward. These inconveniences, in turn, are compensated by the premium.

To become an Achi’s blockchain network staker, you need to:

  • - Acquire or farm the achi cryptocurrency.

  • - Generate a special staking address of the form “ach1stake”.

  • - Transfer to this address one or more coins with a face value of 1 million achi each.

  • - Further, it is necessary not move the coins on the staking address for a certain period of time and subsequently receive premium at the same address.

How long do I have to wait to get paid for staking?

In order to receive income from staking, an Achi staker must leave the coins untouched for at least the amount of time between the next halvings. For example, the 5th halving occurs on April 14, 2022, and the 6th halving occurs on December 26, 2022. The staker must place the coins on the staking address by April 14, 2022 and do not touch them until December 26, 2022, then immediately after the 6th Achi halving the staker will start receiving income. Once the staker touches coins with a face value of 1 million aсhi, the touched coins will stop generating income for staking. In order to receive staking income on the touched coins again, it will be necessary to wait and do not touch these coins again not only until the next Achi halving, but also until the next halving after it.

How does the blockchain system distribute interest among stakers?

Let us assume Alice put Y coins on the Achi halving, with N being the total number of coins of all the stakers. The blockchain algorithm pays out a total of X coins to the stakers in period = t. Then the number of coins Alice will get for staking her coins will be calculated by the following formula: D = Y*(X/N), where X/N is an amount, which the system is willing to pay a staker for 1 coin. The amount of earnings in staking is directly related to the number of “withheld” coins. For example, Alice has put 1000 achi coins on her staking address, and the blockchain algorithm pays 10000 coins to stakers in period t and the total number of coins lying on the staking is 500000, then Alice will receive the following amount of interest for staking D = 1000*(10000/500000) = 20 achi coins, i.e. her income for staked coins will be (20/1000)*100% = 2% for period t.

Happy staking!