The difference between centralized staking and decentralized staking

In some decentralized networks (such as Ethereum 2.0, Cosmos, etc.), users can participate in the network's consensus mechanism and receive rewards by staking their tokens. These networks usually use decentralized verification nodes, and anyone who meets the conditions can become a validator and participate in network governance. Therefore, such staking behavior is decentralized.

Some centralized exchanges or platforms (such as some cryptocurrency exchanges) provide staking services, where users stake tokens on the platform, and the platform is responsible for the management and distribution of tokens. In this case, the platform itself is centralized, and users give control of the tokens to the platform. This is centralized staking. In short, whether the staking behavior is centralized depends on the specific staking mechanism and the way the platform operates.

De-risking and risk diversification of staking are very necessary. But at the same time, the token market itself is a high-risk and high-return coexistence.