So, is staking Ethereum worth it in 2022? Well, I can tell you from firsthand experience staking crypto is one of my favorite forms of generating passive income. Yes, I said the “P” word, but what most people don’t realize is that this is a real thing. You buy into a crypto and get paid just for holding it usually monthly. It’s the same as how some dividend payments work in the stock market. Let’s quickly look at some of the benefits to staking.
Benefits to Staking Ethereum
For many people seeking to get involved in cryptocurrencies, the terminology can be intimidating at first. Do not let that deter you because it’s not as complicated as it may sound, and you don’t need an advanced degree in engineering or math to be successful investing in crypto or staking.
Staking crypto is a term that has emerged in response to efforts within the blockchain technologies to offer protection to their users and coin owners. Blockchains are not centralized, like banks. That means there’s no intermediary to protect the average consumer or investor. When a transaction is made using crypto, users collate ‘blocks’ detailing transactions and then they are included in the historic record. When those transactions are accepted, those users earn a fee that is paid through crypto.
To prevent fraud, staking developed. This basically means when someone proposes a new block, a stake is someone putting their own crypto on the line, which helps to ensure (or at least come as close to ensuring) that rules are followed. This helps to reduce the risk of fraud and minimize errors, essentially negating any need for a centralized regulatory body; users are their own advocates and protection. When more (money) is at stake with a block, the greater the chance of earning transaction fee awards, but if the block is found to have errors (inaccurate information), the person can lose some or all of their stake. This is known as slashing.
Where to Stake Ethereum?
So is staking Ethereum worth staking in 2022? Absolutely. There are different platforms to stake Ethereum, but none as solid and trustworthy (especially for the beginner or intermediate crypto investor) as BlockFi. This is a regulated platform, which offers assurance that everything about it is on the up-and-up. They are also affiliated with Coinbase.
Benefits to Using BlockFi
For those who may be more seasoned in their crypto staking, BlockFi might not be the right fit, but for someone just entering this realm or who has only a base understanding of how this is done, BlockFi provides a wealth of benefits, including:
- No commission fees when using BlockFi, which is a huge bonus for those just starting out in staking Ethereum.
- No monthly fees, either when you use BlockFi.
- You don’t need to make a minimum deposit, which offers newbies a great entry point.
- It is U.S.-based and regulated.
While there are no custodial or joint accounts and only a limited number of free withdrawals from those interest accounts, BlockFi offers an exceptional launching point for those getting into staking Ethereum.
Interest Rates for Ethereum & Other Coins
With BlockFi, an investor could earn anywhere between 3% and 8.6% compounding interest on the crypto you stake in. Some of the other companies offering investment (staking) opportunities in crypto include:
- Linus: offering 4.5% returns on ‘stable’ coins. They don’t offer investments in Bitcoin.
- Coinbase offers 1.25% returns and 4% on Bitcoin.
- Celsius Network offers 8.69% returns and up to 5.19% on Bitcoin.
- Ledn offers up to 9.5% and 6.1% on Bitcoin.
Keep in mind, though, that even when a platform offers higher interest rates, there are many factors that you would have to weigh to determine if it’s a smart investment opportunity for you. Minimums, withdrawal fees and other fees, and more can cut into those returns, often significantly so (unless you’re a seasoned investor with a lot to put into these accounts).
Borrowing Money on BlockFi
When you invest in crypto (at least stable coins like Ethereum), some platforms give you the opportunity to take out loans based on those investments. To leverage your cryto investments is a great way to fund other ventures without having to sell the coins.
A lot of investors see cryptocurrency values continuing to rise for the foreseeable future, so they are reticent to let them go, and a loan is a perfect option.
Think of it like owning real estate, then taking out an equity loan for improvements, a vacation, or some other venture. BlockFi provides an exceptional outlet to get loans out based on the stake or share of coins you own. Taking a loan out through BlockFi also provides the added benefit of not counting it as a taxable event, meaning you can save in the long run if you require multiple loans over the years.
If you were wondering if staking Ethereum in 2022 is worth it, we hope this helped you out. Another thing you must understand about staking is coin appreciation. Meaning not only will you get these small dividend payments each month, but if your coin goes up in value there is a compounding effect. Especially if you have a long-term mindset, and it’s also very likely Ethereum will only increase in value over time.
Staking is also a solid investment opportunity, especially in uncertain economic times that are spreading around the world, cryptocurrency is one of the best options. It’s expected to only grow for decades and as more companies and countries embrace the benefits crypto offers, it’s only going to strengthen. For staking beginners and intermediate crypto investors, BlockFi truly is the gold standard that helps you learn, feel secure, and see returns.