Cryptocurrency Staking 101👨🏫
There are technically two types of staking in cryptocurrency. The first is staking on a proof of stake blockchain.
This is where validator nodes lock up cryptocurrency to process transactions on the blockchain and earn transaction fees and block rewards as payment for this service.
The second type of cryptocurrency involves locking a coin or token on centralized or decentralized platforms and protocols.
Rather than securing a proof of stake blockchain, this staked cryptocurrency earns rewards from lending, liquidity provision, or yield farming.
1️⃣Top Crypto Staking Pick 11️⃣
When it comes to proof of stake cryptocurrencies, one of the best on the market is Polygon’s MATIC. Polygon co-hosts some of Ethereum’s most popular dApps and has over 3 billion in total value locked.
MATIC staking rewards range from 520 percent per year to 5.2 percent per year depending on the total amount of MATIC being staked, and this reward currently sits at about 19 percent per year.
2️⃣Top Crypto Staking Pick 22️⃣
Another top-of-the-line proof of stake cryptocurrency is Terra’s LUNA. Terra is a cryptocurrency project that makes it possible to create stablecoins that are backed by cryptocurrency.
Besides collateralizing stablecoins, LUNA is used for staking on Terra’s proof of stake blockchain, and LUNA staking rewards are stable at around 12 percent per year.
3️⃣Top Crypto Staking Pick 33️⃣
Polkadot is one of Ethereum’s top competitors, which is no surprise given that its founder Dr. Gavin Wood also co-founded Ethereum and played a critical role in Ethereum’s development.
Like Polygon, staking rewards for DOT vary based on how much DOT is being staked, and the current annual return is about 14 percent per year. Note that 300 DOT is currently required to stake.
4️⃣Top Crypto Staking Pick 44️⃣
Binance is the world’s largest cryptocurrency exchange, and BNB plays an integral role in its various products, services, and platforms.
BNB staking rewards on the Binance Smart Chain can be as high as 30% per year. The caveat is that these staking rewards are not stable as they come from transaction fees alone.
