Algorand is a self-sustaining cryptocurrency that was created in response to the shortcomings of Bitcoin and other major cryptocurrencies. The blockchain-based project was founded in 2019 by Silvio Micali and has evolved to be able to handle millions of transactions daily.
Being scalable, secure, and able to finalize blocks within seconds, Algorand has gained the interest of many experts and even crypto enthusiasts as transactions are faster than ever. This article explores all that you need to know about earning passive income through Algorand staking.
How Does Algorand Work?
Algorand works primarily using a technology called Proof-Of-Stake, which is in stark contrast to the older networks such as Bitcoin or Litecoin. While Bitcoin’s Proof-Of-Work needs miners to validate transactions on its network, Algorand and other PoS projects rely on only validators to confirm transactions on-chain. ALGO has a limited supply.
Once these validators agree, the next block can then be created. This permissionless protocol is how the Algorand network is secured. Validators are chosen through a unique process called sortation. Validators holding large amounts of tokens or stakes are usually given some preference. This entire process is effective as resources are not wasted unnecessarily as seen with Bitcoin mining. Thus, transaction fees are much lower.
Rewards for validators are returns tied to their stake. In other words, the higher their stake, the higher the returns. This gives validators the incentive to optimize the health of the network even better. According to the genesis of the blockchain, 10 billion Algorand (ALGO) coins were minted. Currently, just over 6 billion coins are in circulation. The distribution of these immutable coins will end in 2030.
Staking is simply the process of holding your funds in a crypto wallet to support the network’s operations. As earlier mentioned, Algorand stakers get rewarded for simply depositing and holding their coins. This gives more freedom and ease of access and people can participate without having to give up full liquidity. The entire process is passive since all you need to do is hold your coin in your wallet.
You do not need any technical expertise or expensive hardware to stake your ALGO. This means that just about anyone can participate in the process. The concept behind staking your ALGO is simple. Every ALGO token generates a new one. Also, since the token is a potential rising asset, even small amounts could make a big difference in the future. The current per token price of Algorand is $1.82.
There are several ways to stake your ALGO. Options include Exodus wallet, Bitfinex, Trust wallet, Ledger hardware wallet, Coinbase, Kucoin, and Binance.US. Binance.US remains one of the best exchanges and most popular ways to stake Algorand and other coins. The process is relatively the same across all platforms.
Algorand Staking On Binance US
Binance.US is an all-in-one cryptocurrency trading platform and digital wallet. It boasts millions of users on its platform. Earning rewards via staking is just one of its numerous features. Apart from Algorand, Binance.US also supports VET, ATOM, XTZ, EOS, and ONE for staking. Getting started is easy. All you need to do is follow the simple steps below:
- Create an account with Binance.US. This process is free. Once done, the next step is to verify your ID.
- Go to ‘Finance’ at the menu top. Choose ‘Binance Earn’
- Scroll down and search for ALGO in the Flexible Staking list
- For those without ALGO funds in their wallet, click ‘market buy’ or the ‘Transfer’ button to deposit and store your ALGO tokens.
Algorand staking on Binance.US gives an added benefit of being able to stake ALGO while you are still waiting for a trade. This gives you the opportunity to benefit from both the rewards of staking and a potential trade profit.
Interest Rates for ALGO Token on Binance US
Binance.US does not charge any fees for staking. Rather, there are interest rates for staking ALGO token on the platform. Locking your tokens for a long period of time suggests the opportunity to earn higher profits.
The PoS staking for ALGO on Binance.US is as follows:
- A locking period of 7 days gives an APY of 1%
- 30 days gives 8.79% APY
- 60 days gives APY of 10.47%
- 90 days gives an APY of 16.79%
Rewards on stakes are calculated on a daily basis with hourly snapshots made. These rewards can then be distributed at a certain period each month. Although there are no guarantees, historical data suggests that Algorand staking for a year gives an average yield of about 6%.
However, it is important to remember that this is subject to drastic changes over time as the cryptocurrency market remains volatile. Massive price fluctuations seem to occur every now and then. This might affect the value of your staked coins.
Benefits To Using Binance US
Using Binance.US comes with several benefits. Low fees, a wide range of cryptocurrencies, a secure and user-friendly platform, and easy trading are some of the major benefits of Binance.US. Concerning staking, here are some benefits of using Binance.US:
- Passive process with little or no action required
- Large pool for staking crypto which leaves you with multiple options
- Low minimum balance of just 1 ALGO to be eligible for some reward
- The potential to earn compound interest on rewards. Users have the opportunity to make multiple earnings on offers with different interest rates.
- High-speed and secure transactions. Binance.US remains one of the safest platforms for trading and staking cryptocurrencies.
- Low risk of forking
Other Coins Available for Staking On Binance US
Binance offers a range of staking products. Apart from Algorand, other coins available for staking in the official staking program include ATOM, VET, XTZ, EOS, and ONE. Traders can earn as high as 10% annually by simply staking on the platform. Note that different interest rates apply to the different coins supported for staking on the Binance.US platform.
Staking Algorand has rapidly become a popular way to make passive income without stress among crypto traders and enthusiasts. More so, the idea of staking comes with almost zero risks, leaving you with nothing to worry about. All you need to do is buy Algorand and leave in your wallet for a while. Bear in mind that you can still carry out trades while staking your coins.
Binance.US remains one of the best platforms to stake your ALGO. Whether you are a newbie in staking or simply looking for a better way to earn more money with your digital assets, staking ALGO on Binance.US remains a perfect solution for you. Build a better financial future with Binance.US today.