What is "Staking" and what should you pay attention to

Many people do not understand that Staking is the process of delegating the right to vote. In essence, you delegate your authority and choose the best validator by locking your coins and giving them voting rights.

Most trusted blockchains that support various forms of delegated staking do not require you to actually transfer your assets to a trusted validator. The validator only gets the right to use your stake to increase his "power", but does not have the ability to dispose of your blocked funds. Therefore, if the validator starts asking you to transfer funds, it may be a fraud attempt. Likewise, if it asks for your private key or a mnemonic phrase to work with your delegated stake, you should be alert, as this could also be a scam attempt.

The problem is that even such trusted as validators are also people who can make mistakes and perform wrong actions, for which they will be automatically punished by the system. One of the simplest ways of punishment is financial fines.

Most importantly, even if your validator crashes, disappears or simply shuts down its node, your coins will be unlocked for 21 days (in the case of Cosmos HUB), but the lock period may vary in different blockchains. Once unlocked, you can redirect your stake to another validator, so you don't have to worry about your coins.

Importantly! Be careful and check the consensus algorithm of each blockchain you plan to delegate your coins to. There can be pitfalls everywhere, as well as "bad actors" according to Game Theory, and the algorithm itself has its own mechanisms to punish them.

There are actually two options, which depend on the specifics of the consensus algorithm used in the blockchain. For example, in some algorithms, such as Liquid Proof-of-Stake (LPoS), as in the Tezos project, only the validator itself is penalized. At the same time, in Bonded Proof-of-Stake (BPoS), fines will be imposed not only on the direct violator, but also on all those who "lent" him their assets.

Conclusions: Staking is a great way to increase your assets while holding them in #HODL mode while contributing to network security. However, it is important to be careful and use only

a) checked wallets,

b) diversify your risks (you can divide your assets into 2-3-5 wallets),

c) take into account the "time frame" when your stake will become available to avoid misunderstandings with the consensus algorithm.