Staking & Governance
Staking refers to the process of holding and "staking" a certain amount of a particular cryptocurrency in a wallet or on a blockchain network in order to participate in the validation and processing of transactions on that network. Staking is often used in proof-of-stake (PoS) blockchain systems, where the chances of being selected to validate a new block and earn a reward are proportional to the amount of cryptocurrency that a user has staked. By staking their cryptocurrency, users can earn a passive income in the form of staking rewards.
Governance refers to the process of making and enforcing rules and decisions within a blockchain network. In a decentralized network, governance is typically accomplished through the use of smart contracts or other decentralized governance mechanisms, where users can propose and vote on changes to the network. By participating in governance, users can have a say in the direction and operation of the network and potentially earn rewards for their participation.
Staking and governance are closely related, as staking is often a requirement for participating in governance on many blockchain networks. Users who stake their cryptocurrency and participate in governance can potentially earn both staking rewards and governance rewards, depending on the specific blockchain and its rules.