Best Staking Coins in 2022

06/30/2022By: C, Fiona

Cryptocurrency staking is a good way to generate passive income from your cryptocurrency holdings because it promises better incentives than putting your money in it. The following is a complete overview of what cryptocurrency staking is and the best staking coins in 2022. Let’s have a look!

Staking in Crypto.Explained

Staking is a way to profit from your cryptocurrency by sending it to a third party. The term staking refers to a Proof of Stake(PoS). In this system, coins are used to verify transactions on the blockchain.

This is an alternative to mining, using a proof-of-work system and the computer solves the cryptographic problem to verify the transaction. Cryptocurrencies do not depend on any centralized authority, such as a bank or payment processor. Instead, transactions are recorded in a public ledger that anyone can view, which is called a blockchain.

The blocks on the blockchain consist of transactions, which must be verified through the so-called consensus mechanism, such as mining or staking. Whoever successfully participates in creating a new block will be rewarded.

Best Staking Coins

Ethereum (ETH)

Ethereum is the second largest cryptocurrency in the world. originally based on a Proof-of-Work consensus, but has recently been moved to a Proof-of-Stake consensus which means you can now stake Ethereum and collect rewards passively. However, to become a an Ethereum validator and staking, you will need to stake a minimum of 32 ETH.

This makes it difficult for most small wallet holders to participate directly in the official Ethereum staking program.solve this problem by joining different staking groups offered by exchanges or staking services. With their help, you can bet any amount of Ethereum and earn a profit of 4-6%, depending on the platform you use to staking ETH.

You can bet etherium on various exchanges like Binance, Coinbase and Kraken.

Polkadot (DOT)

Polkadot improved the scalability of Ethereum and successfully won a considerable share of the cryptocurrency market. Even if its fundamentals and roadmap lead to a promising future, you can stake DOT on exchanges such as Binance and Kraken to get rewards.

Like on other PoS systems, the verifier also needs to test the transaction on Polkadot. However, becoming a Polkadot validator is not that simple. Setting up a verifier requires some technical expertise, and verification requires a continuous supply of DOT.

At the time of writing, 160 DOT were required to become a validator. However, since the quantity fluctuates frequently, it is impossible to provide a reliable estimate. Polkadot has an average annual return of 14%, which is incredible and unusual in other currencies.

Tezos (XTZ)

If you want to build a cryptocurrency portfolio for staking , but want to start with a small amount of money, Tezos is a coin for you. This is because, unlike most other cryptocurrencies, which require tons of tokens to start staking, you jsut need one coin to start staking XTZ.

You can easily stake  Tezos on some exchanges, including Binance and Kraken. Many wallets, such as Atomic Wallet and Ledger,also support Tezos staking.  As for rewards, you can expect a return of about 4% and 8.5%, depending on your target platform and time.

Algorand (ALGO)

Like Cardano, Algorand is another cryptocurrency that can be staked on many exchange platforms and wallets, including Exodus and Coinbase. Although each of these platforms provides a different algo minimum staking limit, you won’t spend more than a few hundred dollars to start.

In other words, if you are looking for low investment stakes, and you have a lot of ALGO accumulation, it provides a good market start. In addition, this cryptocurrency provides a lot of value in terms of incentives. And your investment can get a return from 3% to 10%. If you are a newcomer to nail households, this is a good start for money.

In addition, Algorand network is famous for its fast transaction. It provides a unique concession algorithm to reduce the risk of algo’s blockchain fork. You can claim your reward at each transaction, and the funds will be transferred directly to your global account.

 

Cardano (ADA)

Cardano is another popular cryptocurrency. In terms of market value, it is high on the list of the top ten cryptocurrencies. Its daily trading volume is also very high, more than $1.5 billion. In addition, you can easily stake on Cardano on some exchanges such as Bitfinex and Kraken , as well as Trust Wallet and Atomic Wallet.

Cardano’s blockchain has many extraordinary functions, helping it win the title of Ethereum killer. Although this is quite another matter, the highlight is that unlike Ethereum, Cardano is very easy to stake.

First, you don’t need a lot of ADA tokens to start staking. You can start with just a few coins. At the time of writing this article, the price of an ADA coin is about $0.89. The most important thing is that you can also get a considerable proportion of coins every year. The actual rates varies from 3% to 6%, depending on the platform you have staked on.

 

Risks of Staking Cryptocurrencies

Although staking in  cryptoc an provide huge returns, it is not without fair risk. Some of these risks are described below.

Volatility

Cryptocurrency is a highly unstable form of currency,  meaning that its value is changing all the time. Even if you can get the predetermined benefits from your investment, there is always the risk that its price will suddenly fall. In other words, if the value of cryptocurrency falls by more than the interest it generates, you will suffer a loss. However, as its value soars, you can also get higher profits.

Liquidity Risk

Since cryptocurrency assets are quite volatile, you must ensure that the currency you stake on has sufficient liquidity and can be sold at any given price point. If you target a small coin with almost no trading volume, you may face difficulties in booking profits and changing your cryptocurrency into stable coins.

For example, when a coin is worth $4, you become a shareholder and earn 11% interest within a year. Now, the market suddenly starts to sell. You want to sell your coins to book your profits. However, you may not be able to sell your coins immediately because there are not enough buyers willing to buy at this price. You must wait until the transaction finds a buyer at a lower price.