5 BEST STACKING COINS : EVERYTHING YOU NEED TO KNOW
In this article i am going to show you 5 best coins for staking in 2022. There are a lot of people in the crypto world who like to stacking coins because it gives them passive income. The purpose of this article is to give you an overview of the top coins at stake and the one I want to stake out of all of them.
What is staking in a nutshell? staking has to do with blockchain networks that use a proof-of-stake consensus model rather than proof of work for coins like bitcoin which use proof-of-work.
You have miners who buy expensive equipment and use a lot of energy and computing power to solve blocks for proof of stake. it’s different when you commit or stake your coins for the right to validate blocks.
So instead of electricity and hash rate, it’s the number of coins you commit that determines how likely you are to get chosen and for proof of work networks if a miner misbehaves and tries to break the rules they lose the energy they spend doing so
Whereas for proof of stake networks most of them do something called slashing which means that you lose your committed funds if you get caught breaking the rules generally speaking it’s less complicated to stake than to mine but it can still be pretty hard to figure out.
now you may wonder why would anyone want a stake anyways well there are two main reasons first because they want to support their favorite project by securing the network and ke1eping it decentralized and second
You earn coins when you validate a block, so if you’re gonna huddle anyways, you may as well make money.
Before we get to the list of my top five staking coins I want to highlight a super important distinction first which is delegating versus validating which are both ways to participate in staking because sometimes running a validator node is super costly and complicated.
You can just delegate your funds instead basically with that you just choose someone to lend your funds and they do the validating for you and they give you a cut of their rewards
It’s kind of like a mining pool where the smaller miners combine their hash rate and split any rewards that they get sometimes exchanges also offer staking services for coins that you hold with them
but of course not your keys, not your coins anyways all of that is just something for you to keep your mind on.
best coins for staking : Crypto passive income
Number 5: POLKA DOT
This is one of Ethereum’s top competitors and it’s quite similar to Eth 2.0 architecturally that is no surprise since Dr. Gavin Wood is one of Ethereum’s co-founders.
they currently rank top 10 in total market cap which is impressive because their power chains haven’t even launched yet now their staking rewards varies depending on how much dot is being staked across the whole network but their current rate is around 14 per year with an adjusted rate of around 5
and adjusted rate just means how much you earn after taking into account token inflation. The process of becoming a polka dot validator is rather difficult because you either need to have a massive amount of dots by yourself or you need to hire someone else to do it for you.
My recommendation would be to simply delegate, however, this isn’t exactly possible either since the minimum nominated requirement is currently 80 dots, which is over two thousand dollars.
I put them at number five because of their high entry barrier and their super long 28-day lock-up period
Number 4: SOLANA
This has been one of the hottest projects of 2021 so far and that should come as no surprise since it was handpicked by sam bank man freed and his formidable empire Solana is well known for utilizing their proof of history algorithm alongside proof of stake to create their blazing fast speed.
As for staking you need pretty expensive and fancy hardware to become a validator. I just recommend delegating instead their rewards rate is just okay though currently sitting at around six percent a year
but then when adjusted for inflation that drops down to about one percent that’s because the fees from staking providers are super high at about 10 on average but it still might be worth it to stake if their coin keeps rocketing.
it’s pretty simple just find a Solana wallet that supports staking and it shouldn’t take more than a few steps to get going the
the best part is that you maintain control over your funds the whole time there is no minimum amount like polka dot has and
your rewards are automatically reinvested. There is some risk of your funds being slashed if your validator acts maliciously but just choose a reliable one and you’ll be fine. they do have a two-day unlock period before you can move your delegated funds again all right you
Number 3: polygon
This is the popular second layer solution for Ethereum. Their most popular scaling solution is their proof of stakes sidechain, so since it’s proof of stake, they offer to stake as well.
You can stick Matic for anywhere between 520 to 5.2 annual returns and that depends on the percentage of all-matic that’s being stayed right now since around 38 of automatic estate your annual reward rate would be around 14 unadjusted.
you can stake using their web wallet in conjunction with something like metamask whether you want to validate or delegate their minimum is quite low as well just one matic and that comes with an unlocked period of 9 days they do have a limit of 100 validators though.
it’s pretty hard to get chosen and you might as well just delegate and accept the fee that comes with it lastly they do have slashing as well so just make sure you choose a good validator to go with or just do it on an exchange if you want to keep it simple.
Number 2: TARA
This is a project that wants to create a global payments network and has designed stable coins pegged to fiat currencies in a decentralized and algorithmic way.
their native token is called luna which is used for collateralizing their stable coins but you can also stake it since they are proof of stake after all now I’m gonna be real here it was incredibly difficult to find out exactly what the rewards rate is literally
Every site gave me different numbers per my best guess it is somewhere between six to ten percent per year and sometimes you see much higher numbers but those include the airdrops into their calculation.
There is a cool bonus of staking luna you get regular airdrops from their other projects within the terra ecosystem like anchor mirror etc. that’s pretty awesome and I like those other projects as well now for luna becoming a full-fledged validator is super hard because you got to be a crypto whale to even compete for one of the limited slots that can earn rewards.
You can just delegate instead, it’s super easy and only takes a few minutes to get started. They do have a 21-day lock-up period and validators who perform poorly may lose some of their coins.
As a delegator, I recommend you split your coins among several different validators for the best experience.
Number 1: CARDANO
I’ve been a critic of this project and not a fan of it personally but I gotta give them props for what they’ve done with staking
they lead all proof-of-stake projects in terms of total value state which is roughly 60 billion dollars worth at this time and that comes from 70 of all ADA being staked once.
it’s recommended to just delegate instead of running your staking pool and you can get roughly 6 annual returns with about 1.7 left after adjusting for inflation, not the best rewards rate but they do make it super easy to participate though, and also there’s no lock-up period.
you retain full control of your funds and there’s no slashing that you got to worry about it’s not surprising to me that a lot of people choose to stake their ADA now before I share which coin I’d want to stake
I have to point out that there are two other ways to make money that are kind of similar to staking but yet different the first is yield farming and that’s basically where you provide your coins as liquidity to some protocol like a dex
for example, they give you rewards for doing so now yield farming can be a bit riskier than staking on a layer 1 blockchain because this involves more complex smart contracts and whatnot but it could also get you way more returns.
you just gotta judge the risk and reward for yourself the second option is to lend your coins out to people who want to borrow them for whatever purpose and just like if they borrowed from a bank you would receive steady interest payment.
there are a ton of options for this in both the decentralized and
I have four pro tips for you before you start staking. First is that staking often requires running a machine 24 7. so I don’t blame you if you want to use a staking service
provider instead but those potentially have high fees and are riskier as well just choose them carefully. second is please don’t just rank all the staking coins by ROI and choose the highest ones
because those probably have zero liquidity and tiny market caps which means you can’t take profits effectively and they may be manipulated more easily as well so just keep that in mind.
third is that you got to keep in mind the lock-up period if you want to sell something quickly you might not be able to that’s why I recommend staking coins that you already plan on huddling for a long period.
lastly fourth is to go check out websites like stakingrewards.com or masari.io for more details about staking coins and what their latest reward rates are
if we take a step back we can see that the world of staking is quite young but also growing quickly as of mid-2021 there’s around 170 billion dollars worth of coins faked across the crypto world.
according to this report by a company called state so, there is a bright future for staking and it can be a lucrative part of your overall investment strategy.