Staking Crypto Explained
Staking crypto is the new black in 2021. It saw a surge in popularity already last year, with heaps of enthusiastic minds trying to earn fixed interest or get rewards from farming.
The most recent massive shift towards staking crypto mainly happened because Ethereum officially welcomed staking in December 2020.
What is staking crypto and can I do it? Let’s get to it!
What is Staking Cryptocurrency?
Nicely and simply put, staking is holding or locking funds in a crypto wallet with the aim of maintaining the operations of a proof-of-stake-based blockchain system. Staking helps a blockchain network achieve consensus rewarding the participants, in which it is similar to mining.
Staking is a hit because it’s one of the smart ways to earn passive income. How to stake cryptocurrency? It couldn’t be simpler. A staker gets their rewards for just holding coins in their cold/private wallet or on a platform.
Also interested in how mining works? Learn more about how you can make money with mining bitcoin.
Proof of Stake aka PoS
If you’re struggling with understanding what proof-of-stake means, here’s a brief explanation.
The concept of Proof of Stake (PoS) literally translates to the following: a person can 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. It’s also worth noting that Proof of Stake was developed as an alternative to Proof of Work (PoW).
We encourage you to learn more about PoS and PoW by studying our educational article Cryptocurrency – Proof of Work vs Proof of Stake.
Last but not least, when looking for a staking coins list, you may often come across a term PoS coins, which, in fact, means the same as staking coins.
Where to Stake Crypto
Let’s 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
As can be guessed from the name staking-as-a-service platform, staking is the only option here.
Sounds great, but 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, please remember that you will need to keep staked coins in the same address.
Here’s why: moving the coins breaks the lock-up period. As a result, the staker loses their earned rewards.
Staking Through an Exchange
Staking through an exchange is a great way to monetize some of your funds. Let’s be real, staking crypto does come with a risk – and what doesn’t in the financial and fintech markets? – but it also helps to diversify your income flow.
Choosing an exchange to stake crypto is as important as when buying your first coins. That’s right, exchanges offer an array of services, which should be viewed as an advantage.
What Can be Staked?
We’ve been using the term staking crypto throughout the article, meaning that you can stake cryptocurrencies – that offer rewards.
What are the best staking coins? There are hundreds of options available, but here are just a few examples of the coins available for staking at CoinMetro:
Other widely popular options include NEO, Tezos, DASH, Stellar, EOS, and Cosmos (Atom). Feel free to check out a fuller PoS coin list – with over 300 options – here.
Staking with CoinMetro
CoinMetro is a fully-licensed innovative fintech ecosystem that brings novice and pro traders the best features and services in the crypto market.
We never stop working hard to be able to offer you variety and make crypto accessible for everyone. We believe that every new listing broadens your trading horizons.
Staking crypto is a hot topic this year, and we offer you an opportunity to get up to 5% annual staking reward for just holding coins on the CoinMetro platform.