Crypto staking allows you to earn money with your assets locked or not for a certain period of time to contribute to a blockchain network.
How do you stake cryptocurrencies?
An investor can hold cryptocurrencies and lock them into a blockchain or lend them to a blockchain in exchange for a reward. This reward is usually paid in the form of tokens or tokens and can be fixed or variable. Staking is an option that is gaining a lot of popularity among investor groups, it is among the best tools for cryptocurrency returns because it allows you to generate passive income sometimes not negligible without any effort.
Crypto staking allows:
- Secure a blockchain network on the long term.
- Lending cryptocurrencies on platforms that will then lend them to people who want to borrow them.
On the other hand, you can’t bet just about every crypto. Those that support the Proof-of-Staking consensus protocol cannot be staked. Others, like Bitcoin, which have proof-of-work for transaction validation, do not allow crypto staking.
You also have to be mindful of fluctuating cryptocurrency prices as your staked crypto may fall during the staking contract. Or everything can be super positive, with your coin hitting never-before-imagined highs.
Staking cryptos: What are the best platforms?
A person who stakes is called a “staker“‘ and must have a certain number of tokens whose blockchain uses the “proof of stake” validation model. When the investor puts his cryptocurrency as collateral, he continues to own it. Here are the steps of staking in general:
Choose the cryptocurrency or currencies you are going to stake. It is also recommended here not to stake a single crypto but to diversify your investments as much as possible.
Choose a platform : using a platform like Binance or Kraken to delegate your staking is the easiest way to proceed. But be careful to compare the offers because the rewards for the same crypto can vary from one intermediary to another. Also be careful with the proposed staking mode namely fixed or fixed which imposes a determined holding period or flexible, which allows you to withdraw your assets whenever you want. Here, rewards or dividends are paid into your account every day.
Use a wallet : it is also possible to store a crypto using a wallet. Each crypto has its own native wallet or can be linked to several wallets. This solution offers a higher return but requires more action from the investor.
Using a stake box : Finally, it is also possible to become a validator of a currency based on the principle of proof of stake. But this approach has various limitations, including the fact that the number of validators is limited and that it is essential to store a certain number of tokens to hope to become a validator. Moreover, it requires an investment in specific equipment, a stake box which is a small box designed for this purpose.
Crypto staking : 5 best platforms in 2022
Cryptocurrency staking platforms allow crypto holders to earn a return and interest. It can be done through decentralized protocols or centralized platforms. Here are the 5 among the best staking platforms:
Despite a complex interface at first glance, Kraken accompanies users by presenting a clean and pragmatic platform accompanied by enhanced security, while maintaining competitive fees. Complete and intuitive, known and recognized, we recommend this dean of cryptocurrency platforms. Kraken allows the staking of 12 crypto assets with support for most crypto coins.
Binance is the largest crypto exchange in terms of daily trading volume. It is also one of the best crypto staking platforms supporting over 100 staking coins.
Binance has two types of staking: locked and flexible.
Binance’s locked-in staking typically holds our funds for at least 30 days, but a few coins allow a 10 or 15 day staking period. They often command a higher annualized percentage yield (APY) and are safer.
Bitbuy is establishing itself as the benchmark for crypto-currency trading in Canada. Since its acquisition, the platform has become part of the WonderFi Group, Canada’s leading employer in the crypto-currency industry. New features are expected to come soon.
Coinbase introduces an effortless staking solution aimed at vanilla crypto users.
For staking at Coinbase, you can purchase a crypto supported by staking at their exchange or transfer from any external crypto wallet to your Coinbase account. Thereafter, the staking is available on the specific assets page of your wallet.
This is by far the easiest, but also the most expensive, method of staking. The user agreement shows the commission charged by Coinbase.
YouHodler is a Swiss-based platform that offers a wide variety of financial services, from crypto-currency-backed loans with fiat currencies (such as USD, EUR or GBP) to stablecoin loans (such as USDT or USDC). It also allows conversions between cryptocurrencies and fiat currency, and between cryptocurrencies, being a well-recognized exchange in the market.
In terms of staking, with YouHodler, you can open high-yield crypto savings accounts. You can opt for fiat currency loans. For this, it is required to leave a certain amount of cryptocurrencies as collateral. In this case, if a loan of 1 BTC is granted, a % of the value of this BTC is generated but in fiat currency. If you want to withdraw or repay the money, this is done through a credit card.
Disclaimer : DYOR and Don’t invest more than you can afford to lose.