Best Staking Coins 2024: Maximizing Passive Income in Crypto
Discover the best staking coins for maximum passive income, a profitable way to earn with cryptocurrency holdings. When you stake coins, you lock them up for a period to help validate transactions on a blockchain. In return, you receive additional tokens as a reward.
This strategy not only allows you to earn money but also supports the accuracy of blockchain transactions. It’s like planting seeds and watching them grow into more rewards.
In this guide, we’ll explore some of the best staking coins that can help you maximize your passive income and take advantage of high yields.
Understanding staking
Staking is a process where you keep your cryptocurrency in a digital wallet to help validate transactions on certain blockchains, earning extra crypto in return. Here are the key benefits:
- Staking doesn’t need extra equipment like mining.
- You earn interest on your crypto.
- It’s environmentally friendlier than mining.
- Improves the efficiency and security of Proof of Stake (PoS) blockchains.
Proof of Stake (PoS) is a consensus mechanism used by some blockchains. Unlike Proof of Work (PoW), which requires miners to solve complex mathematical problems, PoS validators are chosen based on the number of coins they hold and stake. Validators validate transactions and create new blocks, earning rewards in the process.
To start staking, get PoS coins, choose how much to stake, and do this on a major exchange like Coinbase or Kraken. Also, consider yield farming for extra income by lending your crypto to DeFi platforms for various durations, leading to higher rewards with larger lending amounts.
Risks and rewards of staking
When it comes to staking, there are both benefits and potential risks to consider. Let’s break it down:
Benefits of Staking
- Passive income. Staking lets you earn extra cryptocurrency by holding onto your coins.
- No harm to the environment. It’s more energy-efficient than mining, making it a greener option.
- Supporting blockchain security. By participating in transaction validation, you help secure the blockchain network.
Potential Risks of Staking
- Market volatility. Cryptocurrency prices can be volatile, affecting the value of your staked coins.
- Lock-up periods. Some staking platforms require you to lock up your coins for a set period, limiting access to your funds.
- Platform risks. Staking profitability depends on the platform’s performance and reliability. It’s crucial to research and choose reputable platforms.
Staking profitability depends on the platform, so do take your time to research. For example, with Kraken, you can earn up to 23% APY (Annual Percentage Yield) by staking 16 different cryptos. In contrast, Coinbase only pays up to 5% APY and supports 7 assets.
Consider the following factors:
- Security. Ensure the platform has strong security measures to protect your funds.
- Fees. Check for any staking fees or commission charges that may affect your earnings.
- Ease of use. Choose a platform that is user-friendly and easy to navigate.
- Minimal stake. Some platforms may require a minimum amount of coins to stake, so consider the entry requirement.
- Transparency. Look for platforms with clear and transparent staking programs, detailing rewards and potential risks.
By carefully considering these factors and conducting thorough research, you can make informed decisions and maximize the benefits of staking while minimizing potential risks.
Best staking coins for maximum passive income
Tether (USDT)
For a stable option when staking, consider Tether (USDT). It’s a stablecoin with a huge trading volume, making it easy to swap for more profitable tokens.
If you’re keen on staking USDT, Binance offers a generous 10.00% on USDT flexible deposits. Crypto.com Earn supports USDT with APYs (Annual Percentage Yields) from 0.4% to over 5%, depending on your balance.
Ethereum (ETH)
For staking in 2024, Ethereum (ETH) stands out as one of the top choices. Ethereum 2.0, also known as Eth2, ranks second in popularity after Bitcoin and is among the best coins for staking. Ethereum has transitioned from a Proof of Work (PoW) to a Proof of Stake (PoS) consensus algorithm, with over $12 billion worth of ETH staked.
If you want to stake ETH as a validator, you’ll need at least 32 ETH. But if you’re using pooled staking or staking services, you might not need to deposit a specific amount. The deposit requirement varies based on the wallet or exchange you use.
Crypto.com offers up to 5.5% per annum for staking ETH, while Kraken provides APY ranging from 1 to 4%, and Coinbase offers up to 6% APY.
Cosmos (ATOM)
When it comes to staking, Cosmos stands out as a top choice for investors. Its focus on creating an interoperable network of crypto ecosystems makes it a promising investment. With an estimated APR of 25.2% for validators and 23.3% for delegators, Cosmos offers some of the highest reward rates in the market.
Validators must hold more than the balance of the 175th active validator to earn rewards, while delegation options are available for those who don’t run a node, allowing them to stake ATOM through non-custodial wallets. These factors, combined with the high reward rates, make Cosmos an excellent option for staking in 2024.
For example, Kraken offers an APR ranging from 6% to 10%, Binance provides 15% on fixed deposits, and Atomic Wallet boasts an impressive 16.14% APY specifically for Cosmos staking.
Cardano (ADA)
Cardano stands out as a top choice for staking due to its robust Proof of Stake (PoS) network, often likened to Ethereum. Its wide market presence and potential for passive income make it a standout in the staking field.
One of Cardano’s key advantages is its ability to handle several hundred transactions per second, showcasing its scalability and efficiency. What sets Cardano apart is its flexibility for stakers, allowing them to withdraw their staked assets at any time, making it beginner-friendly.
For those considering staking Cardano, it’s worth noting that different platforms offer varying rewards. For instance, using Cardano’s official wallet, Daedalus, can yield around 5% in rewards, while Binance offers 3.6% for fixed deposits. Platforms like Kraken provide an APY ranging from 3% to 6%, and Crypto.com Earn offers up to 4.50% per annum.
Solana (SOL)
Solana stands out as a top choice for staking due to its efficient blockchain design focused on scalability, characterized by low fees and fast transactions. Although individual node management isn’t possible on Solana’s network, there are over 640 validators available for staking.
By delegating your stake to Solana validators, you participate in the rewards they earn. SOL has shown remarkable performance, reaching an all-time high (ATH) of $210 per coin. When staking SOL, you can typically expect annual returns ranging from 7% to 11%.
Currently, the annual yield for staking SOL on Ledger is approximately 5%, factoring in validators’ commission rates. Opting for zero percent commission validators like those on Solflare can boost your annual yield to around 9%. Using P2P (peer-to-peer) options may yield in the low 8% range, while Binance Earn offers 8.9% on a 120-day fixed deposit.
Polkadot (DOT)
Polkadot stands out as one of the top staking coins due to its scalable, multi-chain technology. With an average annual return of 14%, Polkadot offers excellent opportunities for earning passive income through staking. Moreover, staking directly on the native Polkadot network allows you to begin with just 1 DOT.
For even higher rewards, consider these options:
- Staking on the native Polkadot network can yield staking rewards of up to 18%.
- Staking DOT on Binance for 120 days with a fixed deposit can bring you a profit of 15.6%.
- Kraken offers annual percentage rates (APR) ranging from 7% to 11% for staking DOT.
- Coinbase Earn provides an annual percentage yield (APY) of 9.27%.
Tezos (XTZ)
Tezos is a popular cryptocurrency known for staking rewards. By “baking” (running a node), you can earn rewards for validating transactions. If you don’t want to bake, you can delegate your XTZ coins to a “baker”, which can be easily done in wallets like Ledger and Exodus.
Tezos staking rewards are generally consistent, offering an average annual reward of 6.75–10.60%. Atomic Wallet promises 5.8% rewards, Ledger offers around 3%, and centralized exchanges like Kraken and Coinbase provide returns ranging from 4-7% and 4.37% APY respectively.
Polygon (MATIC)
MATIC is the cryptocurrency of Polygon, a blockchain that speeds up Ethereum transactions and reduces fees. To stake MATIC, you can run a node (needs technical skills and a minimum deposit), delegate it through a non-custodial wallet, or use exchanges like Binance or Kraken (easy but risks due to no custody).
On Crypto.com, you can stake MATIC and earn up to 6% rewards. KuCoin offers 3.5% with a 21-day redemption, and Coinbase gives 2.78% APY.
Avalanche (AVAX)
Avalanche is a blockchain that can handle a lot of transactions quickly and with low fees. It’s like Ethereum because it can run smart contracts.
AVAX is a good coin for staking because its platform can handle many validators. You need at least 25 AVAX coins to start staking on the AVAX platform. To be a validator, you need to stake at least 2,000 coins.
After you stake your coins, you have to wait at least two weeks before you can get your rewards.
Staking AVAX can give you a return of 8–14% per year. If you stake AVAX on the native network, you can get 7.65% APY. On Coinbase, you can get 8.50% APY. Staking AVAX on Ledger can get you around 8% APY.
FAQs
APR & APY: what’s the difference?
APR (annual percentage rate) is the interest you get from your investment in one year. APY (annual percentage yield) is the yearly rate of compound return on investment, which includes the rewards you earn on your earned rewards within a year.
What are validators and delegators in staking?
A delegator is a token holder who wants to join staking but relies on an existing validating node for validation. On the other hand, a validator operates a node, takes part in staking, and may accept delegators to increase their stake.
How to start staking?
Staking is generally open to anyone who wants to participate. Here’s what you can do to start:
- Pick an exchange. Staking profitability depends on the platform, so do take your time to research. Consider the following factors: security, fees, ease of use, and transparency of the staking program.
- Get PoS crypto. Not all cryptocurrencies support staking. Current options include Ethereum, Tether, Polkadot, Solana, Cardano, and others.
- Transfer PoS crypto to a wallet. The only requirement for staking is that you keep coins in your cryptocurrency wallet over an extended period of time. So, keep in mind that your coins will be unavailable while you stake them. Don’t have a crypto wallet yet? Here’s a detailed guide on how to obtain one.
- Stake your coins. Follow the instructions provided by your staking platform to stake your coins. This usually involves selecting the amount of coins to stake and confirming the transaction.
- Monitor your staking rewards. Keep track of your staking rewards and check your staking dashboard regularly to see how much you’ve earned.
