Guide to Staking Crypto in 2022
Staking crypto has been on the rise since 2020, with heaps of enthusiastic minds trying to earn fixed interest or get rewards from farming. What is staking crypto and how does staking crypto in 2022 work?
What is Staking Crypto?
Staking is a process of purchasing and holding or locking funds in a crypto wallet with the aim of maintaining operations of a Proof-of-Stake (PoS) blockchain system. In essence, a staker makes their crypto available for use in the PoS process.
PoS is a cryptocurrency consensus mechanism that allows a person to mine or validate block transactions according to how many coins they hold. In other words, the more coins a miner owns, the more mining power they have.
Staking helps a blockchain network achieve consensus rewarding the participants, which makes it similar to mining.
Staking crypto has been on the rise because it arguably is one of the smartest and easiest ways to earn passive income: a staker gets monthly or annual rewards for simply holding coins in their crypto wallet or on a platform.
Where to Stake Crypto
Where to stake crypto? Let us consider your options.
Staking is possible through exchanges, using a cold wallet – “cold staking” – and on staking-as-a-service platforms, also called “soft staking”.
Staking on Specialized Platforms
Crypto staking is the only option when it comes to specialized or staking-as-a-service platforms.
Also, you need to keep in mind that these platforms take a certain percentage of your earned rewards to cover their fees.
Staking Using a Cold Wallet
If you decide to stake using a cold wallet, remember that you will need to keep the coins locked for staking in the same address. Please keep in mind that moving the coins breaks the lock-up period. As a result, you will lose earned rewards.
Staking via Decentralized Money Market Protocol
With the rise of DeFi, decentralized money market protocols like Anchor now enable users to borrow and lend their on-chain crypto with just an internet connection.
Decentralized money market protocols operate as an on-chain code that is managed by a global community of stakeholders, without participation of any centralized entity. These protocols are an expanding use case of smart contracts, with significant amounts of money flowing through them.
Staking Through an Exchange
Staking through an exchange is a great way to monetize some of your funds and diversify your income flow.
Choosing an exchange to stake crypto is as important as when you bought your first coins. That’s right, exchanges typically offer an array of services, which should be viewed as an advantage.
What Can be Staked?
We have been using the term “staking crypto” throughout the article, meaning that you can stake cryptocurrencies – that offer rewards.
What are the best staking coins and tokens? There are hundreds of options available, but here are some examples of what is available for staking at Coinmetro:
- Terra (UST)
- Kadena (KDA)
- FluxNodes (FLUX)
Read: XCM Staking is Now LIVE!
Staking Crypto in 2022 with Coinmetro
Coinmetro is a fully-licensed innovative FinTech ecosystem that brings beginner and pro traders the best features and services in the crypto market. We never stop working hard to offer you variety and make crypto accessible for everyone.
Staking crypto is a popular topic, and we offer you an opportunity to get annual staking rewards for just holding coins on the Coinmetro platform.
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