In the world of cryptocurrency, investors are constantly looking for new ways to increase their profits, and staking is undoubtedly a popular option. This article will delve into the Pre-Staking mechanism of ICP tokens and help you better understand how this process can bring huge returns to investors.
What is Staking?
Staking is a mechanism for depositing cryptocurrency into a blockchain network to earn rewards. It is similar to depositing money in a bank. Investors entrust a certain number of tokens to the governance model of the blockchain, and the tokens are withdrawn from circulation within a specified time. In this way, the blockchain network can lock investors' funds and reduce the circulating supply, thus bringing benefits to both the network and investors.
During the staking process, investors can obtain corresponding rewards as their trust and support for the project. This mechanism not only increases investors' returns, but also helps improve the security and stability of the blockchain network.
The concept of Pre-Staking
Pre-Staking is an important part of the Ice project. During this phase, users have the opportunity to pre-stake their Ice tokens, thereby increasing the mining rate. Specifically, users can choose a staking period of up to 5 years. The longer the staking period, the higher the rewards they will receive.
During the Pre-Staking process, users can choose a certain proportion of their balance to pledge, and this proportion can only be increased, not reduced. This flexible option allows users to tailor it to their own investment strategy.
Advantages of Pre-Staking
Taking Alice as an example, her balance is 10,000 Ice. This was obtained by mining with a team of friends. Although there are still 10 months until the mainnet transition, Alice decided to increase her mining rate through the pre-staking process. She chooses to pre-stake 75% of her balance for 5 years, which will bring an additional 150% bonus to her mining rate.
In the next 10 months, Alice’s mining income will increase significantly. Assuming the basic mining rate is 16 Ice/hour and the daily mining bonus is 100% (because Alice is very active in the network), then she will receive an additional 16 Ice/hour reward.
By pre-Staking 75% of the balance, Alice can not only obtain the basic 16 Ice/hour and daily bonus in the subsequent mining process, but also obtain 187.5% of the mining reward from Pre-Stake . In this way, her total mining income per hour will reach 92 Ice, including:
Base mining rate: 16 Ice/hour
Daily activity reward: 16 Ice/hour
Pre-Stake reward: 60 Ice/hour (based on 187.5% reward)
Further benefits from the mainnet phase:During the mainnet stage, Alice’s income will continue to increase. During the 5-year staking period, she will benefit from the network’s staking rewards. For example, if the average annual interest rate over the 5-year period is 15%, she will receive an additional 75% bonus. These rewards are available daily, further boosting her overall earnings.
This design not only encourages users to participate in Staking, but also ensures the stability and security of the network. By locking up their tokens, users provide essential support to the network, and the network rewards investors with generous rewards.
Summarize
Through the analysis of ICP tokens and their Pre-Staking mechanism, we can see that Staking not only provides investors with a stable source of income, but also provides support for the security and stability of the blockchain network. Whether you are a novice or an experienced investor, participating in Pre-Staking is an option worth considering.
In this rapidly evolving cryptocurrency market, it is crucial to understand the various investment mechanisms. I hope this article can provide you with an in-depth understanding of the ICP token and its pre-staking mechanism and help you make informed decisions in your future investments.