With yield chasing and liquidity mining on decentralized finance (DeFi) platforms being the current crypto craze, Qtum (QTUM) is offering a more robust value earning mechanism via offline staking without any significant risks to user funds. Offline staking on Qtum follows a major protocol upgrade at the end of August.
With Ethereum (ETH) 2.0 still in the testing phase, projects like Qtum are seizing the moment to gain even a greater share. As more blockchains move towards full Proof-of-Stake (PoS) consensus, platform devs are going to be putting more effort into incentivizing greater adoption to improve the network effect of their respective blockchains.
A Primer on Offline Staking
Unlike in online staking, offline staking enables token holders to stake their “coins” right from their cold wallets. This method offers greater security protection for crypto owners as the staking process occurs within an “air-gapped” offline wallet.
Staking has become a popular method of earning interest on cryptocurrency tokens as several blockchain networks make the transition to PoS consensus. In PoS, instead of contributing computer power to the network — as is the case with Proof-of-Work (PoW) — token owners hold their coins in staking wallets that earn rewards for validating transactions on the chain.
Apart from the security benefits, offline staking is becoming more popular owing to the significantly lower technical barrier. Instead of the hassle of setting up a dedicated network node, offline staking allows token holders to stake their cryptos to an already existing node operator.
Finally, with offline staking, the crypto tokens remain domiciled in the user’s offline wallet. Granted such wallets are compatible with the network’s staking delegation protocols, token owners need not surrender the custody of their coins to participate in staking as is the case with online staking.
Qtum Staking is All About Fair Governance
In a press release shared with Blockonomi, Qtum revealed that offline staking was the most requested feature by the community hence the team’s decision to pursue the August hard fork. The offline staking protocol upgrade comes almost on Qtum’s third anniversary.
According to the Qtum press brief, offline staking on the platform enables token holders to earn a significant yield on their coins without the risk of value slashing or having to lock-up their QTUM in delegated vaults for weeks at a time. The Qtum team says the emergence of offline staking is the first step in a wave of fresh innovations coming to the blockchain platform.
Explaining the unique benefits of Qtum offline staking, an excerpt from the press brief reads:
As an established blockchain with strong security guarantees, Qtum enables defi users to earn a return on their holdings without making themselves a target for hackers. By staking their tokens into a secure offline wallet, Qtum provides all the benefits of yield farming without the downside it carries.
With offline staking activated, Qtum says its network will become even more democratized. In the absence of minimum staking requirements, offline staking will incentivize users to stake their coins from their wallets, no matter the size of their position resulting in a more distributed network effect for the blockchain.
Offline staking on Qtum will also users to stake tokens of others by running a node and earning fees in the process. According to the press briefing, exchanges like Binance, Huobi, and OKEx already support Qtum offline staking.