Staking Types
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NFT remains in the user's wallet but are locked, commonly seen on marketplaces or wallets with the word frozen, meaning it cannot be moved or sold. The locking mechanism is enforced by the smart contract, which restricts the user's ability to interact with the NFT beyond viewing it.
This method is typically the preferred staking method for the majority of NFT projects. ( Note you cannot freeze a cnft (compressed NFT)
Escrow staking is a staking mechanism where the NFT is transferred out of the user's wallet and into a smart contract or third-party escrow account for the duration of the staking period.
When a user decides to stake their NFT, it is transferred from their wallet to a smart contract that holds the NFT in escrow. The contract manages the NFT for the staking period, ensuring that it cannot be sold or transferred by the user during this time.
NFTs remain in the user’s wallet while they are staked, they are not frozen, holder can sell or move the NFT without unstaking.
This method allows users to retain full control and ownership of their NFTs while still participating in staking rewards.
Smart Contract Interaction: The staking process involves a smart contract that tracks the NFTs staked by a user. The contract doesn't take custody of the NFT but monitors the wallet to verify that the NFT remains in the user’s wallet.
Decentralization: Non-escrow staking is often seen as more decentralized because it minimizes the reliance on third-party custodians.
