Web 3.0 Proof of Work Staking.

The Proof of Stake (PoS) blockchain – “staking incentives”, is a way of having an additional income on investment, and also, ways in which web 3.0 protocols compensate users. 

There are currently three principles of staking. 

The Consensus staking 

Consensus Staking is done on a proof of work blockchain, which can be referred to as layer 1 blockchain. Staking actively supports the computational backing of the network by consensus mechanism, users deposit funds through a decentralized smart contract application into a node which acts as an agent in delivering some set of computational proposals for consensus on a certain block of transactions, and are rewarded in return for cooperation. Consensus staking is necessary for (PoS) blockchain, and arguably the most important form of staking because it secures the actual computational basis, by which, most modern blockchains operate for on-chain security.

Liquidity Provision Staking (LP)

Liquidity The Proof of Stake blockchain – “staking incentives”, is a way of having an additional income on investment, and also, ways in which web 3.0 compensates users.  staking is a mechanism that requires the combination of two different currencies eg ( UST + the protocols), this is possible through the third-party Decentralized Exchange (DEX). Liquidity provision is generated to keep a steady price of the project, participants are sometimes given additional rewards, such as the Airdrop advantage, or an increase in provided Annual percentage yield (APY). 

Single Side Staking 

“Single Side Staking” is referred to as “governance staking“. In single-side staking, users lock tokens for a given period in return for an extra yield, in most cases, such staking methods are accompanied by certain governance rights, which may be lower in reward compared to liquidity staking, in order words, higher than consensus staking due to the relatively higher volatility of the decentralized application (Dapp) that such single-sided staking pools are usually associated with.

Governance 

Governance on the blockchain is a “phrase” used to describe token holders of a protocol. The token gives holders the privilege to participate in any on-chain and off-chain event, such as staking, decentralized voting, or delegating. 

Conclusion

Staking was introduced as an alternative for proof of work blockchain due to its energy consumption and high cost of network maintenance. staking is important for any decentralized protocols because it sustains the price of the project.