Introduction to Joining a Liquid Staking Pool

Joining a liquid staking pool on the Tangle Network is an attractive option for users who want to earn staking rewards without the technical complexities of running a validator. By contributing tokens to a pool, participants benefit from the collective staking efforts of the pool while maintaining liquidity through tokenized staking derivatives. This approach offers flexibility, accessibility, and an easy way to contribute to the network's security.

Benefits of Joining a Liquid Staking Pool

1. Liquidity While Earning

• Benefit: Unlike traditional staking where tokens are locked for a period of time, liquid staking allows participants to use tokenized derivatives, representing their staked assets, in other decentralized finance (DeFi) protocols.
• Impact: This allows users to participate in staking while still having liquidity for trading, lending, or other DeFi activities, maximizing the utility of their assets.

2. Pooling Resources for Better Returns

• Benefit: By joining a pool, participants combine their resources with others, potentially leading to better staking performance through validator selection and economies of scale.
• Impact: Pooling can increase overall staking efficiency, resulting in higher returns for individual participants as they share in the collective rewards.

Risks of Joining a Liquid Staking Pool

1. Validator Selection Risk

• Risk: The pool’s performance depends on the validators selected by the pool operator. Poor validator selection can lead to missed rewards or penalties such as slashing, which affects all participants in the pool.
• Mitigation: Choose pools with a strong track record and reliable operators to minimize this risk.

2. Dependence on Pool Management

• Risk: Participants rely on the pool operator to manage the pool effectively. Mismanagement, such as poor validator selection, excessive commission rates, or operational mistakes, can negatively impact returns.
• Mitigation: Review the pool’s commission rates and performance history before joining to ensure that the operator is trustworthy and competent.

3. Smart Contract and Network Risks

• Risk: Like all DeFi protocols, liquid staking pools may be exposed to smart contract vulnerabilities, bugs, or hacks that could result in the loss of staked assets.
• Mitigation: Use pools with audited smart contracts and robust security measures to reduce exposure to such risks.

How to Join a Liquid Staking Pool Using PolkadotJS

Joining a liquid staking pool on the Tangle Network using PolkadotJS is a simple process. Follow these steps:

Step 1: Access PolkadotJS Interface

• Open PolkadotJS Apps (opens in a new tab).
• Select the Tangle Network from the list of available networks in the top-left corner.

Step 2: Navigate to Staking Pools

• Click on the ChainState tab from the top menu.
• Scroll down to the Lst section where you will see the pools option to view all available pools.

Step 3: Choose a Pool

• Review the list of available staking pools, including details such as performance, commission rates, and validator selections.
• Select a pool that suits your preferences based on performance, operator reputation, and commission fees.

Step 4: Join the Pool

• After selecting a pool, click on Join Pool in Extrinsics tab.
• Enter the amount of tokens you wish to stake in the pool.
• Confirm the transaction by signing it with your wallet, and your tokens will be bonded to the pool.

Step 5: Confirmation

• You should have an equivalent amount of LST tokens in your account.