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The cryptocurrency era is here, and with it are multiple opportunities for people to make money. One of the easiest ways to make money in the crypto space is through staking. While staking, a part of the consensus “proof of stake”, is a process by which many cryptocurrencies verify their transactions and let participants earn rewards on their holdings. But what does the term Crypto Staking really mean and how to stake crypto?
In simple words, Crypto Staking is the mechanism through which the digital tokens are locked up for a certain period to contribute to the performance and safety of the respective blockchain network. Those token holders in return for staking their holdings get the opportunity to earn rewards and interest. It is a great way to generate passive income from cryptos and is lucrative as well because cryptocurrencies tend to offer high-interest rates for staking.
However, not all cryptos can be staked. For enabling staking, cryptocurrencies need to use the proof-of-stake consensus mechanism.
Where and How to Stake Crypto? The Ultimate Guide on Crypto Staking
Returns on Crypto Staking
Crypto staking allows you to earn rewards without selling off your crypto holdings. You have to deposit your cryptocurrencies in a wallet/platform of your choice and wait for results. For profit maximization, you should consider the rate of interest being offered. You can also use a crypto staking calculator to determine the potential rewards.
Earnings are usually dependent on the kind of cryptocurrency being deposited and the platform where such staking is being done. The rates are variable as the rewards rates often change with the change in market conditions. Before depositing, you must be aware that the deposited cryptocurrencies cannot be used during the staking period.
Where to Stake Crypto?
The easiest way to start crypto staking is through a crypto staking platform. These platforms make the entire staking process a lot easier and also offer high rates. A crypto staking platform might be a crypto exchange, broker, or simply an app. The token holders need to commit their cryptocurrencies to these platforms and start the staking process. The platform will then pay rewards on the deposits made. If you want to stop, you can unstake your deposit.
Moreover, the kind of cryptocurrencies you can stake is dependent on the kind of platform you choose for staking. This is because some of the platforms only support a handful of cryptocurrencies while some provide dozens of staking options.
There are many platforms available for staking and all have their own advantages and disadvantages. Some of the most convenient ones are Binance, Kucoin and Coinbase.
Staking Cryptos Through Different Mechanisms
The overall process of crypto staking is similar for all but different platforms have different standard procedures to undertake the total crypto staking activity. Here we will discuss how to stake cryptos
Staking On Binance
Binance has many “earn interest” programs and it allows a plethora of coins for staking at varying API percentages. Due to this, the holders of digital currencies get greater freedom and access to the lucrative side of crypto staking.
There are several options in Binance like ETH 2.0 Staking, BNB vault, or Liquid Swap but for staking their coins one needs to use the “Locked Staking” option. So, how to stake crypto on Binance?
Step 1: Go to the Binance Home page and create a Binance account.
Step 2: In the Binance wallet deposit tokens or purchase tokens using fiat or crypto exchange.
Step 3: from the dropdown menu go to Finance –> Binance Earn –> Find “Locked Staking” section –> click on “Go to Staking”
[NOTE: The Binance mobile application does not support the locked staking option. Use the internet browser of your phone and then follow the same steps]
Step 4: Check the “Display Available Only” option in the “Locked Staking” panel to filter the staking options according to their availability –> Find your coin and click on “Stake Now”
[NOTE: Duration can be changed in the next step too]
Step 5: In the left panel select “Duration” and “Lock Amount” and check the right panel for reviewing stake date, value date, interest period, Interest end period, redemption period, Est. APY and Estimated Interests –> select the agreement checkbox and click “Confirm”.
[NOTE: Binance has four-time frames for staking: 15, 30, 60, and 90 days and each coin has its own minimum locked amount. One needs to have at least the minimum amount in their spot wallet and if the assets are locked under other options redeem them first]
Staking on Trust Wallet
Trust wallet is a mobile wallet through which one can buy and stake cryptocurrencies in a secured manner from anywhere around the world. It allows the staking of a wide variety of assets. So, how to stake crypto in Trust Wallet?
Step 1: Download Trust Wallet and create an account
Step 2: Create a new wallet (multi-coin-wallet)
Step 3: Back up the wallet created and store the randomized 12-word recovery phrase in a safe and secure place.
Step 4: Create an exchange account on any cryptocurrency exchange to purchase your desired coins and then send them to the Trust Wallet address. Once the tokens are received they will be visible on the wallet.
[NOTE: To proceed with staking one needs to have at least one coin of their choice in their wallet]
Step 5: To access the staking menu click on the desired coin–> click on “more” –> Click on “Stake” –> enter the number of tokens you want to lock along with the duration of the locking period
Step 6: Select a validator from the list. More than one validator can also be selected but that needs to be done one by one.
Step 7: Check and confirm to submit the transaction.
Staking on Coinbase
Coinbase is another leading platform that allows users to stake their cryptocurrencies and earn rewards. So, how to stake crypto on Coinbase?
Step 1: Create a Coinbase Account.
Step 2: Buy the coin you want to stake on Coinbase (should be a relevant proof-of-stake cryptocurrency).
Step 3: Deposit the tokens purchased to start with the staking process.
Step 4: Once the required amount of cryptocurrency has been deposited the exchange will automatically begin the staking process and send rewards to the wallet when available.