If you’re thinking about investing in cryptocurrencies, there are a myriad of factors that you should take into account. When you invest in coins that are based on a proof of stake (PoS) blockchain network, you can engage in staking, which helps PoS networks operate more securely and efficiently. The only requirement for staking is that you keep coins in your cryptocurrency wallet over an extended period of time, which allows you to earn staking rewards. Staked coins are similar to interest-bearing savings accounts, since with both options you earn interest on your initial investment. The following guide lists some of the best staking coins you can invest in if you want to earn passive income.
What Is Crypto Staking?
Crypto staking is a process that involves placing funds into a digital wallet and keeping them there to support validating transactions for PoS blockchains. By participating in transaction validation, participants earn extra cryptocurrency.
The main benefits associated with staking crypto include the following:
- Crypto staking doesn’t require any extra equipment, unlike crypto mining.
- You can earn a certain amount of interest on your crypto holdings.
- Staking is substantially less harmful for the environment than mining.
- Staking directly enhances the efficiency and security of PoS blockchains.
There are some notable differences between mining and staking. In general, while mining only occurs with proof of work (PoW) systems, you’re able to get a return on both PoW and PoS coins on staking platforms.
Both PoW and PoS as consensus mechanisms are able to confirm blockchain transactions without needing a third party, such as a bank or other financial institution. The main difference between the two mechanisms is in their energy consumption.
If you’d like to get started with the staking process, you first need to obtain PoS coins. Once you’ve selected the coins you want to use, you’ll decide how much of your top staking coins you’d like to stake. This process can be done on any major cryptocurrency exchange.
Keep in mind that it’s also possible to earn additional income through yield farming. Although somewhat more complicated than staking, yield farming involves earning coins by lending your current crypto assets to various Decentralized Finance (DeFi) takes the decentralized concept of blockchain and applies it to the world of finance. Build... platforms. With yield farming, you can contribute crypto assets for anywhere from a couple of days to several months. Higher lending amounts invariably lead to higher rewards.
Risks of Staking
Despite the benefits of crypto staking for earning passive income, there are several risks to be aware of. The primary ones are as follows:
- Crypto prices are relatively volatile, which means they can depreciate quickly. In the event that your assets drop by a sizable amount, you may not earn enough interest to outweigh your losses.
- While it’s possible to “unstake” your crypto earnings, doing so can take at least seven days for certain platforms. Conversely, platforms like Bybit offer flexible staking which allows for instant withdrawals.
- If you want to use some of the top staking coins, it’s important to understand that these coins will remain locked for a short period of time. This means that nothing else can be done with these assets in the interim.
What Are the Best Coins to Stake?
The following is a comprehensive look at 19 of the best staking coins you can purchase in order to start obtaining staking rewards. The tokens’ symbols are listed after each crypto platform.
With big-name backers like Peter Thiel and Pantera Capital, investors can be confident in BIT being one of the next big exchange tokens. As one of the world’s largest decentralized autonomous organizations (DAOs), BitDAO seeks to nurture the DeFi space in achieving its vision of open finance and a decentralized, tokenized economy. BIT token holders can shape the future of BitDAO through voting on governance proposals, such as updates to core protocols and token swaps.
To begin staking, join the Bybit Launchpool. After signing up on Bybit and completing Level 1 KYC, simply transfer BIT into your ByFi account and begin the staking process. With a prize pool of 1,500,000 BIT tokens and an average annual return of 14.77%, you’ll certainly be hard pressed to find similar staking coins with comparable growth potential and staking rewards.
If you’re wary of your staked tokens and coins depreciating in value, try staking a stablecoin instead. While deciding which stablecoin is the best staking coin comes down to personal preference, we’re recommending Tether (USDT) thanks to its massive trading volume. This can do wonders for liquidity as the high daily USDT volume lets you effortlessly swap out USDT for more lucrative tokens.
Keen on giving USDT staking a go? Take advantage of ByFi flexible staking and enjoy average annual rates up to 3.5%. Thanks to the stability of USDT’s overall value, we certainly consider it as one of the best staking coins for beginners getting into staking and want to use a platform that offers instant withdrawals and little hassle.
Ethereum 2.0 (ETH)
Ethereum 2.0, or Eth2, is the second-most popular cryptocurrency provider in the world behind Bitcoin, and is one of the best staking coins available. If you want to stake this particular crypto, you’ll need to start with at least 32 ETH. Ethereum previously used a PoW consensus algorithm. However, it has recently switched over to PoS, with more than $12 billion in ETH having been staked.
Before you start staking Ethereum 2.0, keep in mind that it’s in an early access phase, which means that the platform is still being tested before it officially launches. Until the 2.0 launch occurs, the coins you stake will remain in the network. It’s estimated that the Eth2 will launch in the first few months of 2022. With ByFi’s flexible staking rates, you can expect to earn a steady 2.5% APY so why not earn some passive returns while you’re HODLing the coin with one of the best smart contract networks.
USD Coin (USDC)
Confused by comparisons of USDT vs USDC? You’re not alone. Just like Tether, USD Coin (USDC) is also a stablecoin that’s backed by fiat money and is commonly used for transferring of funds because of its stable value and high liquidity. Fortunately, unlike Tether, USDC is properly audited by Grant Thornton, LLP on a monthly basis. This allows for maximum transparency as the reports are posted online for all to view, thus proving its claim that it’s backed mostly by cash and cash equivalents.
Start staking USDC and earn attractive rates thanks to ByFi’s flexible staking offerings. With average returns up to 8.88%, there’s no better choice when it comes to the best staking coins that offer a stable value and full transparency of how the stablecoin is pegged to the dollar. This passive investment is made even better thanks to our flexible staking mechanism where you can freely unstake at any time should you need the capital.
Terra is among the best crypto staking coins because investing in their LUNA coins is easy. Terra facilitates the creation of a stablecoin backed by cryptocurrency, referred to as TerraUSD (UST). To invest in this highly recommended coin, you can exchange a single UST for one dollar’s equivalent of LUNA.
In the event that the UST price ever drops below one USD, it’s possible to swap affordable UST for $1 of LUNA, which allows you to obtain a profit and earn passive income. The annual staking reward for LUNA is around 12.10%, a substantial return which makes this one of the best cryptos to stake. When you’re ready to purchase LUNA and start staking, you can find it at crypto exchanges such as Binance.
Polkadot provides one of the best staking coins because it uses scalable, multi-chain technology created by Ethereum cofounder Gavin Wood.The minimum stake to start earning rewards is currently 40 DOT, or around $1,600 at the time of writing. (However, if you want to create a validator node with Polkadot, your contribution will have to be substantially larger at 350 DOT.)
Polkadot is among the best staking coins because it comes with an average annual return of 14%, which is great for earning passive income. You can stake DOT at exchanges including Binance, Kraken and Fearless Wallet. As for future prospects, DOT is among the best cryptos to stake because of its top 10 The market capitalization (or market cap) of a cryptocurrency is a measurement of its market value. In other words, it..., which will likely grow in the coming years.
Tezos is distinguished by using a liquid proof of stake (LPoS) model featuring optional delegation. Tezos uses the XTZ cryptocurrency, which is created by a “baking” process. If you become a “baker” with Tezos, you’ll receive substantial rewards when you stake your XTZ coins because you’ll be helping new blocks of transactions to be validated.
You can start staking with Tezos even if you only have one XTZ in your wallet. Your initial reward payments will be credited to you after a period of 35–40 days,, but subsequent payments are awarded every three days. Tezos rewards are largely consistent, which is why XTZ is considered to be one of the best crypto staking coins. Your average annual reward can be anywhere from 6.75–10.60%.
Polygon is a unique staking coin that was created in an attempt to scale Ethereum. The purpose of Polygon is to ensure compatibility by connecting every Ethereum-based DApp (decentralized application). Polygon transactions are wholly secured by network validators. This is among the best staking coins to select from, because it’s able to validate up to 65,000 Transactions per second (TPS) is the number of transactions a blockchain network can process each second or the number o... (TPS), which allows Ethereum networks to complete transactions efficiently.
Another reason Polygon is one of the best staking cryptos is that delegators are only required to stake a single coin before they can take part in the network, while staking itself requires at least two coins. You can begin staking by connecting your MetaMask wallet to your Polygon wallet. The expected annual staking reward for Polygon depends on how many coins you stake. The maximum APY for this coin is just over 14%.
Binance is the most popular crypto exchange platform in the world, and BNB is one of the world’s top staking coins, due to the manner in which it’s delegated. There’s currently no minimum stake for delegating the BNB coin to validators, and the “unstaking” process takes just seven days.
The average annual return for the BNB coin is between 6–9%. However, it’s possible to earn returns that are as high as 30%. The rate of return can be highly volatile because it depends on transaction fees. You can stake this coin directly on the Binance platform, which offers a level of convenience that isn’t possible with most of the top staking coins on this list.
Hydra is among the more unique staking coins on this list because of how it combines deflationary and inflationary mechanics. With this methodology, it’s possible for Hydra to burn nearly 100% of its transaction fees while maintaining inflationary block rewards. The end result is that users are protected against price degradation.
If you’re interested in staking with HYDRA, it’s important to understand that any user can become a node in the Hydra ecosystem. You need at least 10 HYDRA coins in your wallet if you want to start staking. Hydra has become one of the best PoS coins because all early stakers will receive a huge rate of return at 60%. This will eventually wean down to 20% over time. The staking rewards you receive are derived from transaction fees, and any new HYDRA coins are issued directly by its blockchain.
Algorand is a powerful platform that provides effective scalability through validator nodes and instant transactions. ALGO is among the best staking coins because stakers only need to have a single ALGO coin to become validators. Having such a low staking minimum does have its pros and cons. While there are typically more validators than most other networks have, it’s also possible that some validators don’t participate as much as they should because of the minimum staking requirement.
With ALGO, you can begin the staking process using a Ledger wallet, Algorand wallet or Coinbase. Your total returns depend on the staking platform you decide to use. In general, you can expect annual returns that range from 5–10% of your total investment.
Interested in the best staking coin with a novelty? PancakeSwap is a fun and popular staking platform that provides users with the ability to stake any CAKE coins they accrue. When you stake your CAKE coins, you can choose to earn additional CAKE or other types of coins. At the moment, PancakeSwap is the most popular platform on the Binance Smart Chain, which is just one reason why CAKE is considered to be among the best staking cryptos.
To stake CAKE, you’ll first need to connect your wallet to the PancakeSwap platform. Supported wallets include MetaMask, Trust Wallet, MathWallet, TokenPocket and Binance Chain Wallet. In comparison to platforms like Ethereum, transaction fees are considerably lower with Binance Smart Chain. Once you’ve obtained rewards on PancakeSwap, you can either claim them or reinvest them into the platform. The annual returns for the CAKE coin range from 31–42%, which makes this one of the best crypto staking coins on the market.
Solana is an efficient blockchain that was designed with scalability in mind. This scalability is achieved via Solana’s low fees and quick transactions. When it comes to crypto market caps, Solana ranks #7. SOL is one of the best staking coins because of the speed of transactions and the low cost for completing them. Most transactions are finished in a few seconds. While you can’t manage your own node when staking on the Solana network, there are more than 640 validators with whom you can stake your coins.
When you delegate your stake to validators on Solana, you’ll be able to participate in the rewards that these individuals receive. SOL coins have performed extremely well over the past few months, reaching an All-time-high or ATH means the highest ever price of an asset. This term has been used in traditional financial markets,... of $210 per coin. When you stake your coins with Solana, you can expect to receive annual returns ranging from 7–11%. You can stake SOL with Ledger, MathWallet, Atomic Wallet and Exodus.
Avalanche is similar to platforms like Cosmos and Polkadot. However, AVAX is one of the best staking coins because its platform is able to scale to millions of different validators. You can start staking with the AVAX platform once you have at least 25 AVAX coins.
To become a validator, you’ll need to stake at least 2,000 coins. Once you stake your assets, you’ll need to do so for at least two weeks before you claim your rewards. AVAX has proven to be among the best cryptos to stake, with an annual return on investment from 8–14%. You can stake your AVAX coins with a number of different wallets, the primary ones being Ledger, MetaMask and Avalanche Wallet.
ApeSwap Finance (BANANA)
ApeSwap Finance is a popular platform that provides users with the ability to stake the BANANA coins they earn. Thanks to its meme status that capitalizes on the bullish retail investor movement, BANANA has become one of the best PoS coins. Once you’ve purchased BANANA coins, you can stake them along with other digital assets in various pools.
After you’ve staked your BANANA holdings, you can choose to earn more of the BANANA coin or other cryptocurrencies. Some of the pools you can stake your coins with include BFTl, Banana, JDI and Ontology. All you need to do to begin staking your tokens is to click the ”Add” button. Over time, you’ll earn staking rewards that can be harvested after the mandatory timelock. With an average annual return of 75% on ApeSwap that will fall over time, there’s no better time to get to yield farming than the present.
SushiSwap is a great platform that offers both staking and yielding. However, many investors choose to stake their SUSHI coins because of the high annual returns. You can obtain SUSHI coins on popular exchanges like Binance, Huobi and OKEx. Once you decide to stake SUSHI coins, you can do so with wallets such as MetaMask and Atomic Wallet.
If you decide to stake SUSHI coins, the returns you generate can be used for voting rights, or as a token that allows you to interact with other platforms. The returns generated from SushiSwap staking investments are largely consistent, typically ranging from 7–10%.
Chronicle is a highly popular NFT and cryptocurrency marketplace that provides users with the opportunity to stake their coins for voting and governance rights as well as staking rewards. XNL is considered to be one of the best staking coins because it has a very high annual return of 67%.
Keep in mind, however, that this high APR isn’t unlimited. The soft cap for a single user is set at 50 coins while the hard cap is 100,000 coins.Users can claim rewards every three days. Chronicle supports the most popular wallets, primarily MetaMask.
Cardano is a powerful PoS network that’s commonly compared to Ethereum. The main advantage of using the Cardano network is that it can process several hundred transactions per second. Cardano earned its spot on this list as one of the best staking coins because users can pull out any of their staked assets whenever they like. If you’re new to the staking process, this is a highly accessible platform.
Of particular note with Cardano is that staking rewards become less valuable over time if too many individuals place their assets in a single pool. As such, diversification is essential toward maximizing your returns. Cardano has two official wallets, Yoroi and Daedalus. The average annual return for ADA is 5–9%.
Akash is a decentralized open-source cloud network that’s known for being low-cost, quick and efficient. Keplr is the primary wallet supported by the Akash platform. Staking with Akash is simple and straightforward. Once you’ve purchased some AKT on BitMart or a similar exchange, all you need to do is choose the validator you’d like to stake your assets with.
You can then decide the amount of AKT you want to delegate. The AKT APY is currently set at 34.20%, which is among the highest around. However, the staking rewards don’t automatically compound. As such, it’s highly recommended that you manually withdraw your rewards and stake more coins on a regular basis if you want to take advantage of the high APY.
The Bottom Line
Staking your coins on a PoS blockchain network is a great way to earn passive income and generate high returns. These investments come with very little risk, and can pay dividends if you withdraw your rewards at the right time. With this guide in hand, you should have everything you need to begin the staking process.