What Is Crypto Staking and Is It Worth It?

What is Crypto Staking

Are you wondering what does staking mean in crypto? Today, we will go over the staking crypto meaning. 

Staking is a process that includes delegating your crypto assets to support a blockchain network and check transactions. The blockchain platform motivates stakers by rewarding them with digital tokens based on how many coins they have locked up. If a cryptocurrency you own allows staking, you will gradually earn a reward when some of your holdings are staked. 

The reason why crypto staking rewards are earned is that the cryptocurrency is put to work by the blockchain. Crypto that allows staking use Proof of Stake, which is a way they make sure that all transactions are secured and verified without a payment processor or bank in the middle.

Is Crypto Staking Worth It?

Crypto staking offers many benefits if you’re wondering, ‘Is staking crypto worth it?’. It is more environmentally friendly than mining crypto, you’re helping to maintain the efficiency and security of the blockchain, you don’t need any equipment for it as you would for crypto mining, and lastly, it is an easy way to earn interest on your cryptocurrency holdings. 

Best Crypto Staking Platforms

We want to share with you some of the best staking crypto sites where you can make a reasonable profit from putting your crypto holdings to work.

The interest rates can be pretty generous, and you can earn 10% to 20% per year. Some major cryptocurrencies you can stake are Solana, Polkadot, Cardano, and Etherium. 

Below, we will look at the best crypto staking platform, or more precisely, two of them.

Binance 

Binance is one of the best sites for staking crypto, and it is the largest crypto exchange by trading volume in the world. Binance allows you to start staking crypto on 11 DeFi Coins and 76 Locked Coins. You will find some of the best crypto staking coins in the Binance platform, and the rewards for crypto staking are pretty high.

For instance, the annual percentage yield, or APY, for the Luna Coin currently is at 25.39%. The Binance website has all of the yield rewards represented transparently. In addition, Binance offers a very flexible holding period. For instance, before your coins are transferred back to your Spot Waller, you can stake your coins for 90, 60, 30, or 15 days. 

Even though it might take some time to get used to the platform Binance, it provides many advanced features, and it is pretty straightforward to use. The whole process can be easily understood thanks to the transparency that the platform offers to its users. 

Kraken 

Kraken has over 80 cryptocurrencies with a wide range of options both for institutional investors and retail investors. Karen has a bit more reach than Binance when it comes to global support since the exchange currently supports traders in almost 200 countries. 

All clients can utilize Kraken’s staking rewards. Unlike Binance, Kraken doesn’t have a minimum staking time. What this means is that you can immediately earn your rewards. You can unstake your funds after a few hours and still get pro-rated rewards on the next payout date. 

All clients can also access the educational resources by Kraken, and they have Android and iOS mobile app access. 

Risks of Crypto Staking

Surely, some of you are wondering, ‘Is staking crypto safe?’. There are some risks when it comes to staking crypto that we would like to mention. The first one is, there might be an unstaking period that lasts seven days or more when you want to unstake your crypto. 

Secondly, there is a minimum amount of time that staking requires you to lock up your coins for. You’re not able to do anything with the assets you’ve staked during that period, like sell them. 

Lastly, the prices of crypto can drop quickly and are volatile. If there is a large price drop in the assets you’ve staked, this could outweigh any interest you earn on them. The latter is the most significant risk you can face with crypto staking.

Conclusion

Considering the returns you can make, it is definitely worth researching cryptos with staking. In addition, it can get you involved in the validation and governance side of blockchain networks, which may be something of interest to certain investors. 

If you want to find the best crypto exchange for you, check out our crypto exchange comparison tool!