Crypto staking is gaining traction with cryptocurrency investors. One reason for this is that it enables holders to earn money passively. In addition to stacking pools and wallets, an increasing number of exchanges are jumping on the staking bandwagon.
Increased interest was recently demonstrated by a Binance Research research, which revealed that the total amount staked reaches $6.4 billion.
What Exactly Is Crypto Staking?
Staking, in its simplest form, entails the investor “locking” a specified number of coins that use the Proof-of-Stake consensus process or one of its variants. While the many PoS-based blockchains refer to them differently, token holders who “stake” a particular amount of their coin typically receive the opportunity to vote and participate in the network’s governance. They are paid for staking that amount without utilizing it. As a result, staking can become quite profitable
There are several different forms of Proof-of-Stake consensus algorithms, the most common of which is the Delegated Proof-of-Stake method (DPoS). Users can commit their balances to DPoS as votes, which are then utilized to select a predetermined number of delegates. These delegates are responsible for managing the blockchain’s operations on behalf of the individuals who voted for it.
Staking On Wallets
Crypto investors can store their coins in dedicated wallets and participate actively in the staking effort. Typically, this occurs as part of staking pools, however certain wallets allow for easy staking of your coins.
When it comes to digital asset storage, the Ledger hardware wallet is one of the most popular options. It supports staking via Ledger Live or other wallet apps.
The first approach entails installing the cryptocurrency application on the smartphone and creating an account on Ledger Live. Following that, funds should be moved, and staking should be initiated automatically.
The second option is similar, except the user must choose a suitable third-party wallet to manage the assets after installing the Ledger Live app. Following that, monies should be sent and users can begin earning rewards.
Additionally, Ledger is a cold-storage wallet, which is typically considered to be the more safe alternative due to the fact that it is a physical offline device.
According to Mattia Sarfati of Ledger’s Growth Marketing, “you can currently only stake Tezos within the Ledger live.”
“However, you can stake additional coins with the use of third-party wallets (like TRX using TronScan wallet). Our intention is to establish this future in the near future within Ledger Live.”
Exodus is a popular multi-currency wallet that is available on both desktop and mobile platforms. Additionally, its app can be simply coupled with Trezor’s hardware wallet.
Following a recent agreement with Switching, the Exodus wallet now supports cryptocurrency staking. The previous version included a staking fixed-rate exchange API for wallet users.
Additionally, Switchain’s system is meant to store data rather than to have custody of it; as a result, it operates in a “non-custodial” manner.
The wallet initiates an exchange on the user’s behalf, sending the coins and receiving the previously swapped assets. The entire operation takes only a few minutes.
Currently, the Exodus wallet supports Ontology and Neo staking incentives, with other coins scheduled to be introduced soon.
Atomic Wallet is another excellent multi-currency wallet that runs on Windows, macOS, Ubuntu, Debian, and Fedora, as well as on Android and iOS mobile devices.
To utilize the staking function, funds should be transferred to the staking address provided by the wallet. Once the investor receives the incentives, he or she can convert them to fiat currency or another digital asset, or even utilize them directly using the built-in cryptocurrency exchange.
Atomic Wallet supports Tezos, Cosmos, NEO, VeChain, and Ontology staking.
Trust Wallet is a “safe multi-coin wallet” that can be installed on Android and iOS mobile devices. Binance purchased Trust Wallet last year to bolster the security of its rapidly growing user base.
Trust Wallet’s setup process is similar to that of other wallets in the category – after downloading and installing it on the device, the user must send cryptocurrency to the provided staking address.
Trust Wallet supports a diverse range of cryptos for staking, including VeChain, TRON, Callisto, TomoChain, Tezos, Cosmos, IoTeX, and Algorand.
Additional Staking Methods: Exchanges and Pools
Another possibility is to stake on cryptocurrency exchanges. The largest cryptocurrency exchanges have recognized the trend and now provide a vast selection of cryptocurrencies eligible for on-exchange staking.
Crypto staking is supported by a number of exchanges, including Binance, Coinbase, Kraken, OKEx, KuCoin, Huobi, Bithumb, and Poloniex. Additionally, some of them offer no-fee staking for specific coins.
Additionally, users can join staking pools, which enable several stakeholders to pool their resources in order to maximize stacking benefits and fulfill the required minimum amount.
Each stacking pool is managed by its own operator, and stakeholders who wish to join must lock their coins to the pool’s stacking address. Due to the fact that it is a smart contract, the coins are regarded to be safe, far safer than they would be on an exchange.