Is There a High Risk in ImToken Staking and Mining?
As one of the first Web3 wallets, imToken is dedicated to building the Ethereum ecosystem. With its latest update, imToken now fully supports key generation on the beacon chain and staking-as-a-service custody with InfStones.
Users can now also choose to withdraw their staked ETH (rETH) from the staking bar. This upgrade further maximizes user ownership and control of their assets.
The security of users’ assets is the most important concern for any staking wallet. It is crucial to use a wallet that is secure and offers a variety of features. There are several different staking wallets available, but the best one is Trezor, which offers the highest level of security and allows you to store your coins safely.
A user’s mnemonic phrase is the only way to retrieve their staked ETH and earnings at the consensus layer, so it is important to back up the phrase securely. Scammers may trick users to enter their mnemonic password in a malicious website and gain the ability to steal their assets. This is why imToken’s latest version has optimized risk warnings to warn users of these types of scams.
Another issue with staking is that some of the profits earned from staking may go down due to a lack of proper management of the funds by the validators or due to unreliable services. It is also important to diversify your holdings in order to minimize the impact of any losses. This can be done by transferring tokens between different staking wallets, as well as by trading on the built-in exchange on imToken, which is supported by Kyber Network and 0x. The exchange can be accessed from the app and is free of charge.
The crypto market is very volatile, which means the value of tokens can rise and fall in a short period. This can impact your investment when you participate in staking and mining as the cryptos staked could lose their value. It is therefore essential to only stake what you can afford to lose and not invest in staking pools with high yields.
Another risk is that the amount of rewards you earn from staking may drop because the total number of ETH in the staking pool can decrease due to a change in the price of the staking coin or other reasons. However, since imToken enables you to participate in staking as a custodial service provider with InfStones, we prioritize the security of your assets and minimize the risks of Slash penalties that affect your rewards.
As a digital wallet ecosystem company, imToken has made significant progress in expanding the blockchain community with its incubated projects and decentralized exchanges (DEXs). In addition to a variety of digital asset management products, the company offers free non-custodial cryptocurrency staking and mining services for its 12 million users globally. Its comprehensive risk control system safeguards your token investments and supports hardware wallets and cold storage to keep private keys offline, preventing cyber attacks. It also has a built-in DApp browser that gives you seamless access to a wide range of decentralized applications on several blockchain networks.
In many countries, staking rewards are treated as income and may be taxed according to your country’s specific laws and rates. In general, it’s important to consider your tax obligations before deciding whether or not staking is right for you.
The IRS has not issued explicit guidance on how to treat staking rewards, but most tax experts believe they will be taxed similarly to mining rewards. This means you will likely have to report them as income on your tax return based on the value of your coins at the time you receive them in your wallet. If you sell or trade your staked coins in the future, you will incur a capital gain or loss based on how much the price of your cryptocurrency has changed since you received the reward.
Keeping track of the USD value of your staked assets is essential for reporting on these transactions. You will need to know the fair market value of your staked coins at the time of receipt, as well as your cost basis (i.e. how much it cost you to acquire your staked assets). Using crypto tax software explicitly designed for staking can help simplify this process and ensure that you stay compliant with your taxes.
Scammers impersonating imToken officials often chat with investors on Telegram, WhatsApp, and Youtube and offer them unlimited staking allowance in exchange for USDT deposits. This is a clear sign of a scam and should be avoided at all costs.
Staking a certain amount of ETH earns you rewards every day, but there is always the possibility that your assets will be stolen by phishing attacks or hacking attempts. To help you stay safe, the imToken team has optimized a risk warning that will appear when you authorize transfer authorization from the wallet.
Besides staking, you can also invest your staking earnings to a higher return rate by using the COSMOS wallet’s staking interface and reinvesting the earned rewards back into the staking pool. The staking interface will display your current stETH balance, stETH earned and the reward rate in real-time.
The staking interface in the COSMOS wallet also displays your validator node on the Ethereum consensus layer. This allows you to see if your validator node is offline or has been slashed. If you do not want to take the responsibility of validator node operation and maintenance, you can also choose a non-custodial staking service with the help of the imToken team’s partner, InfStones. This solution separates signing and withdrawal keys and ensures that you are in control of your assets while professional service providers manage the staking pool and node.
When staking, remember to store your mnemonic in an encrypted wallet or private key storage method. This will prevent attackers from stealing your assets even if they know your wallet password. You can store your mnemonic in a third-party risk wallet, WeChat, memo, folder, computer or USB stick to keep it secure.