HomeGuideAll you need to know about Crypto Staking: Top exchanges for staking...

All you need to know about Crypto Staking: Top exchanges for staking crypto, which cryptocurrency to stake, and more

In the year is 2021, blockchain & cryptocurrency are two terms that most of our readers might have got familiar with. Reason? With Bitcoin touching new heights in its market value every other day, and the fact that entrepreneurs like Elon Musk back BTC (and of course, Dogecoin, which has become much more than a meme now). Today, more people are getting involved in dealing and trading cryptocurrencies of different kinds.

In that way, 2020’s fall in cryptocurrency was good for the ecosystem, as we started focusing on structuring new ways of managing crypto assets; the most well-known one is crypto staking. As the crypto industry grows, more people are staking crypto to earn a fixed interest as the number of miners on proof-of-work is starting to reduce. At this moment, there’s almost a billion dollars worth of crypto that is being staked in Kraken’s platform only, with a total of $128 billion being held by different DeFi platforms in the form of cryptocurrency. 

What is Crypto Staking?

Crypto staking is a practice where the user locks or freezes their crypto assets in a cryptocurrency wallet to maintain the operations of a proof-of-stake (PoS) blockchain system. It is similar to crypto mining as it is a reward mechanism where everyone who participates, gets something. The right to validate transactions depends on the numbers of coins that are locked inside the wallet. Similar to the proof-of-work (PoW) platform, stakers receive incentives for helping add transactions on a blockchain. These proof-of-stake platforms are pretty scalable with high transaction speeds.

Benefits of Crypto Staking

Several cryptocurrencies are converting themselves from a proof-of-work to a proof-of-stake platform, to become more energy efficient. These virtual currencies also signify those earlier nodes could mine blocks and get incentives for adding blocks to the ledger. Currently, nodes can add blocks and get incentives based on the number of cryptocurrencies present in one’s account. It’s a form of passive income that might add huge profits, making it a much better way of earning incentives in comparison to PoW-based mining.

Simply put, the benefits of crypto staking are enormous:

  • Eliminates the need for costly hardware that consumes a lot of energy
  • Makes it a more viable option for a larger fraction of the population as not everyone could afford costly hardware setup
  • Unlike other mining hardware, the value doesn’t depreciate over time
  • It is a more environmentally friendly and energy-efficient way

Platforms for cryptocurrency staking

Staking-as-a-Service platform is also becoming increasingly popular every day with the increasing use of proof-of-stake by cryptocurrency holders. These platforms enable investors to stake their stackable PoS assets via a third-party staking process. This aims to allow individuals who do not have enough knowledge about cryptocurrencies to stake their assets in these platforms. As these platforms reduce the technological complexity, they are often referred to as soft staking platforms. Some platforms for staking cryptocurrencies are:

Figment Networks

Founded in 2019, this Canadian staking as a service provider provides institutional-grade infrastructures and software for cryptocurrency holders. They have a staking fee of 0-15%.

MyContainer

This Estonia-based platform allows investors to soft stake a wide range of PoS coins through this easy-to-use online platform. One can stake cryptocurrencies like Phore, PinkCoin, Bitbay, and many more with a staking fee of 0-28%.

Stake Capital

France based staking as a service platform allows financial instruments and services on top of leading DeFi and staking networks.

Stake.Fish

This Korean crypto staking platform allows people to soft stake different stackable assets like Tezos and Livepeer with a 10-20% staking fee.

Stakinglab

Germany based staking platform is one of the leading platforms in Europe that allows users to soft stake and host masternodes for different stakable assets. 

Which Cryptocurrencies to Stake?

Different staking platforms allow staking different types of coins, but one should carefully choose which coin or coins they should stake to benefit them. The cryptocurrency should be chosen so that its value doesn’t depreciate over time, and is also a popularly used currency. While you can choose to stake almost all the cryptocurrencies, a few preferred staking currencies are as follows:

Tezos (XTZ)

Tezos aims to be staying in the cryptocurrency market for a very long time as they can easily deal with upgrades and developments. They also do not have to depend upon other currencies like Ethereum and others competing in similar market conditions. The average ROI for Tezos is thought to be around 5-6%.

VeChain (VET)

This is an Ethereum inspired cryptocurrency, and as the name suggests, it is mainly used in the enterprise and supply chain industries. VeChain has already launched its main net, where blockchain protocols are fully developed and deployed. VeChain is currently being used extensively in tracking products and shipments all over the world.

Neo (NEO)

This is often referred to as the Chinese Ethereum as it has formed the basis of some decentralized apps and services along with being a launchpad for different tokens. Neo had a massive rise at the start like other cryptocurrencies, but struggled a bit after that. However, the developers are working on gaining traction by introducing new features ever since.

Similar to VeChain, they are also trying to improve their decentralization feature and provide more additional nodes.

Cosmos (ATOM)

This is a new platform where startups can create their blockchain services with ease. They aim to reduce the chaos that is going on in this cryptocurrency market by bridging the different currencies so that they can speak with each other and co-exist together.

Conclusion

Crypto staking allows crypto owners to lock their currencies in a wallet and provide it to the proof-of-stake platforms to validate transactions. With such functionality made possible, miners and investors are now opening new avenues for investment and wealth creation using crypto as their platform. It seems more and more cryptocurrencies will offer this functionality (including Ethereum) in the future. It’s also evident that crypto staking platforms need to be widely available so that people can start taking advantage.

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