1. What is CoinSwitch EARN?
A: CoinSwitch EARN can help you get rewards on certain cryptos, by locking them for validation and without selling for a certain duration.
2. Which cryptos can I find on CoinSwitch EARN and how much reward can I get?
A: Visit the EARN section on the CoinSwitch app to find a list of cryptos on which you can get rewards. Each crypto will be listed along with their respective annual reward rate.
3. What is annual reward rate? Why does the reward rate of a crypto fluctuate?
A: Annual reward rate refers to the percentage of rewards that you will get annually on your locked in crypto.Your CoinSwitch EARN rewards may fluctuate based on the number of people locking their cryptos and the transaction volume on the underlying blockchain. Once the participants have locked their cryptos for validation, the validator will be eligible to add a new transaction to the blockchain in return.
If the elected validator acts in accordance with network rules to validate the transaction, then the underlying blockchain will disburse the reward to the successful validator with newly issued cryptos. The underlying blockchain will also distribute part of the reward to the holders who have locked their cryptos in favour of the validator.
If the transaction is shown to be invalid, the validator will incur a penalty (known as slashing penalty), which will be a percentage (or in certain occasions 100%) of the locked amount of cryptos. In such a case, the cryptos that you have locked may also be slashed as per the rules of the underlying blockchain.
4. How does CoinSwitch decide which crypto I can find on EARN?
A: CoinSwitch evaluates the slashing risk and source of rewards. However, CoinSwitch does not guarantee that the crypto selected by you in the EARN program will receive rewards or will not be subject to the slashing penalty.
5. Is my crypto safe?
A: Yes. Your crypto is 100% secured when you lock your holdings with the third-party validator of your choice on EARN, since you remain the beneficial owner of your holdings and your crypto stays in your CoinSwitch user account. However, cryptos locked-in the EARN program will remain subject to slashing penalty risk as explained above.
6. What is a validator? How do I choose a validator?
A: A validator is a participant in a Proof of Stake (PoS) blockchain network who is responsible for validating new transactions and maintaining the security of the blockchain.
Validators do this by locking in a certain number of cryptos to support the network by validating new transactions / blocks in the underlying blockchain.
After rigorous evaluation, we have approved reputed third-party validators like Figment and Blockdaemon. Key statistics of the validators like annual reward percentage and uptime are available on the app for you to make the right decision.
Selection of validators involved a high level of skill and understanding of how the underlying blockchain functions, how transactions are validated, what skills and infrastructure is required by the validators to undertake successful transaction validation. You should get yourself familiarized with these technical and procedural elements of blockchain and validation before you select the validator.
If you want to know more about the validators that we work with, please visit their website links below to do your own research -
Figment: https://figment.io/
Blockdaemon: https://www.blockdaemon.com/
Disclaimer: Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions.