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If someone told you, you could earn easy money from your own money without doing anything with it, would you pass up the chance? Not many would! Cryptocurrency trading has been gaining much attention and momentum in the past few years. Trading in cryptocurrencies is the new favorite investment game for all those traders who love the volatility of the market and the risks that come with it.

Now, we are all familiar with cryptocurrencies and trading in them. Those active in trading are aware of the risks and the returns this non-regulated instrument can generate. Have you heard about staking these cryptocurrencies? Did you know you could just buy cryptocurrencies, let them just lie around, and earn well from it? Yes, you can! Read on to find out how and why people are leaning towards this mode of earning.

What Is Crypto Staking?

Staking pool concept

You stay invested in the market when you invest in shares or other financial instruments and just let them sit without trading. When you do the same with crypto, you are staking them.

Staking crypto is nothing but investing in permitted Crypto (only a few are accepted for staking) and holding them for a particular period. You can earn an income just by holding them. When you actively hold on to or lock up your crypto in your crypto wallet, you are staking the crypto and facilitating the consensus-taking process.

Where To Stake Crypto?

Now, if you want to start staking in crypto, how do you go about it? Where can you stake, and how should you stake without risking your investment?

Cryptocurrency is an unregulated market, which is highly volatile and involves many risks. Holding your crypto in such a volatile market instead of selling them when the rates are high is, in fact, a risk, and you need to be cautious about where and how you stake your crypto.

Many platforms support crypto staking. You cannot stake all cryptocurrencies. You can only stake those cryptos that have the option of staking. If you are looking for some reliable platforms to stake your crypto in, you can opt for one or all of the following:

  1. Etoro
  2. Huobi
  3. Binance  
  4. Coinbase
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CFDs are complex instruments and carry a high risk of losing money quickly through leverage. 75% of retail investor accounts lose money when trading CFDs from this provider.

Etoro

Etoro is a dedicated staking service provider that enables users to earn a good passive income for just holding their crypto assets. The network will execute the staking process on behalf of its stakers or investors.

eToro Staking

The rewards are in the form of cryptoassests. So, if a staker holds crypto assets with Etoro, their asset holding will grow in the same format. They need not worry about receiving rewards in other formats and converting them into cryptoassests. They can just let the stakes lie in the account like you let your savings lie in a savings bank account.

Etoro makes rewards payout every month. Absolutely no action is required from the stakers for these payouts. The staker invests their crypto assets with Etoro and executes the stake for them without any need for involvement. It is completely secure and hassle-free. Etoro will retain a small percentage of the stakes as a fee for executing and protecting the stakes.

Etoro has three classifications for a staker to opt from.

  • Bronze Club member
  • Silver, Gold, and Platinum Club member
  • Diamond and Platinum+ member

Etoro is consistent and transparent in its operations. It will send out daily snapshots of the stakes holdings. At the end of each month, these holdings are totaled and divided by the number of days in the month to arrive at the reward amount for the month.

Different cryptocurrencies have different staking intro days before they can start earning rewards. You can get these details on their website and then decide which Cryptocurrency will suit your needs the best.

*all trading involves risk

Huobi

It is a well-known fact that the crypto market is highly volatile and risky. The general market inflation and deflation can also impact these assets. Huobi is a secure staking network where you can stake PoS coins and prevent the depreciation of your assets due to inflation in the market.

Huobi allows you to stake and redeem any amount at any time without any hassle. It does not charge you any penalty or fee for the redemption. It is natural to worry about the safety of your assets if you have to park them in one network for an extended period. Huobi uses multiple sentry nodes, a powerful DDOs defense system, and an excellent security operation team to ensure the safety of your investments.

It is very easy to start staking with Huobi. All you have to do is:

  • Open a wallet with Huobi by following the steps and procedures given on their website
  • Choose your validator and then decide on the staking amount
  • Wait and collect your rewards at the end of the month

If you are keen on diversifying your crypto assets, Huobi facilitates that too. You can hold:

  1. ATOM for a yearly yield of 7% – 20%
  2. IOST for a yearly yield of 16.72%
  3. IRIS for a yearly yield of 14.62%
  4. LOOM for a yearly yield of 10%
  5. TRX for a yearly yield of 7.14%
  6. IoTex for a yearly yield of 7.02%
  7. Cardano for a yearly yield of 3.70%

Binance 

Binance is one of the world’s largest crypto exchanges that facilitate crypto staking. Using this platform is very easy as you just have to download the app onto your smartphone or any other compatible device, and you can start staking in no time.

Binance has a global community you can chat with, learn from, and discuss all your investment strategies, ideas, and other crypto-related topics. While your assets earn more and increase in value while they are parked in the crypto wallet, you can increase your crypto knowledge through this community.

The minimum requirement to start staking crypto on Binance varies from Cryptocurrency to Cryptocurrency. You don’t have to pay any fee for staking. The rewards are calculated and paid every month.

Coinbase

Coinbase also supports and facilitates staking in multiple cryptocurrencies. You need just a minimum of $1 to start staking on this network. You don’t have to pay any staking fee, and you also get a reward for signing up with this network.

If you are looking for more frequent payouts for your crypto staking, Coinbase could be a good option for you. You need a good platform to start your staking journey if you are new to crypto trading or staking crypto. You need more than just a secure network. It would be best if you had a place to learn more about staking and the nuances of crypto staking. Coinbase can provide you with the perfect educational resources.

How Does Crypto Staking Work?

Staking cryptocurrency

The number of coins or the size of your crypto stake is directly proportional to the chance of your holdings being selected. This means the more you stake and hold in your crypto wallet, the better the chances of your holdings being selected are.

Let’s break it down into simple steps for better understanding:

  • You will invest your money in the eligible crypto for staking as an investor.
  • You will then leave them in the crypto wallet.
  • The network or the platform will then use these holdings to forge new blocks on the Cryptocurrency blockchain.
  • Once new blocks are forged, information is written into them.
  • The network then uses the investor’s (yours and others’) holdings to validate the new blocks.
  • After validation is complete, the network will reward you and other stakers, allowing the network to use their coins and holdings for validation.

So, you will earn an income in the form of rewards from the crypto network for parking your investments in the crypto wallet so that they can use it for building their business.

*all trading involves risk

The Need For Stakes 

Cryptocurrencies use blockchain technology to verify and validate transactions. After the verification process, the information or data is stored on this blockchain which is tamper-proof and available for all to see.  

The validation of these transactions is called “proof-of-stake” or “proof-of-work.” Some individual investors will check and validate the transactions. They need to reach a consensus before the transaction can be verified and added to the blockchain.

For this consensus, they need participants. These participants need not actively verify or check anything. They just need to be present as investors. This is where the need for stakers arises. Stakers provide the holdings to mark a presence for the consensus-taking process.

So, the stakers indirectly approve the verification of blockchain transactions. The more such blocks added to the blockchain, the more visible the platform or network.

Benefit: Passive Income From Staking Cryptocurrency 

Crypto staking

Staking crypto is an easy method to earn passive income if you are not keen or experienced in trading with crypto. You can stay invested in this highly volatile market and get paid for it too.

All you will have to do is study the market a little to understand which coin to invest in. Once you decide on one or more coins, invest in them and let them just sit in your crypto wallet. You will get your rewards as your coins to help build the blockchain.

*all trading involves risk

How To Start Staking Cryptocurrencies

Many people put all their hard-earned money and savings into a savings account in a bank and forget about it for a while. While their money is locked up with the bank, the investor gets interested in the bank. This is essentially the bank paying the investor for letting it use its money for its business.

Staking crypto is very similar. However, it does not come without its own set of risks attached to it. The rewards are not standard and depend on your investing platform.

You can stark staking with the following crypto:

  • Ethereum
  • EOS
  • Tezos
  • Cosmos
  • Cardano
  • Polkadot

If you are new to this, follow these simple steps to get started:

  1. Choose – Choose the crypto you want to stake. You need to study the market and analyze it a little before you can go and lock up your money in one of the coins.
  2. Buy – Decide on how much you want to invest and buy the crypto accordingly. Many networks have a minimum requirement you need to meet to qualify as a staker. Find out the limit and invest accordingly.
  3. Get a Crypto Wallet – Next, download the software wallet for the particular crypto. You can do this by going into the network’s website and downloading the wallet provided.
  4. Choose a Reliable Hardware – You need an uninterrupted internet connection to stake crypto. Invest in a good connection. You can use a desktop to stay logged in or any other option suitable for you.
  5. Start Staking – You can start staking right away! The exchange will handle all the staking. As an investor, you simply need to hold your coins in your wallet.

What Not To Do In Cryptocurrency Staking

OK, so now you have decided to stake your money in the crypto market. It sounds very simple, doesn’t it? Well, yes, there is nothing very complicated about it, but you need to be cautious.

Here is a list of what you should not do:

  • Do not stake all your assets in one Cryptocurrency. Try to diversify your investment, maximize your earnings, and distribute your loss in case of market fluctuations
  • Read the terms and conditions carefully before signing up. Different platforms have different waiting periods before you can start earning rewards from your stakes.
  • Keep track of your payout dates to not miss out on any payments. Only then can you follow up with the network if needed.
  • Do not panic and withdraw your investments ahead of the expiry date. Many service providers may charge a penalty for closing or withdrawing your stakes early.

*all trading involves risk

Conclusion

Trading in the crypto market can be very rewarding if you are willing to wait and ride the wave when the market performs well. Staking your crypto assets is an easy way to earn passive income when you cannot actively trade in them. However, it would be best to be careful about the network you choose and the amount you stake in this highly volatile market. You can earn well through staking crypto with a little caution and patience.

FAQ

How does crypto stating work in terms of earning profits?

By allocating cryptocurrency in a staking pool participants receive staking rewards with time.

What cryptocurrency is most often used for staking?

Most staking pools accept Cardano, Ethereum, Bitcoin and BNB.