Staking Pools

Centralized exchanges, wallets, and third-party services offer custodial PoS staking pools, sometimes compared to savings accounts. In exchange for locking coins for a time, users receive certain yields minus fees. Pooling of resources gives token holders indirect access to some staking benefits.

However, the custodial character of most staking pools means the rewards are paid at the discretion of the third-party validator, who is the direct recipient of the mined tokens. It also goes against the philosophy of decentralized finance or the complete ownership of one's crypto asset. The risks of staking pools include exit scams, rug pulls, hacks, thefts, or bankruptcy of the central entity.

Staking through the pools also requires extensive research and often complicated delegation mechanisms that may cost users their assets.

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