What Is White Label Staking?
White label staking is a premium form of staking tokens in the cryptocurrency space.
It involves creating a validator node specifically for token and crypto holders and managing it by a third-party operator.
This is particularly beneficial for technology companies or individuals who may not be familiar with the setup and maintenance of validator nodes.
Despite being managed by a third party, the ownership of the nodes and assets remains with the token and crypto holders.
Unlocking the Potential
White label staking offers a range of potential benefits.
It provides a fully customizable, branded offering for white label validators, allowing them to tailor the node to their specific needs.
While rewards are generated on behalf of the customers, the fees charged at the protocol level can be fixed.
By partnering with a white label staking provider that has high-security standards and robust infrastructure, token holders can maximize their rewards.
The provider ensures constant uptime, offers 24/7 engineering support, and maintains 100% slashing insurance to protect against penalties for improper operation.
High Minimum Staking
However, white label staking does come with some considerations. It often requires a high minimum staking requirement, such as 32ETH, which may be a barrier for smaller retail investors.
Institutional investors and individuals with access to a large pool of capital are better suited for white label staking.
Additionally, the effectiveness of white label staking may vary across different blockchains, as some may require a significant amount of stake to make it more attractive than delegating to a public node.
Understanding Public Delegation
In contrast to white label staking, public delegation involves token holders delegating their Proof-of-Stake (PoS) tokens to existing public validators.
This option is more suitable for token holders who do not have the capital to meet the minimum requirements for setting up their own validator nodes.
Public delegation offers a simpler and faster solution for generating staking rewards, with lower overheads and a quicker time to market.
However, token holders have less customization options, and the staking nodes are branded under the validator node provider rather than the individual stakers.
Shared Rewards and Considerations
Another option is staking pools, where multiple token holders pool their tokens, allowing the staking pool operator to achieve validator status and distribute rewards to all stakeholders based on their contributions.
While staking pools offer lower minimum overheads and are attractive to retail investors, it is crucial to choose a reputable pool operator to ensure proper performance and avoid malicious intent.
Staking in pools may also result in reduced rewards compared to direct staking, as rewards are split among the participants after deducting platform fees and commission rates.
Each staking method has pros and cons, and token holders must research and evaluate which approach is most suitable for their needs.