Cold Staking is not related to Proof of Stake or a consensus mechanism. Cold stakers have no rights in generating blocks or confirming transactions. They receive interest for holding their coins. Think about cold staking as a form of passive income on your investment.
The Callisto cold staking protocol is written in Solidity, a smart contract programming language. The cold staking contract receives 20% of all mining rewards per block and distributes this amount among cold stakers in direct proportion to their stake.
The reward for each staker is calculated at the moment of reward claiming.
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After the Callisto owner has deposited their coins into the staking contract, the funds are locked for a certain period of time (approximately 27 days).
The cold staker cannot access their funds during the locking period.
The longer a staker “stakes”, the higher the reward will be.
After the locking period expires, there are three options for the cold staker: (1) claim the reward and continue staking, thus locking their funds for another month. (2) claim the reward and withdraw their entire stake, or (3) Do nothing.
When a staker does nothing for a certain amount of time (2 years) after the locking period has ended, then they are considered inactive and are removed from the staking contract. The inactive stake is returned to the stakers address. No reward shall be paid to inactive stakers.
Each staker can independently claim their reward at any time after the locking period. The staking reward depends on the total amount of CLO that is currently in the cold staking contract. As a result, each staker's reward depends on other stakers' stakes.
There is no minimum staking amount.
A cold staker can only stake with their own deposit address. It is not possible to send rewards to someone else's address, or grant someone permission to claim the reward on your behalf.
A cold staker does not need to run a node to stake. They only need to invoke the staking contract twice: once to make a deposit and again to claim the reward. The ClassicEtherWallet is sufficient for this procedure.
To participate in cold staking, a user must:
Send CLO to staking contract
Wait 27 days or longer
Invoke the claim function of the staking contract to earn the reward