What is Staking Crypto? Should You Care? Crypto Staking Explained Simply (Updated 2021)



 

What is Staking Crypto?

What is Staking Crypto

What is Staking Crypto – explained simply: Crypto staking requires coin-holders to lock or “stake” their coins for set periods in order to forge the blockchain and receive rewards.

Staking Crypto can reward coin-holders for locking coins for a set period of time. Coin-holders that stake their coins can join the blockchain and participate in forging new blocks in a “proof of stake” blockchain. Proof of stake is a lower-cost way of supporting the network than typical “proof of work” blockchains.

Timestamps:

0:00 What is Staking Crypto?

2:33 Proof of Work vs Proof of Stake

5:48 How to Stake

7:49 Should You Stake?

5 Top Staking Coins (2021):

There are technically two types of staking in cryptocurrency.

The first type 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.

5️⃣Top Crypto Staking Pick 55️⃣

Staking on Ethereum 2.0 began last winter, and over 12 billion dollars’ worth of ETH is currently being staked by nearly 130 thousand validators even though the network isn’t technically live yet. Any ETH staked on Ethereum 2.0 could be locked up for a year or more. This is not ideal if you’re planning on selling your ETH during this bull market. One platform that lets you create this tokenized staked ETH is Ankr which will give you aETH when you stake regular ETH in their web app using Metamask.

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