Cryptocurrency hardware wallet Ledger will now let you passively earn cryptocurrency, through a process known as staking. Ledger has today added the service to its Ledger Live platform‚ an online portal for managing cryptocurrencies.
Staking is a process where users lock up some of their funds as collateral in exchange for helping to run a proof-of-stake blockchain network. In return, new coins are created daily and are rewarded proportionally to those who are staking their coins.
Ledger has added Tezos as the first coin for this service. Tezos is a proof-of-stake cryptocurrency that’s focused on bringing governance to the blockchain.
In recent months, crypto exchanges including Binance and Coinbase have added staking services on their exchanges, staking users coins on their behalf and handing out the rewards. In a statement, Ledger said it largely wants to do the same, but with a few added features.
“Ledger offers users more control over staking: Unlike on exchanges where users are giving up their rights to choose who to delegate to, by using Ledger Live you are able to select from a wide list of validators based on your own preferences,” said the press release.
Validators help to keep the network running. Those staking coins are able to choose who the validators are, in essence helping to ensure that good actors are continuing to process transactions in an honest way. The worry by giving over this control to an exchange is that the exchange could decide to back a bad actor and work in cahoots with them to control the network and profit from it. Rather, by keeping this more decentralized, Ledger hopes to ensure the blockchain stays safe.