It’s no secret that the cryptocurrency market is volatile. So, it might feel counterintuitive to learn that there’s a way you can consistently earn stable passive income by holding certain crypto assets. Let’s dive into some of the best staking crypto to earn passive income.
Various cryptocurrency projects will offer a wide range of staking rewards – but with most things in life, higher rewards typically carries higher risk. It’s important to choose coins with solid white papers, reputable founders, and a project you believe has long-term potential.
Risks of Staking Crypto
Before you dive into crypto staking, it’s important to understand some of the risks:
- Price Depreciation: The price of the underlying cryptocurrency can depreciate
- Lock-Up Period: While not all staking programs require a lock-up, some staking programs require you to lock your tokens for a set duration which can be weeks or months. During this time, you will be unable to remove your crypto from the staking program and sell. Some programs will allow you to remove your crypto early, but will charge a fee % for early removal.
- Low Liquidity: There may be insufficient liquidity for you to trade your crypto back into your desired currency, be it Bitcoin, Ethereum, or stable coin.
- Loss due to Security Flaw / Hacks: You can lose all of your investment if the protocol/exchange you are staking on suffers a hack or has a security vulnerability
- Rewards Change: Often times the reward APY % can fluctuate, so it’s important to monitor the reward % to make sure it still makes sense for what you are looking for
These are just a few of the risks which come along with the rewards that staking offers, so it’s important that you do your own research and fully understand the staking program you are participating in and the risk involved.
We’ll share five of the best staking crypto that can help you earn passive income. However, did we already mention that this is not investment advice and to do your own research?
Best Staking Crypto to Earn Passive Income
#1: Cardano
Staking Reward: Approximately 0.48 – 7.79%
Depending on the exchange you use, you may have the option to choose from a flexible or fixed period. If you opt for the flexible plan, you’ll receive a staking award on the low end of the percentage spectrum. Conversely, people who stake their ADA coins for fixed periods of 30 or 60 days will receive a larger staking payout.
There are several exchanges and wallets where you can stake your crypto. Examples include:
Your funds will become available once your chosen staking period ends if you choose a fixed plan. At that point, you’ll receive your returns and can either sell them for profit or reinvest the ADA coins into another round of staking.
#2: Algorand
Staking Reward: Approximately 5 – 7%
Algorand (ALGO) is another cryptocurrency that has a relatively stable price while offering generous staking rewards.
You can get started staking with a single ALGO coin. .
Several exchanges and wallets offer the opportunity for you to stake your ALGO. Examples include:
The frequency with which you receive your returns varies depending on the staking platform you use. However, generally speaking, you can expect to get your rewards frequently. That’s an advantage over Cardano since you can reinvest your staking rewards to earn even more ALGO.
Using exchanges like Coinbase to stake your ALGO is an excellent option if you don’t want to juggle your cryptocurrency in multiple wallets. However, holding your ALGO in the Algorand wallet will offer you a higher return.
#3: Ethereum
Staking Reward: Approximately 5 – 7%
Cryptocurrency enthusiasts have many opinions about the best staking crypto, but it’s impossible to ignore the success of the “silver” in crypto’s marketspace—Ethereum (ETH).
There’s a seemingly significant caveat with staking Ethereum since it requires 32 ETH, which currently costs over $3,000 per ETH, to run an independent node. However, some exchanges allow you to stake ETH without a minimum amount and on the lower end of the staking rewards scale. That means even if you own 0.0002 ETH, you’re able to earn staking rewards.
These no-minimum ETH exchanges include:
Now, let’s talk about a legitimate caveat to staking ETH: You likely won’t receive your staking rewards until Ethereum 2.0 launches. There isn’t a date for this yet, but according to Coinbase, this will occur between 2022 – 2024.
Furthermore, since your staked ETH will help Ethereum’s upgraded 2.0 network efforts, you won’t have access to your staked money until Ethereum 2.0 is ready. While many people believe that ETH will increase in value, you need to be comfortable having your money tied up for such a long time.
#4: Tezos
Staking Reward: Approximately 5 – 7 %
Tezos offers an attractive annual reward for staking your XTZ coins, and you don’t have to lock in your money for any set period.
Depending on where you stake, you might have to wait several weeks to receive your first XTZ reward. After that point, the payouts usually come every few days. So, to maximize your passive income, consider letting those payouts accumulate. That way, you earn rewards on top of your rewards.
You can stake XTZ on platforms such as:
Most platforms only require a minimum of one XTZ coin for you to begin staking. That’s a little over $5 per Tezos, according to current prices.
#5: Cosmos
Staking Reward: Approximately 5 – 10%
Although Cosmos (ATOM) offers a nearly double-digit staking reward, ATOM tends to be a much more volatile coin than the others we covered.
Staking ATOM is similar to the other coins we covered. You’ll need to own a minimum of one ATOM coin to stake, which is currently worth around $25.
You can stake your ATOM on exchanges and wallets such as:
Coinbase also lets you stake ATOM, but you’ll receive among the lowest rewards. Once you’re ready to withdraw your funds, you can expect it to take around 21 days. So, plan accordingly!
Are You Ready to Earn Passive Income?
There’s a massive technical side to staking cryptocurrency. After all, you receive staking rewards because you contribute to the blockchain network of any given asset.
Luckily, you don’t have to understand the nitty-gritty details of this proof-of-stake concept to participate in the best staking crypto. However, it’s vital to do your research to ensure the crypto you choose to stake has a solid foundation.
Just ask Mark Cuban—he fell for Titan token offering exorbitantly high staking rewards. In fact, according to Reddit users, CBNC reported that some exchanges were offering 4,151,343,175% annual yields on Titan.
Needless to say, if a crypto’s staking rewards sound too good to be true, it’s crucial to research them extra well before you invest your money into them.
