The 10 Best Crypto Staking Platforms to Use in 2024

Staking generates passive rewards and is an ideal solution for long-term crypto investors, leaving enthusiasts searching for the best crypto staking platforms to earn healthy APYs.

This guide will review the 10 best crypto staking platforms from the leading staking providers for supported coins, average APYs, withdrawal terms, security, and accessibility. I also explain how crypto staking works, the benefits and risks, and how to get started in under 10 minutes.

The Best Crypto Staking Platforms to Use Right Now

Listed below are the 10 best crypto staking platforms for 2024:

Reviewing the Top Cryptocurrency Staking Sites

I’ll now review the best staking crypto platforms listed above. Read on to choose the most suitable staking site for your needs.

1. eToro –  Top Exchange Supports Copy Trading Tool

eToro remains a standout platform for UK investors and beyond, particularly when it comes to staking your crypto assets. Known for its robust security measures, eToro ensures that your investments are well-protected. The platform implements two-factor authentication (2FA) and stores assets in cold wallets, adding an extra layer of security. Additionally, client funds are held in segregated bank accounts, giving you peace of mind.

eToro is also incredibly user-friendly, making it an excellent choice for beginners. Setting up an account, depositing funds, and starting your crypto staking journey takes just minutes. With nearly 100 cryptocurrencies supported, including popular options like Bitcoin, Ethereum, Solana, and Cardano, eToro offers great flexibility for diversifying your staking portfolio.

One of the platform’s key features is its CopyTrader™ service, allowing you to mirror the strategies of successful crypto traders. This can be particularly beneficial for those new to staking or looking to learn from more experienced investors. However, it’s important to note that eToro’s fees are slightly higher than some other platforms. For example, U.S. dollar deposits via wire transfer are free, but there is a 0.5% fee for deposits made with a debit/credit card or PayPal. Additionally, there’s a 1% commission on crypto trades.

Staking Site	Top Bitcoin APY	Top Stablecoin APY	Staking Terms
eToro	Up to 2.4% APY	N/A	Staking available on select cryptocurrencies (notably Cardano and Ethereum); staking rewards are automatically earned with no lock-up periods, and eToro handles the technical aspects, making it easy for users.

eToro Key Features:

• Diverse Range of Supported Cryptos: With 99 different coins available for trading and staking, eToro offers one of the broadest selections in the market. This variety allows you to choose the best assets for staking based on your investment goals.
• Regulation and Security: eToro operates under stringent regulatory oversight, ensuring that your funds are secure. The platform is regulated by top-tier financial authorities, which adds an extra layer of trust and safety for your staking activities.
• User-Friendly Interface: eToro’s platform is designed with the user in mind. Whether you’re accessing it via the web or mobile app, you’ll find it easy to navigate, even if you’re new to crypto staking.
• Educational Resources: If you’re new to staking, eToro offers a wealth of educational resources, including guides, webinars, and market analysis. These tools are invaluable for making informed decisions and maximizing your staking returns.
• Low Minimum Investment: You can start staking with as little as $10 (around £8), making eToro accessible to a wide range of investors, from beginners to those with more substantial portfolios.

Pros

• Excellent for beginners with a user-friendly platform
• Supports 99 different cryptocurrencies
• Low minimum staking requirement of $10
• Copy experienced crypto traders’ staking strategies
• Secure wallet storage with 2FA protection

Cons

• Higher fees, with a 0.5% charge on USD deposits made via debit/credit card or PayPal
• 1% commission on crypto trading

Visit eToro

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2. MEXC – A Great Option for Staking Stablecoins, USDT Pays up to 8.8%

MEXC is the best crypto staking platform for stablecoins. You’ll earn much higher yields than other platforms; USDT generates APYs of up to 8.8%. What’s more, USDT staking plans are flexible. This means you can withdraw the USDT tokens at any time. However, do note that MEXC has a tiered system on USDT plans.

Only the first 300 USDT earns 8.8%. Anything between 300 and 1,000 USDT earns 1.5%. Deposits above 1,000 USDT earn just 0.8%. MEXC also offers high APYs on standard cryptocurrencies. For example, you’ll get up to 10% on Toncoin and 6% on XRP. Ethereum is also competitive at 4.8%. However, Bitcoin yields just 1.8%.

MEXC distributes staking rewards daily, which is another plus point. When you’re not staking coins, MEXC is also a great option for trading. It offers over 2,000 crypto markets, including some of the best altcoins. It supports spot trading and leveraged futures of up to 200x. MEXC commissions are some of the lowest in the market.

Staking Site	Top Bitcoin APY	Top Stablecoin APY	Staking Terms
MEXC	1.8%	8.8%	Most coins come without lock-up terms. Rewards are paid daily.

MEXC Key Features:

• Wide Range of Supported Cryptos: MEXC supports over 1,100 cryptocurrencies, offering a broad selection for trading and investment, which is ideal for investors looking to explore a wide array of assets.
• Spot and Futures Trading: MEXC provides robust trading features, including spot trading, futures trading, and margin trading, catering to both beginners and advanced users.
• MEXC Earn: MEXC’s Earn platform allows users to stake various cryptocurrencies and earn competitive interest rates, with flexible and fixed-term options available to suit different investment strategies.
• Global Accessibility: MEXC is available in over 170 countries, making it a highly accessible platform for traders and investors around the world.

Pros

• Earn up to 8.8% when staking USDT
• Withdraw coins at any time without penalties
• Receive staking payments daily
• One of the largest crypto exchanges globally
• Offers rock-bottom trading commissions

Cons

• Only the first 300 USDT earns the top-tier rate
• USDC yields just 0.85%

Visit MEXC

3. OKX – Comprehensive Crypto Staking and Trading Platform

OKX also makes my list of top crypto staking sites. While OKX is a popular centralized exchange, it also offers a decentralized ecosystem. It comes in-built with a bridge aggregator. In simple terms, this means OKX obtains staking yields from hundreds of external pools. Each pool operates a decentralized framework, meaning staking transactions are backed by smart contracts.

There is no requirement to leave the OKX platform. Simply search for your preferred staking coin and review the best pools. Once you’ve connected a wallet to OKX, you can begin staking straightaway. To offer some insight into yields, USDT offers a maximum APY of 38.37%. Some pools have limited liquidity though, so are less reputable than other providers.

Another of the things that’s worth checking out is OKX’s Dual Investment product, which offers higher potential returns by allowing users to invest in two assets at the same time. This is great news for more experienced traders looking to maximize their profits through strategic investments. You can also find a Spot and Derivatives market, catering to advanced traders who want to engage in futures, options, and margin trading.

OKX Key Features:

• Wide Range of Supported Cryptos: OKX supports over 300 cryptocurrencies, offering a broad selection for trading and staking, which is ideal for investors looking to diversify their portfolios.
• Flexible Staking and Savings Options: The OKX Earn feature provides flexible staking options, allowing users to choose between different lock-up periods to maximize their returns while maintaining control over their assets.
• Advanced Trading Features: OKX offers a comprehensive suite of trading tools, including spot, futures, and margin trading, as well as a Dual Investment product for higher returns, catering to both beginners and advanced traders.
• Strong Security Measures: OKX employs top-tier security protocols, including multi-factor authentication, cold storage, and real-time asset monitoring, ensuring the safety of user funds.
• User-Friendly Platform: Despite its advanced features, OKX maintains a user-friendly interface that makes it accessible to both novice and experienced crypto traders.

Pros

• Supports over 300 cryptocurrencies for trading and staking
• Flexible staking options with competitive APYs
• Advanced trading tools including futures, options, and Dual Investment
• Strong security measures, including cold storage and real-time monitoring
• User-friendly platform with a clean, intuitive interface

Cons

• Staking rewards and availability can vary depending on market conditions
• Some advanced features may have a steep learning curve for beginners
• Limited availability of customer support in some regions
  Visit OKX

4. Margex – The Overall Best Crypto Staking Site for 2024

Margex is considered one of the best crypto leverage trading platforms. The platform offers competitive staking yields for long-term holders. A very good example of this is the 3% APYs you get on Bitcoin, with 4.7% on Ethereum. Chainlink is also competitive, at 3%.

If you’re looking to generate passive rewards without volatility, Margex offers 5% on USDT and USDC. Here’s the standout feature; Margex enables you to trade while coins are being staked. This offers much-needed liquidity, rather than the coins being locked. Best of all, staking yields are credited daily. The funds can be reinvested, allowing you to compound the returns.

In terms of trading, Margex specializes in perpetual futures. These derivative products allow you to trade with leverage of up to 100x. All markets support long and short trading. Commissions at Margex cost just 0.06%. Traders have access to plenty of analysis tools, including indicators and charts. There are no KYC requirements when joining Margex. If you want to learn more about this highly-rated exchange, we go into more detail in our dedicated Margex Review.

Staking Site	Top Bitcoin APY	Top Stablecoin APY	Staking Terms
Margex	3%	5%	No lock-up terms. Staked coins can be traded. Rewards are paid daily.

Margex Key Features:

• No KYC Required: Margex allows users to trade without mandatory KYC (Know Your Customer) verification, offering a higher level of privacy for those who value their anonymity in the crypto space.
• Customizable Leverage: Traders can choose their leverage level on Margex, from 5x to 100x, providing flexibility to align with their risk tolerance and trading strategy.
• Proprietary MP Shield™ System: Margex’s unique MP Shield™ system is designed to prevent price manipulation by aggregating liquidity from multiple providers and filtering out suspicious trading activities, ensuring a fair trading environment.
• Competitive Fees: Margex offers competitive trading fees, with transparent pricing and no hidden costs. This makes it an attractive option for both casual and high-volume traders.

Pros

• The overall best crypto staking platform in 2024
• Offers APYs of up to 5%
• No lock-up terms
• Staked coins can be used to trade
• Rewards are distributed daily
• Also one of the best no KYC crypto exchanges

Cons

• Currently supports just five staking coins
• Doesn’t support spot trading markets

Visit Margex

5. Binance – Popular Staking Platform Offering Enhanced Yields on Longer Lock-Up Periods  

Binance is best known for its low-cost, high-volume trading platform. That said, Binance also offers some of the best crypto staking rewards – especially for long-term investors. This is because Binance offers enhanced staking yields when the coins are locked for longer periods. For instance, you’ll earn Solana APYs of just 0.9% on flexible plans.

However, this increases to 8.9% when opting for a 120-day lock-up period. Similarly, Sui yields start from just 1.41% on flexible plans. In contrast, locking the coins for 120 days increases the yield to 9.6%. Binance also offers competitive staking rewards on stablecoins. USDT and USDC pay over 10% and 8%, respectively.

If you’re an American trader, Binance has a separate US platform. This comes with different yields and there’s no support for stablecoins. That said, you can earn up to 10.8% on Kusama, and 12.2% on Polkadot. Ultimately, Binance is the best option if you’re looking to combine competitive staking rewards with a top-rated trading platform.

Staking Site	Top Bitcoin APY	Top Stablecoin APY	Staking Terms
Binance	0.32%	10.02%	Most staking coins come with multiple lock-up options, ranging from flexible to 120 days. Reward distributions depend on the pool.

Binance Key Features:

• Extensive Cryptocurrency Support: Binance offers one of the largest selections of cryptocurrencies, with over 350 assets available for trading, making it a go-to platform for those looking to diversify their portfolios.
• Advanced Trading Tools: Binance provides a comprehensive suite of trading tools, including spot, margin, futures, and options trading, catering to both beginners and advanced traders.
• Binance Earn: Users can earn passive income through a variety of staking options, savings accounts, and liquidity pools with flexible and fixed-term options offering competitive APYs.
• Binance Smart Chain (BSC): A fast and low-cost blockchain that supports decentralized finance (DeFi) projects, NFT markets, and more, giving users access to a wide range of decentralized applications.

Pros

• Earn high APYs when locking up coins for longer periods
• USDT deposits pay 10.02% on a 120-day term
• Supports a wide range of altcoins
• Offers a staking rewards calculator
• Also one of the best exchanges for spot trading

Cons

• The maximum Bitcoin APY is 0.32%
• Flexible plans often come with low yields

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6. Gate.io – Low Trading Fees and Vast Selection of Cryptocurrencies and Stablecoins    

Gate.io has earned its place as a leading platform for crypto trading and staking, particularly for users looking to explore a wide variety of digital assets. With support for over 1,400 cryptocurrencies, Gate.io offers one of the most extensive selections in the market, allowing users to diversify their portfolios with ease. The platform’s HODL & Earn program is particularly notable, offering users the opportunity to earn rewards on their crypto assets through flexible and fixed-term staking options.

 

 

 

Gate.io also provides a Liquidity Mining feature, allowing users to earn additional rewards by providing liquidity to various trading pairs on the platform. This feature, along with Gate.io’s Margin Trading and Futures markets, caters to advanced traders looking to maximize their returns through a variety of trading strategies.

Gate.io Key Features:

• Extensive Cryptocurrency Support: Gate.io supports over 1,400 cryptocurrencies, offering one of the most comprehensive selections in the industry, which is ideal for investors looking to diversify across multiple assets.
• HODL & Earn Program: This program offers competitive APYs on a variety of cryptocurrencies with both flexible and fixed-term staking options, allowing users to choose the terms that best suit their investment strategy.
• Advanced Trading Features: Gate.io offers a range of advanced trading tools, including margin trading, futures, and liquidity mining, making it a versatile platform for experienced traders.
• Strong Security Measures: The platform uses industry-standard security protocols, including 2FA, cold storage, and encryption, ensuring the safety of user funds.

Pros

• Supports over 1,400 cryptocurrencies for trading and staking
• Competitive APYs through the HODL & Earn program
• Advanced trading features including margin trading, futures, and liquidity mining
• Strong security measures, including cold storage and 2FA
• User-friendly platform with extensive educational resources

Cons

• Staking rewards can fluctuate based on market conditions
• Some advanced features may require a learning curve for beginners
• Customer support can be limited during peak times

Visit Gate.io

7. ByBit – Earn Staking APYs of 4.5 and 10% on Bitcoin and Selected Stablecoins 

ByBit offers a wide range of trading and staking options with a commitment to security and user experience. On this platform you can find the much-touted Flexible Staking program, which allows users to earn interest on their crypto assets without committing to long-term lock-ups. This feature is particularly appealing to users who want to maintain liquidity while earning rewards.

 

Bybit is another staking platform where you can find both flexible staking and DeFi Mining. With this second feature, users can participate in decentralized finance (DeFi) projects to earn higher returns through liquidity provision. This makes Bybit an attractive platform for those interested in maximizing their earnings through a combination of trading, staking, and DeFi participation.

Staking Site	Top Bitcoin APY	Top Stablecoin APY	Staking Terms
ByBit	Up to 4.5% APY	Up to 10% APY	Flexible staking with no lock-up periods for easy withdrawal; DeFi Mining offers higher returns with varying terms depending on the project.

ByBit Key Features:

• Flexible Staking Options: Bybit’s flexible staking program offers competitive APYs on a variety of cryptocurrencies, allowing users to earn rewards while keeping their assets liquid.
• Advanced Trading Features: Bybit provides a comprehensive suite of trading tools, including spot trading, derivatives, and margin trading, catering to both beginners and experienced traders.
• DeFi Mining Opportunities: Bybit’s DeFi Mining feature enables users to participate in DeFi projects, offering the potential for higher returns through liquidity provision and staking.
• Robust Security Measures: Bybit employs top-notch security protocols, including multi-signature wallets, 2FA, and cold storage, ensuring that user funds are protected against potential threats.

Pros

• Flexible staking with competitive APYs
• Advanced trading tools including spot, derivatives, and margin trading
• DeFi Mining for higher potential returns
• Strong security protocols, including cold storage and multi-signature wallets
• User-friendly platform with a clean interface

Cons

• Staking rewards may vary based on market conditions
• Some advanced features may be challenging for beginners
• Limited customer support during high-traffic periods

Visit ByBit

8. Nexo – Competitive Interest Rates and Great Range of Cryptocurrencies     

Nexo has earned its reputation as a trusted platform for crypto enthusiasts interested in trading and staking their digital assets. The trading platform is easy to use, making it accessible for beginners. Nexo supports over 60 cryptocurrencies, including popular options like Bitcoin, Ethereum, and Polkadot, providing ample opportunities for portfolio diversification.

One of Nexo’s standout features is its Earn Interest program, which allows users to earn up to 12% APR on their crypto holdings. This can be particularly attractive for those looking to maximize their returns through staking. Nexo also offers instant crypto credit lines, enabling users to borrow against their crypto assets without selling them.

 

Security is a top priority at Nexo, with the platform utilizing military-grade 256-bit encryption, two-factor authentication (2FA), and insurance on custodial assets up to $775 million, ensuring your investments are safe and secure.

Staking Site	Top Bitcoin APY	Top Stablecoin APY	Staking Terms
Nexo	Up to 7% APY	Up to 12% APY	Flexible staking terms with no lock-up periods for flexible staking; higher APY available when opting for fixed-term staking or holding NEXO tokens.

 

Nexo Key Features:

• High-Interest Earnings: Nexo offers competitive interest rates on a variety of cryptocurrencies, making it an attractive option for those looking to earn passive income through staking.
• Robust Security Measures: Nexo prioritizes the security of your assets, offering insurance on custodial holdings and employing top-tier encryption technologies to protect your funds.
• User-Friendly Interface: Nexo’s platform is designed to be intuitive and easy to navigate, whether you’re accessing it via a web browser or mobile app. This makes it a great choice for both beginners and seasoned investors.
• Wide Range of Supported Cryptos: With support for over 60 cryptocurrencies, Nexo provides a wide array of options for trading and staking, allowing you to diversify your portfolio with ease.
• Instant Crypto Credit Lines: Nexo’s crypto-backed credit lines allow you to borrow against your holdings without the need to sell your assets, providing liquidity while you continue to earn on your investments.

Pros

• Competitive interest rates up to 12% APR on crypto holdings
• Insurance on custodial assets up to $775 million
• Supports over 60 cryptocurrencies for trading and staking
• User-friendly platform with an intuitive interface
• Instant crypto credit lines for borrowing against your assets

Cons

• Interest rates vary depending on the type of cryptocurrency and staking duration
• Some features, like the highest interest rates, require holding NEXO tokens
• Withdrawal fees can apply depending on the chosen cryptocurrency

Visit Nexo

9. KuCoin – A Versatile Crypto Trading and Staking Platform

Known for its wide range of supported assets, competitive staking rewards, and advanced trading features, KuCoin meet the needs of both novice and seasoned crypto investors. This staking platform has established itself as a go-to platform for crypto enthusiasts, particularly those interested in trading and staking a diverse range of digital assets. Security is a priority on KuCoin, with features such as industry-standard encryption, multi-factor authentication (MFA), and insurance funds designed to protect user assets against potential breaches.

 

One of the key strengths of KuCoin is its extensive selection of supported cryptocurrencies, with over 700 assets available for trading and staking. This makes it one of the most versatile platforms in the crypto space, allowing users to diversify their portfolios easily.

KuCoin also offers a Soft Staking program, which allows users to earn rewards on their idle assets without having to lock them up. This flexibility is particularly appealing to those who want to maintain liquidity while still earning a return on their investments. Additionally, KuCoin’s Trading Bot feature helps automate trading strategies, making it easier for users to optimize their trading activities without constant monitoring.

KuCoin Key Features:

• Extensive Asset Selection: KuCoin supports over 700 cryptocurrencies, providing one of the broadest selections in the industry. This allows users to explore a wide range of assets for both trading and staking.
• Flexible Staking Options: KuCoin’s Soft Staking program offers competitive rewards without the need to lock up assets, giving users the flexibility to withdraw or trade their staked assets at any time.
• Advanced Trading Features: KuCoin caters to experienced traders with advanced tools like margin trading, futures, and the Trading Bot, which automates strategies to maximize returns.
• Security and Protection: KuCoin employs multiple layers of security, including encryption, multi-factor authentication, and an insurance fund to safeguard user assets, providing peace of mind for traders and stakers alike.
• User-Friendly Interface: Despite its advanced features, KuCoin maintains a user-friendly interface that is accessible for beginners while offering the depth and functionality needed by more experienced users.

Pros

• Supports over 700 cryptocurrencies for trading and staking
• Soft Staking program with no lock-up periods
• Advanced trading features including margin trading and futures
• Automated Trading Bot for optimized trading strategies
• Strong security measures, including insurance for user assets

Cons

• Staking rewards may vary depending on the asset and market conditions
• Customer support response times can sometimes be slow
• Some features may be complex for beginners without prior trading experience

Visit KuCoin

10. Bitrue – Novel Staking Options Including DeFi Yield Farming

Bitrue is a reliable platform for crypto enthusiasts, offering a solid blend of security, diverse asset offerings, and innovative staking options. For instance, its Power Piggy program allows users to earn interest on a variety of cryptocurrencies with flexible staking options. This option is particularly popular among users looking to earn passive income without locking up their assets for extended periods.

 

It also boasts a feature called BTR Lockups, which provide even higher returns for users willing to stake their assets for fixed periods. Additionally, Bitrue’s Yield Farming Hub enables users to participate in decentralized finance (DeFi) yield farming, further enhancing their earning potential through various DeFi projects.

Bitrue Key Features:

• Power Piggy Program: This flexible staking option allows users to earn interest on their crypto holdings without long-term lock-ups, making it an attractive choice for those who want to maintain liquidity.
• BTR Lockups: For users willing to commit to longer staking periods, BTR Lockups offer higher returns, providing a lucrative option for those looking to maximize their earnings.
• Wide Range of Supported Cryptos: Bitrue supports over 200 cryptocurrencies, giving users the ability to trade and stake a diverse array of digital assets.
• Security and Protection: Bitrue employs strong security measures, including 2FA, SSL encryption, and cold storage, ensuring that user funds are well-protected against potential threats.

Pros

• Flexible staking options with the Power Piggy program
• Higher returns available through BTR Lockups
• Supports over 200 cryptocurrencies for trading and staking
• Strong security measures including cold storage and 2FA
• User-friendly interface with innovative features like yield farming

Cons

• Staking rewards can fluctuate depending on market conditions
• Higher returns on BTR Lockups require longer commitment periods
• Customer support may not always be responsive during peak times

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The Basics of Staking Crypto

In simple terms, staking in crypto is a passive investing tool. It enables crypto investors to generate a yield on their holdings. This means investors can increase the number of coins they own. This is similar to depositing cash in a savings account. However, not all cryptocurrencies can be staked. On the contrary, staking coins must operate on the proof-of-stake network.

Fortunately, this covers thousands of cryptocurrencies. For example, Ethereum is a proof-of-stake network, meaning most ERC-20 tokens can be staked. This includes Tether, Aave, Chainlink, and Maker. Similarly, other leading networks also offer staking capabilities. This includes BNB Chain, Solana, and Avalanche.

The main exception is Bitcoin, which operates on the proof-of-work network. That said, it’s still possible to earn yields on Bitcoin – you simply need to use a third-party platform. Options include eToro, MEXC, and OKX. Ultimately, staking is considered a great option for long-term investors who want to compound their returns.

How Does Cryptocurrency Staking Work?

Staking opportunities come with varying terms and conditions. For instance, some staking pools have a minimum holding period, while others offer flexible withdrawals. Yields are often dependent on the lock-up term. Investors should also be aware of fees, and how frequently rewards are distributed. Let’s take a much closer look at how crypto staking works.

Proof-of-Stake Consensus 

Staking rewards are offered by proof-of-stake networks like Ethereum and Solana. Investors deposit their tokens into the network, which remain locked for a certain number of days. This helps keep the network secure and stable. After the staking period is over, investors receive their coins back. This includes the principal and the staking rewards generated.

As I explain in more detail later, most investors opt for off-chain staking, as the rewards are higher. This means a third-party platform is used, like a crypto exchange. This is also a more user-friendly option, as you don’t need to directly engage with the network.

What’s more, on-chain staking often comes with much higher minimums. Nonetheless, staking rewards are covered by network inflation. This is because proof-of-stake networks issue new coins when blocks are confirmed. For example, new ETH enters circulation approximately every 12 seconds.

Lock-Up Terms

Investors should understand the lock-up terms when staking cryptocurrency. This will vary depending on the staking coin and the chosen platform. For example, some staking pools offer flexible plans. This means you can withdraw your coins at any time – without financial penalty. This is like depositing funds in a traditional checking account.

However, similar to a certificate of deposit (CD), some staking pools come with a minimum lock-up term. This might be days, weeks, or a few months. Some platforms offer various lock-up periods. In many cases, longer terms come with the highest yields. However, you can’t withdraw coins while they’re locked, so do bear this in mind.

Staking APYs

Staking rewards are determined by the annual percentage yield (APY). This dictates how much you’ll earn over a 12-month period. Crucially, the staking rewards are paid in the respective cryptocurrency.

So, if you’re staking Solana, your rewards will be paid in SOL. This is ideal if you’re a long-term holder. After all, if the value of the cryptocurrency increases, your returns will be amplified. This is because the principal investment and the staking rewards benefit from price increases.

Let’s look at an example of how staking rewards work:

• Let’s say you have 10 SOL.
• At the time of the deposit, 1 SOL = $200. This means your Solana investment is worth $2,000
• You choose a staking pool that pays an APY of 10%
• After one year, you’ve earned staking rewards of 1 SOL (10% of the 10 SOL deposit)
• You unstake your coins, so you now have 11 SOL

The price of SOL has since increased to $300

• So, your original 10 SOL was worth $2,000. It’s now worth $3,000
• The 1 SOL you earned from staking rewards is worth $300
• This means your SOL portfolio is now valued at $3,000

The best crypto staking platforms make daily distributions. This means you’ll receive staking rewards daily, which can then be reinvested into the same pool. In turn, the newly earned coins will also generate staking returns. This increases the APY, as you’re compounding your investments.

Crypto Mining vs Staking

Mining and staking are two different ways to earn income from crypto.

• Mining is associated with proof-of-work blockchains, which include Bitcoin.
• It requires specialist hardware devices (like ASICs) to verify transactions.
• The first miner to solve the cryptographic problem earns the block rewards.
• Then the process starts again.
• Mining helps keep the blockchain safe, but it’s energy-intensive.
• What’s more, mining isn’t completely passive like staking. Miners must take into account maintenance and constant monitoring.

In contrast, staking offers an energy-efficient way to verify blockchain transactions. It’s also fairer and more inclusive, as everyone has a chance to earn staking rewards. This is unlike mining, as only one person can solve a block.

On-Chain & Off-Chain Staking

I’ll now explain the difference between on-chain and off-chain staking.

• On-Chain Staking: On-chain staking removes the middleman; you’ll be engaging directly with the blockchain network. This means your staking coins are held by the blockchain, rather than a third party. This is the safest option, as you’re removing counterparty risks. However, on-chain staking often comes with high minimum and lower APYs.
• Off-Chain Staking: Off-chain staking is the most popular option for retail investors. It enables users to stake their coins through a third-party platform. This is usually a reputable exchange like eToro or MEXC. Off-chain staking comes with small minimums and higher APYs. However, you need to trust that the platform is keeping your coins safe.

The choice between on-chain and off-chain staking is a personal one. For instance, on-chain staking comes with greater responsibilities – as you often need to become a validator. If you suffer downtime, you could be penalized. This means losing your original staking deposit. Nevertheless, on-chain staking is still considered the most secure option

If you’re looking for a hassle-free way of staking coins, off-chain platforms might be the better option. You won’t need to become a validator or meet a high minimum deposit. And, you’ll benefit from more competitive yields. However, make sure you’re using a safe staking platform. And ensure your funds are diversified across several providers.

Benefits of Staking Crypto

Recently, crypto staking has emerged as one of the most popular ways to participate in network validation to earn passive rewards. With the crypto sector continuing to evolve, staking has witnessed a spike in adoption, with crypto enthusiasts taking full advantage of the perks that come with staking. I’ll now discuss the core benefits of staking cryptos.

Earn Passive Income

Staking enables investors to earn passive income. Similar to savings accounts, you’ll earn a percentage of your original deposit. Without a staking pool, your coins won’t earn anything. Therefore, it makes sense to generate additional yields, rather than leave the coins in a private wallet.

For example, suppose you own $10,000 worth of Bitcoin:

• We’ll say the price of Bitcoin doesn’t move after one year
• Had you kept the Bitcoin in a private wallet, it would still be worth $10,000
• Had you deposited the Bitcoin in a Margex staking pool, you’d have earned 3%. That’s an extra $300 worth of Bitcoin.

Just remember, you’ll still benefit from price increases when staking crypto. This enables you to generate returns on two fronts; price appreciation and passive staking rewards.

Flexible Terms are Available

Flexible staking terms are available if you know where to look. For example, with the exception of Toncoin, MEXC offers flexible withdrawals on all supported staking coins.

This includes everything from Bitcoin, Ethereum, and USDT to XRP, Gala, and dYdX. As such, investors can withdraw their coins at any time. This ensures that investors can access liquidity whenever they need it.

Create a Compounding Returns

Staking enables you to create compounding returns – especially when distributions are made daily. This involves reinvesting your rewards back into the same staking pool. This means you’re earning ‘interest on the interest’.

For example:

• Suppose you’ve deposited 100 AVAX into a staking pool
• The staking pool pays 20%
• After one year, you’ve earned staking rewards of 20 AVAX, which you reinvest
• This means you’ve now got 120 AVAX
• You earn another 20% in year two
• This time, you’ve earned staking rewards of 24 AVAX
• This is because the 20% rewards are based on 120 AVAX, not the original 100 AVAX

Repeating this process over time can generate significant returns. This is the same as reinvesting stock and ETF dividends.

How to Stake Cryptocurrency

If you’re new to cryptocurrency staking, here’s a quick overview of the process:

• Step 1: Choose a Staking Platform – The first step is to choose a crypto staking platform. It should support your preferred coins, pay competitive APYs, and offer suitable withdrawal terms.
• Step 2: Deposit Staking Coins – You’ll need to deposit coins before you can begin staking. The staking platform will provide you with a unique wallet address. Copy it and transfer the coins from a private wallet. If you don’t own any staking coins, you can buy some from eToro or MEXC with a debit/credit card.
• Step 3: Choose Staking Pool – Next, choose the best staking pool for your requirements. Some platforms offer multiple lock-up terms. Make sure the terms align with your investing goals.
• Step 4: Receive Staking Rewards – Once your coins have been added to the staking pool, there’s nothing else to do. The platform will distribute the staking rewards to your account. This could be daily, bi-weekly, weekly, or monthly depending on the platform.
• Step 5: Withdraw Staking Coins – The final step is to withdraw your staking coins. You can do this at any time if you’re using a flexible staking pool. If not, you’ll need to wait for the respective staking term to pass.

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To reduce the counterparty risk, consider joining several staking platforms. You can split the staking coins accordingly. For example, suppose you’ve got 10 ETH to stake. Consider depositing 2.5 ETH on four different staking sites.

Crypto Staking Taxes

In most countries, including the US, staking is a taxable event. It’s treated the same as other income sources, such as salaries. This means the staking rewards will be added to your total income for the year.

For example:

• Salary: $50,000
• Staking Rewards: $5,000
• Total Taxable Income: $55,000

Now for the challenging part; you’ll need to report the value of the staking rewards based on when they were received. So, if you’re receiving daily payouts, that’s up to 365 different valuations after one year.

Crypto prices change every second and can witness enhanced volatility. I’d suggest using crypto tax software if you’re a long-term staker. It will automatically assign a cost basis for each staking distribution.

Is Staking Crypto Safe?

Crypto staking isn’t a risk-free income source. Far from it.

• Counterparty Risks: If you’re opting for off-chain staking, counterparty risks are your biggest concern. If the crypto exchange becomes insolvent, you could lose your entire staking balance. This is why I suggested using multiple staking platforms to diversify the risk.
• On-Chain Risks: On-chain staking isn’t risk-free either. For instance, on-chain validators can lose their staking deposit if they’re considered unreliable. This could simply be because the validator experienced downtime.
• Liquidity Risks: You’ll also need to consider liquidity risks. For example, when searching for the highest APY crypto staking site, you might find that minimum lock-up terms are required. No matter the circumstances, you won’t be able to withdraw the coins until the lock-up period has passed.

Ultimately, all investments carry risk, so make sure you’re well-informed before staking.

Conclusion

In summary, staking is ideal for long-term crypto investors who want to generate passive returns on their holdings. My overall top pick is eToro, which offers competitive yields on a number of cryptocurrencies, especially Ethereum and Cardano.

Unlike other platforms, eToro enables you to stake with a very low minimum amount, $10 in this case. This means it is suitable for all pockets and investors who are just starting out, as well as veteran traders.

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FAQs

What is Crypto Staking?

Crypto staking involves locking up your cryptocurrency in a Proof of Stake (PoS) blockchain to help validate transactions and maintain network security. In return, you earn rewards, similar to earning interest in a savings account. While staking can provide passive income, it also comes with risks, such as potential losses if the value of the staked coins drops or if the network encounters issues.

Is Crypto Staking Worth It?

Yes, staking is worth it – you’ll earn rewards simply for holding/staking the coins in a wallet or participating in a staking pool. However, ensure you’re using a safe staking platform and always assess the lock-up terms before proceeding.

What is the Best Crypto Staking Platform?

eToro is one of the best crypto staking platforms. It offers flexibility, good APYs and is suitable for investors of all levels of experience.

How Can I Stake Cryptocurrency?

Choose a suitable staking platform or wallet that supports staking, deposit the coins, and begin earning rewards. Be sure to consider whether on-chain or off-chain staking is right for you.

Can You Get Rich from Staking Crypto?

You won’t get rich from staking, as APYs are typically modest. The biggest gains in crypto is from price appreciation.

What is the Best Crypto for Staking?

Stablecoins like USDT and USDC are ideal for staking, as you can avoid volatility. That said, any eligible coins you hold are worth considering, as it’s a simple way to earn passive rewards. Popular staking cryptocurrencies include Polkadot (DOT), Tezos (XTZ), Cardano (ADA), Solana (SOL), and Cosmos (ATOM).

References

1. Explainer: What is ‘staking,’ the cryptocurrency practice in regulators’ crosshairs? (Reuters)
2. Earn rewards while securing Ethereum (Ethereum Foundation)
3. What investors need to know about ‘staking,’ the passive income opportunity at the center of crypto’s latest regulation scare (CNBC)
4. IRS clarifies when cryptocurrency ‘staking’ rewards are included in taxable income (BDO)