What is crypto staking?
To participate in the operation of a blockchain-based proof-of-stake system, a stake is an activity in which a user locks his or holds funds in a cryptocurrency wallet. It’s similar to crypto mining because it helps a network reach consensus and rewards users who participate.
Staking gives you the ability to validate transactions. This is reflected in how many coins are “locked” within a wallet. Stakers can be incentivized to add transactions or find new blocks on a blockchain, much like they are mining on a PoW-based platform. Other than the incentives, PoS blockchain platforms can be scaled and offer high transaction speeds.
How crypto staking works
When you stake your crypto assets, it means that you are committing them to a blockchain in order to validate transactions and support the network. You will receive crypto rewards in return.
Only cryptocurrencies that use a proof of stake model to confirm transactions have this option. These cryptocurrencies use validators who have staked their crypto to process transactions. Validators verify transactions and add them to the blockchain. They then receive a reward for their contributions. Some cryptocurrencies use proof of stake as an example:
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- Ethereum (ETH).
- Cardano (ADA)
- Polkadot (DOT)
Although you can stake your crypto without the help of a staking company, it is not as simple. You will need to keep your crypto in a crypto wallet and join a staking pool. Staking platforms allow you to quickly stake your crypto. If you don’t feel comfortable with cryptocurrency storage, this is a great advantage.
It is worth noting that “staking”, which can be used to describe any way you earn rewards for your crypto, is often used as an umbrella term. Some people mistakenly refer to crypto lending programs with the same meaning as staking. Although they aren’t, crypto lending can be a great way to earn crypto rewards. We’ve added lending programs to our list of staking sites.
How to choose a crypto staking platform
Your choice of staking platform should be as important as your rewards. You could lose your staked coins and rewards if you make the wrong choice. These are the best ways to choose a staking platform.
- Don’t believe the founders or teams of DeFi platforms. This is especially true if you’re not a tech person. You can find out what other people think about the protocol by visiting Reddit or Twitter. Usually, developers can spot the possibility that there is a rug pull and alert the community if they find any code vulnerabilities or foul play.
- Don’t get caught up in APYs or annualized rewards. You should also consider the platform’s reputation and its age.
- Instead of putting your crypto assets at risk on fraudulent platforms such as Maker and Cool Wallet that promise high staking returns, it is better to stick with reputable platforms like Maker and Cool Wallet.
- To verify information on PoS-based platforms, use reliable analytics like CoinMarketCap. This applies to third-party staking services and staking-as-a-service platforms.
- Before you stake, make sure to read the rules and terms that govern the process. These rules include things such as whether the wallet must be connected to the internet 24 hours a day, whether staked crypto needs to be cooled before it can be unstaked, and what the minimum staking amount is.
Crypto Staking vs. Mining
It is common to believe that mining and stake are the same thing. These terms refer to different processes.
This is used in mining to confirm and verify new transactions on a particular blockchain network. Most cases require miners to install expensive hardware in specialized devices that consume large amounts of electricity. Miners can earn rewards for creating new tokens in exchange for their efforts. Bitcoin pays miners who are successful 6.25 BTC every ten minutes, for instance.
Importantly, mining, especially on popular networks such as Bitcoin, can be very costly. Staking is therefore more attractive. To stake cryptocurrency online, you don’t need to purchase any hardware or consume large amounts of electricity. It’s as simple as choosing the right crypto staking platform to meet your needs, depositing tokens and then enjoying your passively-earned income.
The best crypto staking platforms
We focused our search on a set of criteria when choosing the best crypto staking platform this year. This included metrics like the yields available, lock-up terms and the number supported tokens.
We looked into security to see if each platform has a license. What systems are in place for crypto staking?
Below are the results of our reviews on crypto staking platforms.
Uphold offers decent crypto options to stake and rewards compounding for maximum returns, which can reach as high as 19.5% annually.
Uphold allows you to stake ETH and ADA as well as SOL and XTZ.
Every week, you get staking rewards and can choose to not stake depending on which crypto asset you have.
To start stakestaking, Uphold requires a minimum of 4 days preparation. You pay a 15% commission on staking rewards as of the date of writing. This is already adjusted for the annual percentage yield.
Quint, a brand new crypto ecosystem, offers what we consider the best staking system of all existing platforms. Quint users have access to more than just staking pools. Quint refers to them as “super-staking” pools.
Quint offers two types of extremely high-stakes pools. First, there are the Luxury Raffles Pools. These pools offer prizes such as hotel stays, car rentals, and airline tickets. As more people stake QUINT tokens, Quint will offer greater prizes to this pool.
Quintessential Pools are the second type of super-staking pool. These pools provide guaranteed rewards such as free hotel stays, discounted airfares, supercar experiences and many more. The Quintessential Pools Rewards are given as NFTs which unlock the specified rewards.
Both super-staking pool types offer interest in QUINT tokens. Quint plans to offer a regular pool that offers higher interest rates to users who are interested in other crypto currencies. Quint currently offers up to 16.18% APY interest for rewards that are claimed in QUINT.
Additional benefits are available to QUINT token owners. Token holders get access to Quint’s exclusive Metaverse Arts Club, as well as access to the Quint marketplace to purchase custom merchandise. QUINT can also be used to purchase NFTs exclusive to Quint’s NFT marketplace.
Kraken’s staking reward is available for more than a dozen cryptocurrency. Some exceed 23% per annum, which is the highest among all the platforms reviewed by NerdWallet. Make sure to check the rate for the cryptocurrency that you are interested in using. High marks are also given to the service’s liquidity. To earn rewards, there is no minimum amount of time that you must stake your cryptocurrency. However, the more you stake, the greater your reward. Rewards are given out once or twice per week depending on which cryptocurrency is being used.
MyCointainer offers excellent automated staking and shared masternode stake services.
Masternodes are simply more valuable than regular nodes in a particular blockchain network. They have a higher stake and do different things and can earn higher rewards.
At the time of writing, the rewards that you receive are the sums you earn from masternode and regular staking. MyCointainer promises segregation in future updates.
MyCointainer, unlike other crypto platforms, is regulated by regional Financial Intelligence Units (FIU). You can also set up your own wallet and stake it through MyCointainer. This allows you to use your private keys which are arguably more secure than regular staking. This is a bit more complicated, but MyCointainer provides detailed guides to help you.
They also clearly disclose the fees associated with the stake of specific coins. MyCointainer allows you to earn compound interest on your rewards, which maximizes profits.
Coinbase offers a limited number of coins that can be staked and rewarded on its main platform. However, Coinbase wallet users have more options. This allows them to store crypto in their own custody. Five assets are available on the main platform with rewards as high as 5%. There are 26 assets available on the wallet service. The rewards range from the 10% to the 15% range. Pay attention to the terms regarding liquidity if you are staking on Coinbase. According to Coinbase, redemptions can take up to a few days and may not be possible “in rare circumstances”. The rates of rewards payouts depend on which asset you are staking and can vary from daily to quarterly.
|Staking Rewards on Cryptocurrency||Non-stablecoins up to 5%; stablecoins up to 2%|
|Min and Max Staking Amounts||Variable depending on the asset (no minimum for ETH).|
|Lock-In Period||Varies depending on asset|
|Security and Regulation Features||Regulated by SEC and listed at NASDAQ|
|Additional Rewards Available||Not confirmed|
|Payout Frequency||Variables – depending on the asset, daily to weekly|
Stake.Fish offers a non-custodial staking platform. They have detailed video guides that allow for delegation and run public validator nodes across many crypto networks.
Similar to the MyContainer platform, this is also possible. For a small fee, you can assign your crypto to a public validator node. They do the work for you.
Stake.Fish clearly outlines their service fees, expected rewards, bonding period and payout intervals for all staking projects.
Although they might not have the same click-staking solution as others in this list, it is still one of the best ways to stake from your crypto wallet. This is the only way to outsmart it. It requires substantial investments and technical knowledge.
This is a great place to start crypto staking if you are able to think beyond one-click solutions.
Crypto.com was founded in 2016, and it has grown to be one of the largest cryptocurrency exchanges worldwide, with millions of clients. Crypto.com is best known for its simple, low-cost exchange services that support more than 250+ tokens. However, it also offers a variety of other crypto-centric products.
Crypto.com offers digital asset loans, debit cards and crypto credit cards as well as NFT markets. It also offers staking services through its Crypto Earn facility. Crypto.com will provide capital loans to account holders who have deposited their chosen digital tokens. You will be notified daily of the interest rate and repayment terms by the end-borrower.
Three key factors will determine how much you get paid. First, APY rates can vary by token. Stablecoins like USDC or TrueGBP have an APY rate of 12% while Bitcoin and Ethereum have 6.5%. The second factor is whether you’re happy to keep your tokens locked up for a period of one, three, or six months or without any redemption clause. For more details read our Crypto.com credit card review.
Finally, if your CRO tokens, which is Crypto.com’s native digital asset, are staked, you can earn higher APYs. No matter which tokens or terms you choose to stake, your tokens can generate interest as Crypto.com lends out the funds. You will still be able to access a wide range of digital tokens by joining Crypto.com. These tokens can be purchased with your debit card at 2.99%. This platform is ideal for active traders.
|Staking Rewards on Cryptocurrency||Stablecoins, USDT, USDC and DAI, etc. – up to 14% / Other stablecoins, BTC, ETH CRO, LTC etc. – up to 14.5%|
|Min and Max Staking Amounts||Minimum – Varies depending on coin (e.g. 0.005 BTC, 0.15 ETH) / Maximum – $500,000 (USD equivalent)|
|Lock-In Period||Flexible – Three months, one month or customizable|
|Security and Regulation Features||NIST Cybersecurity Tier 4 Assessment / Stress-tested By Kudelski Security|
|Additional Rewards Available||As the staked CRO increases, APR rises|
eToro supports Cardano (ADA), and Tron (TRX), along with support for ETH staking only in certain countries.
For TRX and ADA, the minimum holding period is seven days.
eToro’s commissions on rewards are based upon the user’s club membership status. For example, the Bronze member pays the highest commission at 25%, while Diamond and Platinum+ members receive 10%.
To reap the maximum benefits, it is best to be a member of eToro in order to use this crypto staking platform.
For those who want to earn high rewards, Binance is the best platform for crypto staking. The popular exchange platform can support almost 100 different staking currencies, which allows for a wide variety of projects and APYs. Binance also offers a variety of options for locking your tokens. This usually covers a period between 10,30 and 60 days.
Moonbeam (GLMR), which is available for stake on Binance’s website, has a 10-day lock-up period and a very high yield of 239%. The APY for Solana and Shiba Inu is 8.78% (30 and 10.12% (10 respectively) at the time of writing. Binance will often show you that shorter lock-up periods are the best for highest yields.
Because rates are subject to change daily, you won’t be able to lock in promotional APYs longer than one month. We should also remember that every staking pool has an allocation limit, so it is possible that the best deals go quickly. Binance can be used to trade digital currencies once you have fulfilled your staking requirements. The platform has more than 1,000+ markets (60 US), and charges industry-leading fees.
Binance charges 0.10% per slide for trades. A fee of $1 is charged for every $1,000 traded. Binance’s crypto savings account is another top-rated feature. You will earn interest on the crypto assets you have not used by depositing funds. The specific APY rate you can access will depend on which cryptocurrency you use and the lock-up terms. Flexible savings accounts usually offer the lowest rates.
KuCoin offers flexible and soft-staking options. There is no hard lock period. To earn more rewards, however, you can subscribe to their fixed-length stake programs.
KuCoin’s soft stake programs have a redemption period. This is the time when you can stop staking to regain access or reward funds.
The 28-day redemption period for the Polkadot (DOT), for instance, is 28 days. Fret not. This is one of the most important redemption periods. Most other values are only available for a week.
No matter how low the stakes, there are certain minimum thresholds you must meet in order to stake.
KuCoin is an excellent crypto staking platform that’s user-friendly.
Benefits and Risks of crypto staking
Passive income generation – yields can be attractive or outright outrageous and can provide passive income catering for people with different risk appetites
Staking is simple and low-risk. Major exchanges now offer staking services. Staking does not require a large amount of money to start and is very energy-efficient.
Hacking/cyberattacks on the exchange or protocol are possible – this is why many crypto investors invest in hardware wallets. In volatile market conditions, there is also the possibility that the coin’s value could fall. You cannot liquidate your coins if they are locked up during the staking period.
If your validator nodes hold staked tokens, it may be punished if it fails to uphold 100% transaction processing uptime.
On-chain or Off-chain crypto staking?
It is important to know whether cryptocurrency staking will be initiated on-chain or offline. On-chain staking is the simplest form of cryptocurrency staking. You stake your tokens on the relevant blockchain network.
This will typically require you to download the whole blockchain ledger to your computer and then connect to a node using a supported wallet. This allows you to interact directly with the blockchain but on-chain stakes are best left for those who have a better understanding of cryptocurrency.
If you’re a beginner and want to keep things simple, an off-chain provider is better. The best staking platforms we reviewed today offer off-chain services. This means you don’t need any prior experience to get started.
This is because you are committing to the staking platform, not the blockchain network. Once you’ve decided on the staking platform and cryptocurrency you want, there is nothing else you need to do.
This comprehensive guide explains everything you need to know about crypto staking. This guide includes a list of the top crypto platforms in 2022, as well as which coins to consider.
We also discussed the risks and benefits of crypto staking and whether an on-chain or offchain agreement is better.
We found that Binance and Kraken are the most popular crypto staking platforms. eToro Staking, on the other hand, is a good choice for US users.