What is Validator-as-a-Service (VaaS)? A Simple Staking Approach for Passive Income

What is Validator-as-a-Service (VaaS)? A Simple Staking Approach for Passive Income


The move from the Proof-of-Work to Proof-of-Stake consensus mechanism by the Ethereum network creates an attractive earning economy for cryptocurrency investors. Today, over 60% of the blockchain deployed in the ecosystem uses the Proof-of-Stake (PoS)/Delegated Proof-of-Stake (DPoS) consensus mechanism to verify and validate cryptocurrency transactions.
While this approach is considered an energy-efficient and less expensive approach, the truth is that it relies on validators and validator nodes to operate efficiently. Validators are required to maintain the security of the PoS and DPoS network by verifying crypto transactions, validating them, sending them to the blockchain for finalization, and adding blocks containing each transaction data to the blockchain for record-keeping. Validators are then rewarded for performing these tasks or penalized when they act maliciously or in a way that compromises the network security.
Aside from the penalty, being a validator requires the complex task of running validator nodes, making it almost impossible for less technical blockchain users to participate in the validator network even when they have the capacity of investment needed. This is where working with Validator-as-a-Service Providers like Chainnodes offers investors a system that can be leveraged to earn passive rewards.

What is Validator-as-s-Service (VaaS)?
Validator-as-a-Service is a customized solution provided by specialized protocols that manage the technical and operational aspects of running validator nodes for users with less technical knowledge. With VaaS, users essentially delegate the duty of running validator nodes on any Pos/DPoS network to service providers. At the same time, they retain the ownership of their staked assets and earn rewards for running the nodes.
It is also considered a less expensive approach to running a validator node, as users are not required to run a node independently.

5 Simple Steps to Set Up Staking with Chainnodes (a Validator-as-a-Service Provider)

Step 1: Choose a Blockchain Network

  • Start by selecting the blockchain network of your choice, keeping in mind the available Pos/DPos on Chainnodes and the minimum staking requirement for each.

Step 2: Select a Staking Service Provider

  • Chainnodes provides an array of staking service protocols from which to choose. Essentially, these protocols reduce the entry requirement barrier by lowering the minimum staking requirement. For instance, Etherfi requires only 2 ETH.
  • When choosing a protocol, it is also essential to confirm minimum requirements, applicable fees, and uptime guarantees.

Step 3: Connect your crypto wallet

  • Set up a cryptocurrency wallet that is convertible to the blockchain of your choice. Choosing a multichain wallet like Metamask allows you to connect any blockchain of your choice. However, for blockchains that are not supported on Metamask, you may have to get the right wallet.
  • After setup, fund your wallet with the native token of the blockchain you selected and connect your wallet to the platform. Ensure that you are on the right platform before connecting your wallet to prevent loss of assets.
  • Delegate the desired amount of token (this can be higher than the minimum requirement) to the validator.

Step 4: Monitor your rewards

  • Once you delegate your tokens, you have a dashboard to access. This is where you monitor the validator’s operation, uptime management, and reward distribution.
  • Depending on the platform, the reward may be automatically sent to your dashboard, or you may be required to claim it periodically.

Step 5: Manage your Staking

  • Delegating your token essentially means staking it on the platform, and this usually comes with a staking period. Be aware of the staking period to know when to unstake.
  • During the unstaking period, you can access your token, and you can decide to either re-stake it using the same protocol or move it to a different one.

Using the Validator-as-a-Service offer provided by Chainnodes not only removes the technical barrier of running a validator node it also removes the entry barrier for investors with low assets. Instead of running the node independently, you are essentially working with a Node-as-a-Service provider who runs the validator nodes on your behalf. Instead of staking 32 ETH directly, you can now stake as low as 2 ETH to get started.
Ready to leave behind the headache of managing validator nodes or the enormous financial commitment that comes with staking directly? Get started on Chainnodes.