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Staking (FAQ)

1. What is staking?

Staking is the way that certain cryptocurrencies validate transactions on the blockchain. These cryptocurrencies use “proof of stake” rather than “proof of work” to validate transactions. Staking allows you to potentially earn income on your Digital Currencies. Anyone with a minimum amount of these cryptocurrencies may validate transactions and earn “rewards” in return.

2. How does staking work in my Crypto IRA on the iTrustCapital platform?

When you hold Digital Currencies in your account on the iTrustCapital Platform you may be given the option to “stake” certain supported Digital Currencies (the “Supported Tokens”) in a third-party proof of stake network through staking services (the “Staking Services”) provided by iTrustCapital, an affiliate, or a third party (the “Staking Services Provider”). By participating in Staking Services, you choose to delegate an amount of Supported Tokens to the Staking Services Provider on the underlying blockchain network. In return, you may earn staking rewards. In order to participate in staking on the iTrustCapital platform, you must opt in during the relevant Enrollment Period, which will be presented to you via your iTrustCapital dashboard, and agree to the Staking Terms and Conditions, also available at https://itrustcapital.com/terms. You must choose the amount and type of Supported Token you wish to stake when you opt-in, and you will be notified of any warm-up or cool-down periods applicable to the Digital Currency that you stake in the disclaimers provided. iTrustCapital may require minimum or maximum amounts of staked tokens. Please read these disclaimers carefully. You will not earn rewards during any warm-up or cool-down period. Your staked Digital Currency will then be used to try to validate cryptocurrency transactions on the underlying blockchain. You will not be able to transact with the Digital Currency that has been delegated to staking during the Staking Period. The Staking Period is currently 90 days. At the end of the Staking Period, any rewards received by iTrustCapital will be allocated and distributed according to the amount of Staked Tokens that you committed to staking during the relevant Staking Period, less applicable fees.

3. How do I earn rewards from staking?

At the end of the Staking Period, any rewards earned by iTrustCapital will be allocated and distributed to those who have opted into staking during the relevant Staking Period, less any applicable fees, including the iTrustCapital 20% staking fee (your “Staking Reward’). Your Staking Rewards will be paid via your iTrustCapital account in the form of the Digital Currency that you staked.

4. What is the staking period?

The current Staking Period is 90 days.

5. Where can I see my staking rewards?

You may access the Staking Rewards you have earned by navigating to the Staking tab under History in your iTrustCapital Login dashboard on the App or website. You can also navigate to the History tab after you have opted into staking an asset.

6. Which assets are eligible to stake? Will there be a minimum staking amount?

The iTrustCapital platform currently supports staking services for Polkadot (DOT). We will be starting with a minimum of 5 DOT to stake.

7. Which assets can I stake right now?

The iTrustCapital platform currently supports staking services for Polkadot (DOT).

8. Does staking work the same way for all cryptocurrencies?

In general, staking works the same for all Digital Currencies, but each may be subject to different cool-down, warm-up, or other lockdown periods. Each Digital Currency or protocol contains specific rules. Regardless of differing warm-up or cool-down periods, the staking mechanism works the same.

9. When and how are staking rewards paid out?

Staking rewards are paid following the end of the relevant staking period and after rewards have been received by iTrustCapital.

10. What does “up to” mean for the Staking Reward?

You are not guaranteed to earn a staking reward. iTrustCapital does not guarantee any staking reward, any specific staking reward, or any staking return over time. The staking rewards return rate may move up or down depending on numerous factors. The staking rewards shown in the user interface is an annualized rate based on numerous factors, including but not limited to the protocol performance and iTrustCapital fees. The actual staking reward return, if any, may be different than the reward in the user interface.

11. What is a cool down or warm up period?

All Staked Tokens may be subject to warm-up and cool-down periods during which the Staked Tokens will not earn Staking Rewards. The length of the warm-up and cool-down periods vary per Digital Currency. The length of each period for each Digital Currency will be displayed on your user interface disclosure page. The APY displayed on your user interface for each Digital Currency incorporates the warm-up and cool-down periods.

12. Are there fees for earning staking rewards in my Crypto IRA at iTrustCapital?

iTrustCapital charges a 20% fee on rewards earned for a staked token. Additionally, a third-party staking services provider may charge staking fees to iTrustCapital. The fees will be deducted from your total earned rewards before being paid to you. The staking reward reflected on the user dashboard is an estimate of the reward that the client will receive at the end of the staking period.

13. How do I get started with staking?

Navigate to the Portfolio dashboard and click on the Staking tab. You must select the amount and type of cryptocurrency you wish to stake, read the disclaimers, and agree to all Staking Terms and Conditions.

14. Can I buy or sell my crypto while it's staked?

No, you cannot buy or sell your currently staked crypto assets until the Staking Period ends and your Staked Tokens are released from staking. You may continue to, buy, sell, or hold assets in your account that are NOT currently being staked.

15. Are my staking rewards taxed?

The tax treatment of certain cryptocurrency transactions is uncertain, and it is your responsibility to determine what taxes, if any, arise from these transactions. If you earn more than $600 in staking rewards, you will be provided a 1099-MISC. You are solely responsible for reporting and paying any applicable taxes arising from staking. iTrustCapital does not provide investment, legal, or tax advice. We recommend consulting a qualified investment, legal, or tax professional and that you conduct your own due diligence before making any investment decision including whether to participate in staking and related transactions.

16. Are my assets automatically re-staked when the staking period ends?

No, iTrustCapital currently does not automatically re-stake. You may choose to opt into the next Staking Period.

17. What are the fees?

iTrustCapital charges a 20% staking fee. The Staking Service Provider may charge additional fees. The Staking Reward reflected on the user dashboard is the best estimate of the reward that the client will receive at the end of the staking term.

18. What are the risks associated with staking?

Staking involves considerable risk. Please review the Staking Terms and Conditions and Risk Disclosures carefully. The risks summarized in the Staking Terms and Conditions are non-exhaustive and you should conduct your own due diligence on any particular Digital Currency before deciding whether to utilize the Staking Services in connection with that Digital Currency. iTrustCapital makes no recommendation whether to use the Staking Services, and it provides no investment or other advice in connection with your decision to use or not use the Staking Services. Rather, iTrustCapital merely provides the opportunity to use the Staking Services for a Supported Token. We recommend consulting a qualified investment, legal, or tax professional and that you conduct your own due diligence before making any investment decision including whether to participate in Staking Services and related transactions.