How Are Cold Staking Pools Going to Benefit the Particl Network?

In short, it’s going to make staking much more accessible and practical to everyone, regardless of the number of coins you hold or your level of expertise.

Staking With Fewer Coins

In fact, staking with only a small PART balance is not ideal because of the size of each staking reward (~1.25 PART at the time of this writing). To put that in perspective, consider the moment 1 PART was worth around $50. If you wanted to buy $1,000 worth of Particl, that would have given you around 20 PART. Back then, the staking interest rate was 5%. This meant that, after one full year of staking, you would have earned around 1 PART staking on the network, a yearly reward that is smaller than the payout size. In other words, chances are high that you wouldn’t even have received a single reward during the entire year even though you helped secure the network the whole time. This phenomenon is not unlike “solo mining” with a poor GPU on Proof-of-Work networks.

Now, with cold staking pools, you could “team up” with the other stakers connected to the same pool as you and get a share of the staking rewards earned by the pool proportional to how much you’ve contributed to it. Instead of waiting a long time to receive one large staking reward, you would receive smaller but more frequent rewards. This makes staking much more interesting and interactive, and also makes staking with fewer coins more stable and reliable.

Easier to Set Up for Non-Technical Users

Another obstacle to cold staking is the technical level required to set up a cold staking node. Although not overly complicated, especially when following the cold staking node setup tutorial, it does require time and effort to correctly execute. It also generally requires the use of a staking device like a Raspberry Pi or a VPS server, all of which adds up to the difficulty and hassle of setting cold staking up.

On top of that, staking devices need to be maintained quite regularly: you need to make sure it is up 24/7, you need to ideally keep it updated to the latest Particl Core version (especially when there are hardforks), and you need to make sure it is properly restarted when, for example, there is a power outage or something that makes the electricity go off.

For a lot of users, especially the less technical ones, the dedication it takes to set cold staking up and maintain its device is simply too much. Cold staking pools, on the other hand, do not require you to prepare and manage a staking node since that part is taken care of by the pool operator. Enabling cold staking has never been as easy as with cold staking pools, and it shouldn’t take more than 2 minutes off of your time!

More Coins Being Staked

Because of how much it would benefit some types of users, cold staking pools are likely to encourage more people to stake their coins. This will benefit the network by having fewer available coins on the markets, meaning it would be much harder for an attacker to acquire large sums of PART coins and try to damage the network with a 51% attack. In Proof-of-Stake networks, more coins being put up for staking means it is more secure.

Note: Staking pools do present a risk to the network if misused. In fact, while they make 51% attacks harder to execute by reducing the number of coins available on the markets, they could also potentially end up staking 51% of the total network supply if users are not careful enough. As such, we encourage as many people within the community to come up with their own cold staking pools (the source code is openly available here) in order to create many different options for users which would lead to a better decentralization of the staking supply.