Crypto staking is a way to earn digital currency while holding a specific amount of crypto. This is a frequently used concept in the world of digital finance. Staking is also a way that many verify transactions.
Putting idle laying cryptocurrencies to work sounds attractive but is it as profitable as they say? Is taking it up worth it?
This method now applies to coins that use the Proof-of-Stake (PoS) payment processing model. To remind you, this one is more energy efficient than the PoW model. So, this type of coins staking has to do with adding new transactions to the blockchain.
How Crypto Staking Works
Here is how cryptocurrency staking comes into reality.
A user pledges their coins to the crypto protocol. Out of every participant who pledges their crypto, the protocol picks users who will be validators and approve transactions. So here is a little trick: users pledging more coins are more likely to be chosen as validators.
Whenever new blocks of transactions are added, new digital coins are minted, and then staking rewards are distributed in the form of the same cryptocurrency used as a stake.
The vital thing to note is that staked crypto still belongs to you. They just become a temporary investment, and you can unstake them when you think it’s time to. Unstaking coins, however, doesn’t happen overnight. It may take nearly 7 days, plus there might be a minimum time limit for which a specific cryptocurrency can be staked.
How Much Can I Earn With Staking Per Year and Are There Pitfalls?
This way of earning interest on your coins is growing in popularity every day since it holds the potential to gain profit. Of course, it will depend on how much you stake and on the given interest rates.
Many stakers earn 10% to 20% a year. Besides, doing this will help maintain the whole blockchain’s efficiency and security.
Like any other way to invest, staking includes a few risks. One of them is the unstaking time and conditions which we described above. Next, there is cryptocurrency volatility that doesn’t disappear just because the earning method is really good.
Since crypto prices tend to go up and down, stacked coins can also suffer price drops. This can impact how much you earn and even outweigh any percent you might have earned.
3 Best Projects Worthy of Staking in 2022
Once we’re done dwelling on the benefits, risks, and peculiarities of staking, let us see which top projects can make you richer this year.
This isn’t a new crypto ecosystem, but it’s growing by huge leaps. Even despite the fact that the cryptocurrency originally ran on the PoW mechanism, now it has employed PoS and is a great investment for the long term.
Ethereum is so widespread that you can exchange 0.009 ETH to USD and back practically anywhere, just minding the security and reputation of an exchange.
One of the ways to earn is by holding an amount in a staking pool. This may be a good decision for anyone who doesn’t have a big amount to commit and doesn’t mind other validators using them.
- Lucky Block.
These coins are for users who like getting rewards at once. Lucky Block is a young member of the crypto market and isn’t limited to staking only. Using smart contracts, it offers lotteries with guaranteed randomness and credibility. The more coins you own, the higher the chances of getting bigger rewards.
On the other hand, using it for a long time doesn’t mean less profit. Solana is living proof of how an 18-dollar coin can go to a 100-dollar one in a year and maintain steady growth.
Staking it for years might turn out to be the most lucrative investment, so keep up with its price and buy some from a reliable broker, just in case you want to stake it.
With new ways appearing to earn on cryptocurrency, staking remains the ‘old but gold’ method. Try staking one of these top three ways, and this will be enough to feel the income change. If buying crypto makes a problem for you, go to the reputable Coinbase, Binance, Kraken, or LetsExchange to convert crypto to fiat, e.e. 0.22 ETH to USD and back at good rates and with minimal fees.