Staking provides crypto holders with an opportunity to make their digital assets work for them. This process is all about the digital assets allowing them to earn passive income without needing to engage in any kind of sale. Crypto staking can be likened to the process of putting money in a high-return savings account. When you deposit in your savings account, the bank receives such money and characteristically lends it to other bank users. In exchange for keeping the money in the bank, you receive only a part of the interest earned via the lending process.
Likewise, when you take a stake in your digital assets, it means you lock up the coins so as to partake in the operation of the blockchain and maintenance of its security. What you benefit from doing that is that you receive rewards that are calculated in terms of percentage yields. These returns are usually much higher than interest rates offered by traditional banks.
Benefits of Staking Cryptocurrency
- Straightforward Cold Staking
The most impeccable advantage is the choice given you to stake the cryptocurrencies “cold.” This means you can be connected to the internet throughout. Once you have this access, you can leave your currency in your crypto wallet, and you do not have to worry about them at all.
- Performed At Exchanges
Cryptocurrency staking can be done seamlessly through an exchange. Uphold, Nexo, and Binance US are three very reliable exchanges you can visit to stake your cryptocurrency.
- Generate Great Rewards and Extra Income
Thanks to staking, you can spread your assets while also reducing transaction fees charged on the blockchain. This has proven to be one of the best ways to make additional income.
- Consumes Less Energy
Staking consumes remarkably less energy when compared to mining. This is because it only needs less computational power, which reduces energy usage. Following the introduction of the proof of staking system, the cryptocurrency world won the situation exponentially. This has saved the environment from a great deal of disruption by reducing the consumption of a sufficient amount of energy in mining. Now onto our top 5 staking coins starting with Polkadot.
1. Polkadot
The makers of Polkadot have declared that the technology has been created to serve three purposes: bonging, governance over the network and staking. Here, token holders keep the network safe and take rewards by staking DOT. Polkadot’s modernized staking mechanism is created for fair representation and maximum decentralization.
Benefits
- High energy efficiency. Polkadot consumes little energy used by regular blockchains. This is due to its next-generation nominated proof-of-stake (NPoS) model.
- Easy blockchain innovation. With the Substrate framework, you can create a custom blockchain within minutes. You can also attach your chain to Polkadot and then receive security and interoperability from the get go. This has helped in the growth of Polkadot’s network.
- True interoperability. Polkadot enables cross-blockchain transfers of any type of data or asset, not just tokens. Connecting to Polkadot allows to interoperate with a wide variety of blockchains in the Polkadot network.
2. Cardano
Cardano has maintained its status as a top cryptocurrency platform with a less energy-sustaining mechanism for keeping its computer network than bitcoin uses. It doesn’t need any specified computers. The platform is one of the most active and biggest blockchains. There are over 900 different projects currently building on Cardano. In terms of total value, Cardano’s native token, ADA, ranks among the Top 10 cryptocurrencies in the world.
Benefits
- More environmentally friendly
- Peer-reviewed network
- Faster transactions
3. Polygon
Polygon is an ERC-20 token, a layer-two blockchain network based on Ethereum. Comparing Defi coins and some other well-known cryptocurrencies to Polygon shows how much difference there is. In contrast to the blockchain-enabled transaction mechanism deployed by Dogecoin, Bitcoin, Dash and Litecoin, Polygon was created to accelerate the implementation of decentralized apps located on Ethereum. The Polygon network seeks to address issues related to Ethereum blockchain, including network congestion and high transaction costs, without giving up security.
Benefits
- Extremely fast transactions per second
- Low transaction fees
- Great for decentralized finance apps
- Can scale and offers staking rewards
4. Algorand
Algorand was launched in 2019 and is now a listed altcoin that displays a substantial amount of prospects in the crypto space. ALGO has attempted to address three main issues affecting the crypto market: scalability, security, and decentralization.
Algorand is a cryptocurrency that centres on solving various problems encountered. There are some other cryptocurrencies that are operated on the Algorand blockchain, like the Algorand Standard Assets, also known as ASA. Algorand, as well as ASA, can be controlled through Ledger Live. This instrument permits the claiming of various rewards. Algorand also uses a self-validation and Proof-of-Stake of the transaction in contrast to a mining-enabled Proof-of-Work algorithm deployed by other cryptocurrencies like Bitcoin.
Benefits
- Real-world demand for Algorand’s product offering
- Mainnet launched with an impressive 1,000 transactions per second
- There are strong partnerships involved
- The incredible speed of development and minimal bugs and errors
- Algorand was created by respected developers and is supported by a world-class team
- The incredible speed of development and minimal bugs and errors
- Well-documented code base
5. Solana
Solana is a blockchain platform that was established in 2020. It saw a rapid rise in interest from cryptocurrency developers and enthusiasts who began using it to construct decentralized applications for industries like computer science, finance, and art. Developers can use Solana to create products that permit users to execute digital contracts and carry out secure transactions. Solana has been described as a quicker and more systematic competitor to crypto heavyweight Ethereum.
Benefits
- Solana grants composability between projects
- Solana can process up to 50,000 transactions every second
- Solana has attained high levels of extensibility.
Top 3 Staking Exchanges
1. Uphold
Uphold is perfect if you seek one place to buy and trade different kinds of assets. It provides quite a number of cryptocurrencies alongside U.S. equities, national currencies, and precious metals. However, security remains a concern. Currently, there is a class-action lawsuit claiming that the platform did not properly protect its customers. Nevertheless, Uphold is a legitimate platform to stake your coins. You can get started on Uphold here.
Pros
- Users can earn rewards through crypto staking
- Amazing cryptocurrency selection
- No withdrawal, deposit, or trading fees
- Cross-asset trading
- Educational content
Cons
- Variable spread
- Security concerns
2. Binance US
Binance US is known for possessing high-speed trade implementation. While it doesn’t provide as many crypto-to-crypto and cryptocurrencies trading pairs as its parent company, there are over 125 cryptocurrencies on Binance. U.S. This is why the exchange is often considered one of the top-level exchanges while surpassing various other U.S. exchanges. You can get started on Binance US here.
Pros
- Low or no trading fees
- Close top 125 cryptocurrencies available
Cons
- Not available in four U.S. states
- Smaller selection than the global Binance platform
3. Nexo
Nexo is situated on the blockchain, but it allows crypto loans, making it easier for users to access immediate crypto-backed loans without hassles. Established in 2018, it has begun gaining more ground in the cryptocurrency space. Nexo has attempted to replace services rendered by traditional banking institutions by using crypto assets. You can get started on Nexo here.
Pros
- Transparent security measures
- Loyalty-earning opportunities
- Numerous products and features for crypto users
Cons
- Region-locked programs
- Complex system
Final Thoughts
Staking cryptocurrency is an excellent way of investment that allows you to earn passive, extra income for yourself. There are different coins you can stake to earn more. Such coins include Polygon, Cardano, Solana, Algorand etc. Nexo, Binance US and Uphold are recommended exchanges on which you can stake your cryptocurrencies.
