As staking continues to raise institutional and retail interest, it’s critical to partner with active validators on the network that possess the right infrastructure for your staking needs. Thus, this blog will explore the main differences between white label staking and public delegation and who you should stake with.
Why is Staking an Attractive Option to Earn Yield?
Staking is, when compared to yield farming, for example, a much safer method of earning yield. In DeFi (decentralized finance), yield farming is a much riskier proposition. Some of the key risks include smart contract bugs, rug pulls, high gas fees, and liquidation risks, amongst many others.
Additionally, staking is also attractive for investors, institutions, and retailers because Proof-of-Stake (PoS) blockchains help minimize the sting of inflation. As more coins are added to circulation, your staked assets grow your holdings simultaneously. If you don’t stake, you forfeit the opportunity to mint new coins, and earn rewards.
White Label Staking vs. Public Delegation: What’s the Difference?
In simple terms, white-label staking is considered a more premium way of staking your PoS tokens. With white label staking, a customer gets their validator node explicitly created for them. This is managed entirely on their behalf by a third-party operator, such as Blockdaemon.
On the other hand, as the name suggests, public delegation is when a customer delegates their PoS tokens to an existing public validator. To understand which staking offering checks all of the boxes for your staking needs, let’s take a look at the pros and cons of each.
White Label Staking Pros
At Blockdaemon, we offer the following benefits of white label validator nodes:
- Branding – white label validators offer a fully customizable, branded offering
- Variable fees – while Blockdaemon generates yield on the customer’s behalf, they set the fees they charge at a protocol level
- Tailored solution – Blockdaemon tailors the node to the customer’s specific needs while being maintained with 100% slashing insurance, constant uptime, and 24/7 engineering support
White Label Staking Cons
- High minimum staking requirements – many institutions and individual investors choose the white label option because they have access to a large pool of capital. This capital allows them to earn staking rewards on their own, without needing to delegate to a third party. For example, Eth2 requires 32 ETH + gas to run a validator node. Other chains, such as Cardano and Solana, require a large amount of stake for white label to be more attractive than simply delegating to a public node
Public Delegation Pros
At Blockdaemon, we offer the following benefits of public delegation validators:
- Simplicity – this is an ‘off-the-shelf’ solution for generating staking rewards with minimal requirements for getting started
- Speed-to-market – customers can delegate and earn yield as soon as possible, allowing them to get started staking rapidly
- Low overheads – Blockdaemon offers reliable staking yield through our public validator offerings – with minimal overheads for the customer
Public Delegation Cons
- Blockdaemon earns staking rewards for the customer, yet they have no ability to customize the validator to their specific requirements. All staking nodes are branded as Blockdaemon, rather than an individual customer
Start Staking with Blockdaemon Today
Today, institutions can face many challenges when accessing staking yields themselves. Therefore, apart from choosing a suitable staking offering, it’s critical to select a validator that offers:
- Security: safe and reliable staking depends on the strictest security standards
- Robust Infrastructure: the flow of funds across PoS blockchains relies on high-quality validator nodes. By ensuring that high-quality nodes are used, maximum yield can be earned
With a trusted partner like Blockdaemon, institutions can easily overcome staking challenges and start earning quality staking yields today. So start growing your rewards today, and we’ll take care of the rest so you can focus on your core business functions. Have any more questions? Check out our dedicated FAQs section or get in touch with our team.