How and Where You Can Stake Crypto
Crypto staking industry has long crossed the $10 billion mark and is approaching a market cap of $20 billion. The primary reason behind the rising popularity of crypto staking is the excellent passive income opportunity that it presents. Additionally, you don’t need to buy an extra set of coins to participate in crypto staking. If you are a HODLer and can afford to lock-in a set of your owned holdings for a certain period of time, then you can participate in a crypto staking platform and enjoy high passive income. In this article, we’ll discuss more in detail about crypto staking and also list some of the best platforms for crypto staking.
What is Crypto Staking?
Crypto staking is a process where a crypto investor pledges a certain amount of his/her own crypto holdings to validate a fresh block before the latter is added to the blockchain. When you pledge your crypto holdings, the coins will be locked-in up to a specific period of time- and will also earn yields in the meantime. The blockchain utilizes these locked holdings to verify and add new blocks. If the validator can validate the new block successfully, the blockchain will reward him/her with new coins.
If you want to take part in the staking or validation process independently, you will have to build up a full-fledged staking infrastructure to operate the validator node. But building and running a staking infrastructure independently is both an exorbitant and complicated affair. Smarter thing is to assign the validation process to a crypto staking platform.
Best Platforms for Crypto Staking
When it comes to crypto staking platforms, you have a wide range of options to choose from. Below is a list of 3rd party platforms that allow crypto investors to participate in crypto staking.
Crypto Exchange
Most of the leading crypto exchanges also operate as a crypto staking platform. Best part is some of these crypto staking platforms do not even charge staking fees. If you already hold crypto holdings with a crypto exchange, check for once whether the provide the same service.
If the exchange offers staking services, you can directly transfer your holdings from the exchange’s wallet to your staking section. Some exchanges even allow you to transfer crypto holdings (for staking) from your personal crypto wallet.
Another benefit of utilizing a crypto exchange as a crypto staking platform is that you will be able to exchange your existing coin into PoS coins for staking. As mentioned previously, a crypto staking platform only allows staking on PoS coins. Now, say, you are a crypto investor with sizeable Bitcoin holdings, and you want to take part in crypto staking. But it is not possible with Bitcoin as it’s not a PoS coin. In that case, you can exchange some of your BTC holdings into a PoS coin, say, ETH, through your crypto exchange – and then stake the converted coins through the same exchange. Put simply, a crypto exchange is like a one-stop staking solution for stakers and investors.
Staking-as-a-Service platform
These online portals exclusively serve as a crypto staking platform. Dubbed as “SaaS”, these platforms generally will shoulder the entire staking process on your behalf and charge a commission for the service. A SaaS crypto staking platform offers stakers to choose from as many as 50+ staking coins. Interestingly, the process of staking through a SaaS platform is officially termed as “crypto soft staking”.
Crypto staking pool
If you are acquainted with the crypto mining process, you must know about the mining pools. Mining pools allow a miner to join a shared pool of miners and participate in mining through shared resources.
A crypto staking pool comprises multiple token crypto holders who pool in together their crypto resources to participate in the staking process. Put simply, these crypto holders collectively help the pool operator to validate a new block. When the operator receives the staking reward, s/he distributes it among all the pool participants on the staking platform.
This crypto staking platform is especially helpful when you are unable to afford the minimum volume of tokens required for staking a particular crypto. For example, if you want to stake in Bitcoin, you will need 32 BTC minimum. But, if you are unable to afford such a large volume of BTC, you can participate in BTC staking through a staking pool.
Hardware wallet
Did you know that modern hardware crypto wallets too double up as a crypto staking platform? Yes, if you are apprehensive to stake crypto from exchanges given the rise in exchange hacks, you can use your hardware wallet for crypto staking.
It’s easy as 1-2-3 to stake crypto through this platform.
- First, install your preferred PoS coin’s app on your hardware wallet
- Then, create account for staking on the wallet
- Transfer stored coins to the staking section
- Start staking
Now, what if you don’t hold enough coins required for staking in that particular crypto staking platform (read hardware wallet)? Well, much to the relief of stakers, some of these wallet-cum-staking platforms allow stakers to share coins from their other wallets as well.
DeFi Borrowing and Lending Platforms
A DeFi borrowing and lending protocol too serves as a crypto staking platform these days. These platforms support decentralized exchanges with consistent liquidity and hence need a seamless supply of coins. When you stake coins on these platforms, you help them to maintain the required flow of liquidity. In return, these DeFi platforms will reward you with staking rewards.
Crypto staking could be a rewarding experience if you are selective about the coin and the crypto staking platform. Look for coins that carry real-life functionality and can promise a sustainable future. Settle with only the most reputed staking platform that offers a vast range of staking options, is backed by advanced security measures, and assures reasonable fees.
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