Cryptocurrencies depend on mining for verifying transactions and introducing new blocks. Cryptos like Bitcoin use a proof-of-work(PoW) protocol that involves various machines solving arithmetic puzzles. For proof-of-Stake (PoS) it is all about existing users letting their funds do the verification in a process called staking.
Here is all to know about staking and the cryptos you can stake.
What is crypto staking?
Crypto staking is where crypto users hold their coins in a wallet to participate in operating the PoS-based blockchain system. It is similar to mining in the PoW consensus as it involves validating transactions and introducing new blocks in the system.
For every block introduced in the system, the staking wallet gets rewarded. The amount received as rewards depends on the amount on the wallet. Having more funds come with better rewards as you are paid based on your participation in the network. All this is similar to having a savings account, where the bank pays you interest for having your money.
The Pos blockchain platforms are highly scalable and come with high transaction speeds. That explains why most recent cryptos adopt the consensus.
What crypto can you stake?
Given the multiple benefits that come with staking crypto, several cryptocurrencies are embracing staking. Therefore, there are multiple options when you are looking to stake crypto. Some of these options include;
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Ethereum 2.0 (ETH 2.0)
Ethereum 2.0 has seen the ETH network upgrade from the PoW to the currency PoS protocol consensus. Given its place as the second most valuable crypto, staking Ethereum 2.0 comes with handsome rewards. Also, staking Ethereum at the moment comes with the additional pride of being one of the earliest validators.
To stake Ethereum you must own at least 32ETH and be an ETH1 mainnet client.
Given the influx of Ethereum uses like Defi and the NFTs, staking it remains an ideal option for every crypto trader. Staking Ethereum comes with returns of around 6.8%.
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Algorand (ALGO)
Alogornd is a PoS crypto that is all about faster and secure cross-border transactions. The network needs stakes to ensure security and for processing transactions.
Staking ALGO comes with rewards of around five and ten per cent annually, depending on the staking platform. For example, staking in top crypto exchanges like Coinbase and BTC markets come with higher returns.
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Tezos (XTZ)
Tezos is one of the disruptive crypto projects with one of the biggest Initial Coin Offering of around $230million from investors. This coin uses liquid Proof-of-Stake (LPoS) and refers to the staking process as “baking”.
Bakers get rewarded through XTZ while malicious operators get their coins confiscated. Every baker must hold 8000XTZ and run a full node.
The rewards for baking/staking XTZ are around 5-6%.
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Icon (ICX)
Icon is another that allows staking for rewards. The Korean crypto operates on a delegated Proof-of-Stake (DPoS) consensus algorithm. This consensus protocol allows a select number of nodes to actively verify transactions. The other account holders can then delegate their coins for the staking.
Staking Stablecoins
Other than the regular cryptos, you can still stake stablecoins which come with stability and low risks of volatility. Some of the stablecoins to stake include; USDC with a yield of around 3% annually, BUSD with 3.59% returns and USDT at around 8% returns.
