Ensuring the safety of client funds is our top priority. We always hold withdrawal keys in cold storage vaults, which means staked ETH and accumulated earnings are always safe. To further ensure the security of customer accounts, pledge transactions must complete consensus before they can be executed.
By providing a secure form of useful work to the underlying blockchain, staking can provide passive income for assets that are already escrow. The Ethereum blockchain rewards pledgers for good work, but also punishes those who fail to perform their duties, such as downtime. This is why it is important to staking with a reputable and efficient provider to maximize returns while minimizing risk.
Staking rewards for most assets can be thought of as akin to compounding interest, unlike traditional markets where dividends are reinvested. Since staking rewards are paid in staked tokens, users can “reinvest” those tokens to receive higher payouts in the next period. In addition, staking tokens are usually stored in their respective wallets, which means that users do not need to re-stake to receive benefits.