What is Slashing in Staking – Risk Management for Staking
Staking is one of the best ways to earn a passive income in crypto. The year 2020 saw a proliferation of cryptos that investors can stake that have attracted hundreds of millions of dollars in investments. While staking is a great way to earn in crypto space, it carries its risks, and if you are not aware of them, they can cost you a lot, especially if you are a large investor — one of the most significant risks that you face in crypto. Simply put, slashing means forfeiting your crypto holding of staked cryptos in case you break the staking rules of the concerned project. The goal is to ensure that all staking nodes adhere to the rules and keep the project safe. Unfortunately, if you are not fully conversant with the rules, it can cost you a lot since you would nearly lose your hard-earned money, with no option of getting them back. The essence of this guide is to help you manage the risks that come with staking, especially the risk of losing your coins. To make it easier for you, the guide delves deeper into proof-of-stake and the various aspects to it that can make you a better investor.
