Illiquidity Risk
Digital assets, esp. cryptocurrencies are subject to high price volatility. While staking provides delegators with a mechanism to offset / hedge against a certain degree of volatility, it sometimes results in the staked tokens being illiquid for a certain period of time.
For delegators, this might result in being unable to respond to certain price movements for the said period. The exact duration of how long tokens are locked differs for each protocol.
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Illiquidity Risk
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Protocol Mechanics
For better classification, differentiation and comparability of different Blockchain networks, we identified different Protocol Mechanics.
Staking Mechanics
Staking Mechanics refer to the token economics, which is a new branch of the economy that explains the structure of a particular ecosystem in the blockchain sphere. It describes the study, design, and implementation of economic systems built on blockchain technology. Each platform and blockchain application is developed under its own token-economics model.
Proof-of-Stake blockchains not only differ in terms of their 'Protocol Mechanics', but also in terms of certain staking-related parameters, e.g. their reward or inflation rate as well as certain actions that are required by delegators.
