A staking pool is a tool that allows multiple cryptocurrency holders to put their tokens into the pool, granting the staking pool operator a validator and rewarding all stakeholders in the form of tokens for the computing resources contributed .
The concept of staking pools is fairly unfamiliar to many cryptocurrency investors around the world, and investing in staking pools raises suspicions rather than attracting legions of investors. However, a proof-of-stake (PoS) model can be used on the blockchain and require stakeholders to lock their crypto tokens in a specific blockchain address or wallet in exchange for an annual yield (APY).
These locked tokens are associated with the development of their respective blockchains. In exchange, the blockchain offers stakeholders a percentage reward based on the number of tokens held through a public staking pool operator. While investing in a public staking pool, there are some important things to consider before holding a cryptocurrency, especially the staking pool model used.
Public staking pools are ideal for retail investors who want to participate in staking activities without the need to stake a large amount of tokens – tokens are required to become a blockchain network validator or to start a private staking pool. For Ethereum, an investor needs 32 ETH to become an independent validator, so any user can stake Ethereum (ETH) and earn rewards in the process.