Staking is probably the best way to earn passive cryptocurrency without really having to do much.
Staking is a consensus method where users are picked “randomly” to validate blocks and keep the blockchain secure. In order to be randomly selected, you must lock your tokens to prove that you are trustworthy, since any funny business can cost you a percent of your tokens.
Holders are encouraged to stake their coins to validate blocks in order to receive rewards in the form of the blockchain’s cryptocurrency.
Staking is seen as a better method than
proof of work because it uses less energy, which limits its impact on the environment and is cheaper for the “miners” validating the blocks.
It’s also extremely easy to set up since, for the most part, it requires no additional hardware on your end, meaning just about anyone can stake and earn passive crypto.
It’s a little bit like putting your money in a savings account and watching it grow over time, except it’s growing in crypto!
Let’s take a look at our favorite cryptocurrencies to stake in 2022.
Algorand ($ALGO)
Algorand is a blockchain network that provides both a digital currency and a platform for developers to build apps on. Its main focus is scalability, security, speed, and is considered one of the
best coins for the environment.
Coinbase is the easiest way to stake your ALGO since all you have to do is hold the coin on your account. Coinbase offers a 5.75% APY on ALGO and they pay out according to the governance schedule, which is about once a quarter. About 1,000 ALGO would net you around 58 new ALGO per year on Coinbase.
Binance, another popular exchange, allows you to stake your ALGO and offers about 4.5% APY. Binance is available in many different countries, so this could be a better option for you depending on where you are in the world.
You could also join the governance program, which not only allows you to gain rewards, but also allows you to participate in the future of Algorand! If you are a governor, then you can vote on changes to the project. You can only sign up during certain times, so be sure to look out. Once you are ready to sign up, you just have to connect a wallet like Pero Wallet or My Algo Wallet. Rewards from governance can range, but are likely to be about 7% APY.
Cardano ($ADA)
Cardano is a platform that allows development of decentralized apps that use smart contracts.
There are a few different places where you can stake ADA.
Coinbase is probably the easiest way to stake your ADA, especially if you are not gifted in the technical area. For Coinbase, all you have to do is have some ADA in your wallet, and turn on staking. You will receive about 2.60% APY staking Cardano on Coinbase. That means if you hold 1,000 ADA, you will receive about 26 ADA after a year.
Daedalus is another method of staking your Cardano where you will join a staking pool. A staking pool is where everyone combines their tokens in order to have a better chance of being selected and earning a reward. This method does require a little knowledge, but is relatively easy to do. On Daedalus, you will earn around 5% APY, so 1,000 ADA will net you roughly 51 additional ADA after a year.
You can follow our
tutorial on how to stake Cardano on Daedalus easily.
Yoroi is a third place to stake your ADA. Again, you will be joining a mining pool in order to have a better chance to receive some rewards. With Yoroi, you will earn 4.62% APY, giving that 1,000 ADA stake another 47 coins after a year.
Gemini Dollar ($GUSD)
Gemini Dollar is a stablecoin issued by the Gemini exchange backed by the U.S. Dollar. It should always maintain its peg since it can only be created when bought with dollars and is destroyed when sold for dollars.
Since Gemini Dollar is issued by the Gemini, you can easily stake it through their exchange. The entire process can be done with the Gemini mobile app. Just purchase some Gemini Dollar and transfer the balance under the Earn tab. Gemini Dollar offers a 6.9% APY, which is far higher than any traditional savings account is offering.
If you
sign up to Gemini using this link you can earn $10 in Bitcoin just by normally investing.
Ethereum ($ETH)
Ethereum is a platform that allows developers to create dApps that make use of smart contracts. Ethereum is the second largest cryptocurrency by market cap.
You can stake Ethereum in a few different places.
Coinbase is a great place to stake your ETH since you can trade it whenever you want while staking. It’s also easy to set up because all you have to do is hold the crypto and adjust a setting. Coinbase offers 3.675% APR on your ETH.
Gemini is another exchange that you can stake your ETH on. It’s easy to set up and if you are holding ETH here already it would be worth it, but Gemini only gives around 1.26% APY for staking Ethereum.
You can also stake your ETH on the exchange, Kraken. Kraken is one of the better echanges to stake on because it offers a 5% APY on ETH. On Kraken you ETH will be unusable for about 20 days before it actually starts to earn.
If you are one of the lucky ones with 32 ETH you can set up your own validator with a wallet like Argent. As a validator you have the chance to gain more rewards as you could possibly be picked to validate blocks. This is full participation in the Ethereum blockchain.
Polkadot ($DOT)
Polkadot is a blockchain project that allows normally incompatible blockchains, like Bitcoin and Ethereum, to transfer data to each other.
Polkadot can be staked on a few different exchanges like Kraken, Crypto.com, and Binance.
Kraken is a good place to stake your DOT because the minimum fee is only 0.2 DOT, which is not much at all. You will also receive a 12% APR on your DOT. However, this unfortunately comes at a cost. Kraken does take 15% of your reward.
You can also stake your Polkadot on Crypto.com. They offer a few options depending on what you want to do. If you need to use your DOT soon you can choose the Flexible option for 8% APR, but if you are looking to hold DOT for a period of time there are better options. You can choose the 1 month option for 10% APR or the 3 month option for 12.50% APR. However, depending on the option you choose you can’t touch your DOT for 1 or 3 months, even if the price starts to change dramatically.
Binance is probably the most popular exchange in the world and is available just about anywhere. It requires no minimum in order to stake, and can earn you up to 16.62% APR if you choose to stake your DOT for 90 days. Again, this means that you will not be able to access your DOT for the entire 90 days. You can choose 30 days for 11.51% APR if you know you will need to use the DOT soon.
Polygon ($MATIC)
Polygon is a scaling solution that allows secure, fast, low-cost transactions between Ethereum-based blockchains.
You can stake Polygon on Gemini or Celsius. There are also a few other exchanges like Crypto.com or Binance that allow you to stake MATIC.
Gemini offers about 5.43% APY and can easily be staked right from their app. So, 1,000 MATIC will net you about 55 extra per year.
Celsius offers an even better rate of 10.51% APY. Unfortunately for some people, Celsius isn’t available to use due to where they live, but this is definitely the better option for those who can use it. Starting with 1,000 coins would get you about 110 new MATIC in one year.
Summary
Cardano, a platform used to develop dApps, can be staked on Coinbase, Daedalus, and Yoroi Wallet, and range anywhere from 3.75% to 5% APY.
Algorand, both a currency and a platform to develop dApps, can be staked using Coinbase at 5.75% APY, Binance at 4.5% APY, or you could participate in governance to earn about 7% APY.
Gemini Dollar is a stablecoin issued by the exchange, Gemini, and is backed by the United States Dollar. It offers 6.9% APY.
Ethereum is the most popular crypto platform used to build dApps, and the most popular coin to stake. You can stake it on Coinbase, Gemini, Kraken, or you could set up your own validator if you have 32 ETH.
Polkadot is a blockchain that allows blockchains on different networks to talk to each other. Staking Polkadot is easy with Binance (16.62% APR), Crypto.com (12.50% APR), or Kraken (12% APR).
Polygon is a scaling solution that allows Ethereum based projects to connect with each other. You can easily stake Polygon tokens called MATIC on Gemini for 5.43% APY, or on Celsius for 10.51% APY.
Now that you know the best crypto to stake, let’s take a look at
where to buy your crypto.
