The crypto industry continues to grow full of innovation alongside the appetite for different types of reward-yielding opportunities within the ecosystem. Market participants have multiple ways to receive competitive returns. Among these opportunities is staking, whereby individuals can utilize their idle assets to generate rewards.
Today, we are pleased to announce that sFOX supports Staking for Avalanche (AVAX), which aims to deliver a scalable blockchain solution while maintaining decentralization and security, focusing on lower costs, fast transaction speeds, and eco-friendliness.
While it has been possible for investors to stake Avalanche by running their validator nodes or through DeFi services, the process can be confusing, capital-intensive, highly technical, and complex.
sFOX enables participation in these assets in a manner that allows investors to stake in minutes, securely, and without ever moving their funds from their accounts. This process is called delegation, a way of contributing digital assets to a public validator node to help it conduct Proof-of-Stake (PoS) validation.
Staking vs. Delegation
Nowadays, staking has become a familiar financial instrument for crypto investors.
Through staking, you can earn income with your crypto by participating in the network of a particular asset. When you stake your crypto, you make the underlying blockchain of that asset more secure and more efficient. And in exchange, you get rewarded with more tokens from the network.
The easiest way to understand crypto staking is to compare it with our savings bank account. When we deposit money into a savings account, the bank pays us interest as a reward. That is precisely what crypto staking does too.
Crypto holders can participate in the network in two ways:
- Staking: in this scenario, users will physically stake (transfer) their coins to a validator node. Node operators earn the block rewards or transaction fees related to the blocks they validate.
- Delegation: a few PoS protocols allow users to “vote” on validator nodes by pooling their tokens into a staking pool and linking those to a particular delegate.
Operating a validator it’s often time-consuming. It requires knowledge and a material amount of tokens. You may make a mistake, incur penalties, or even be suspended from the consensus process and have your funds removed – a phenomenon called slashing.
Certain PoS protocols allow for delegation. Therefore, digital asset holders who don’t have the resources or technical know-how needed to operate validator nodes but still want to earn rewards may choose to delegate.
How to Delegate AVAX on sFOX in minutes
Delegating AVAX on sFOX is uniquely seamless. sFOX’s platform makes it easy to stake, unstake, and manage staked funds in the app and via API.
All you need to do to begin is:
- Navigate to the Staking page in the app
- Click “Begin Staking”
- Select the asset you’d like to stake
- Input the amount you’d like to stake
- Click “Stake”
As outlined above, by delegating AVAX, investors can stake with peace of mind, limiting the counterparty risk, as they don’t need to physically transfer the assets to another wallet.
Additionally, our clients will benefit from:
- Instant and Automatic Rewards: sFOX optimizes for yield while maintaining security and reliability. Rewards are immediately credited at the end of the staking period.
- Market Neutral Yield: clients eligible for Post Trade Settlement (PTS) can hedge their staked AVAX to mitigate price risk during the staking period.
- Collateral Efficiency: Staked assets are considered collateral so clients can earn passive income on their equity while trading.
- Staking straight from Custody: For clients of our regulated SAFE Trust Company, our SAFE Custody solution enables secure participation without ever moving clients’ funds from their SAFE Trust accounts.
At sFOX, we simplify and secure the staking process, allowing investors to stake their assets, with more confidence in just a few steps. We are thrilled to continue building out a robust suite of products that enhance the crypto experience of our institutional clients.