Staking is essential to the Proof of Stake consensus mechanism used on the STRAX Blockchain. Blocks are verified and mined by network participants who are willing to set aside a portion of their tokens, effectively freezing them so they cannot be spent. In return, these participants are granted the right to verify transactions and earn bonuses paid in tokens. The larger the number of tokens a participant is willing to stake, the greater the chance they will be selected to mine the next block and earn the associated reward.
While tokens are being staked, they are frozen in a wallet. If the wallet is connected to the blockchain network, it is referred to as a hot wallet. Such an arrangement incurs a level of risk as the wallet is effectively exposed to the internet and therefore susceptible to attack. Conversely, if the wallet stores tokens offline (as is possible in the Stratis wallet, a hardware wallet, or even a paper wallet), it is known as a cold wallet and the staking process is referred to as “Cold Staking”. Cold Staking is inherently safer than staking in a hot wallet since tokens are not susceptible to online attacks while held in an offline wallet.
Cold-Staking has been activated on the STRAX Blockchain since its inception. However, relevant changes have now been made within the STRAX Wallet, enabling Cold-Staking configurations to be set up with relative ease.
This release includes a later release of the STRAX Wallet and an accompanying document that details the steps required to configure Cold-Staking securely while also detailing how to withdraw from your Cold-Staking setup.