Documentation
What is Tera Stake Finance?
Tera Stake Finance is a decentralized protocol that enables both sophisticated DeFi experts and novice users to passively earn compelling returns across three strategies.
Users' funds are pooled together in the main contract (one for each token supported by Tera Stake Finance) in order to minimize gas paid for reallocating funds and provide, at the same time, the highest aggregated interest rate for all pooled funds.
Tera Stake Finance is a solution designed for everyone - newcomers and professionals alike. Our aim is to enable easy access to the crypto world. We want everyone to equally benefit from rewards that come from various digital assets and as a result speed up the advent of crypto adoption worldwide. We believe that by providing a great value to our customers, product design excellence and education, we can help both people and industry to achieve the win-win scenario. We are committed to shaping Tera Stake Finance to fit with a “user first” approach. With that in mind, we’re also very open to collaborating with new partners, exchanges, platforms, teams and entrepreneurs to participate on new and existing user-centric projects.
What is Staking?
You may think of staking as a less resource-intensive alternative to mining. It involves holding funds in a cryptocurrency wallet to support the security and operations of a blockchain network. Simply put, staking is the act of locking cryptocurrencies to receive rewards. In most cases, you’ll be able to stake your coins directly from your crypto wallet, such as Trust Wallet. On the other hand, many exchanges offer staking services to their users. Tera Stake Finance Staking lets you earn rewards in an utterly simple way – all you have to do is deposit your tokens and start staking. To get a better grasp of what staking is, you’ll first need to understand how Proof of Stake (PoS) works. PoS is a consensus mechanism that allows blockchains to operate more energy-efficiently while maintaining a decent degree of decentralization (at least, in theory).
How does staking work?
As we’ve discussed before, Proof of Work blockchains rely on mining to add new blocks to the blockchain. In contrast, Proof of Stake chains produce and validate new blocks through the process of staking. Staking involves validators who lock up their coins so they can be randomly selected by the protocol at specific intervals to create a block. Usually, participants that stake larger amounts have a higher chance of being chosen as the next block validator. This allows for blocks to be produced without relying on specialized mining hardware, such as ASICs. While ASIC mining requires a significant investment in hardware, staking requires a direct investment in the cryptocurrency itself. So, instead of competing for the next block with computational work, PoS validators are selected based on the number of coins they are staking. The “stake” (the coin holding) is what incentivizes validators to maintain network security. If they fail to do that, their entire stake might be at risk While each Proof of Stake blockchain has its particular staking currency, some networks adopt a two-token system where the rewards are paid in a second token. On a very practical level, staking just means keeping funds in a suitable wallet. This enables essentially anyone to perform various network functions in return for staking rewards. It may also include adding funds to a staking pool, which we’ll cover shortly.
How are staking rewards calculated?
There’s no short answer here. Each blockchain network may use a different way of calculating staking rewards. Some are adjusted on a block-by-block basis, taking into account many different factors. These can include: how many coins the validator is staking how long the validator has been actively staking how many coins are staked on the network in total the inflation rate other factors For some other networks, staking rewards are determined as a fixed percentage. These rewards are distributed to validators as a sort of compensation for inflation. Inflation encourages users to spend their coins instead of holding them, which may increase their usage as cryptocurrency. But with this model, validators can calculate exactly what staking reward they can expect. A predictable reward schedule rather than a probabilistic chance of receiving a block reward may look favorable to some. And since this is public information, it might incentivize more participants to get involved in staking.
What is a staking pool?
A staking pool is a group of coin holders merging their resources to increase their chances of validating blocks and receiving rewards. They combine their staking power and share the rewards proportionally to their contributions to the pool. Setting up and maintaining a staking pool often requires a lot of time and expertise. Staking pools tend to be the most effective on networks where the barrier of entry (technical or financial) is relatively high. As such, many pool providers charge a fee from the staking rewards that are distributed to participants. Other than that, pools may provide additional flexibility for individual stakers. Typically, the stake has to be locked for a fixed period and usually has a withdrawal or unbinding time set by the protocol. What’s more, there’s almost certainly a substantial minimum balance required to stake to disincentivize malicious behavior. Most staking pools require a low minimum balance and append no additional withdrawal times. As such, joining a staking pool instead of staking solo might be ideal for newer users.
How to stake on Tera Stake Finance
In a way, you could think of holding your coins on Tera Stake Finance as adding them to a staking pool. However, there are no fees, and you can also enjoy all the other benefits that holding your coins on Tera Stake Finance brings! The only thing you have to do is hold your PoS coins on Tera Stake Finance, and all the technical requirements will be taken care of for you. The staking rewards are usually distributed at the end of each staking period.
