sidestaking

Sidestaking is a term sometimes used in the context of cryptocurrency and blockchain technology. It refers to the practice of earning rewards by holding a specific cryptocurrency in a wallet and, in some cases, delegating those holdings to a validator. This is distinct from traditional staking, where users might actively participate in validating transactions on a proof-of-stake network. Sidestaking, as the name suggests, can be seen as a more passive approach to earning yield on digital assets, often without the user needing to run their own node or engage in complex network operations.

The rewards generated through sidestaking can vary significantly depending on the cryptocurrency, the network's consensus mechanism, and the specific platform or service being used. Some platforms might offer sidestaking directly through their interfaces, while others may integrate with existing staking protocols. The underlying mechanism often involves the cryptocurrency's native inflation or transaction fees being distributed to holders who meet certain criteria, such as maintaining a minimum balance or locking their funds for a specified period. It's important for individuals to research the specific terms and risks associated with any sidestaking opportunity, as it typically involves locking up assets and carries market-related risks.