Passive income vs. vulnerability to changes in the market.
The most obvious advantage of staking is the opportunity to generate income from the cryptocurrencies you own. Staking also offers the opportunity to become an active participant in your favorite blockchain projects.
However, by participating in staking, users freeze their cryptocurrency funds for a fixed period. This means that in the event of a sudden market crash, they will not be able to withdraw their crypto from the staking program to sell and mitigate losses.
Even in the event of a small market contraction, the value of the rewards may not cover the decrease in value of the crypto. When participating in a staking pool, you should be aware that someone else may take custody of your cryptocurrencies, which introduces risks. In line with general advice for crypto users, all private keys must be kept safe and never shared with other people or entities.
