Apart from bankruptciesbear markets, ftx, Terraand SBF, the term “strike” caused quite a stir in the crypto-verse this year. Crypto staking grew in popularity and emerged as a prominent medium to generate passive income.
Crypto staking is a process of allocating only certain crypto assets that would ultimately aid in the verification of transactions on the underlying blockchain network. Users will eventually be able to earn rewards in crypto.
It should be noted that networks using a proof of commitment mechanism are the only ones that can allow crypto staking.
Here’s how crypto staking works
Interested investors will have to put forward their preferred cryptocurrency and the network will select validators to confirm transaction blocks. This selection process usually depends on the amount of crypto that has been pledged.
The investor’s holdings are used to confirm the information written in the new block. Cryptocurrencies can be used as validators since they already have data from the blockchain baked in. Then the staker receives a fee or reward from the network for enabling such holdings to be used as validators.
Advantages and Disadvantages of Crypto Staking
Like any other concept in the industry, staking has its own pros and cons. Since staking usually uses the proof-of-stake mechanism, the energy consumption is quite low. Again, unlike miners, strikers can earn rewards much more easily. While miners need specific equipment to earn rewards, validators need a regular computer.
Looking at the drawbacks of this process, security plays quite an important role. Since PoS is quite new unlike PoW, its security capabilities are still questionable. There is a lot of room for takeover in these networks as those who bring more tokens have the power to do so. This paves the way for more centralization.
Let’s take a look at the highest stake coins
Cardano [ADA]
This network has been a prominent choice for stakers as it thrives on one of the best proof-of-stake blockchains. The network’s native token ADA is staked and earns interest in exchange for validating blocks on the blockchain.
It should be noted that unlike other networks Cardano has no blocking period. Therefore, users can re-deploy or even redeem their ADA at any time. ADA strike is available on BinanceeToro, Kraken and Crypto.com.
Ethereum [ETH]
Ethereum staking is quite popular thanks to its 5-17 percent annual return. The recent move to PoS is expected to remove a range of problems from the network. However, unlike Cardano, staking in the Ethereum network requires a minimum of 32 ETH.
In addition, users on this crypto network depend on staking providers to earn revenue. Ethereum can be wagered on Coinbase, BinanceKraken, OKX and Crypto.com among others.
Solana [SOL]
Solana has caused quite a stir this year with her huge price drop. Still, it remains a hit among strikers. SOL is a proof-of-stake coin that can be easily delegated to network validators for the chance to earn significant annual revenue. With an APY of 5.32 percent, SOL is one of the most widely used cryptocurrencies for those looking to generate passive income.
The network’s fast transactions of 50,000 TPS with average transaction fees of less than $0.1 have lured many. Solana can be wagered on Coinbase, Binance, Huobi, Kraken, Phantom Wallet, Ledger Nano and Exodus wallet.
Polygon [MATIC]
Polygons the total supply is 10 billion tokens, and 12% of MATIC will be used to pay Polygon staking incentives. Polygon uses a network that is eco-friendly, sustainable and doesn’t require a lot of processing resources to get a PoS consensus.
A total of $2.36 billion has been wagered on the Polygon network, which is maintained by more than 100 global validators. Polygon is one of the top staking currencies in 2022 and has distributed nearly $500,000,000 in rewards from the staking pool.
Polygon’s MATIC can be wagered on Binance, KuCoin, ByBit, Crypto.com and Lido Finance.
Binance coin [BNB]
Depending on the duration of the lock-up and the number of tokens being staked, the amount BNB investors earn via staking varies. For example, investors can earn up to 12.99% APY by wagering $5,000 worth of BNB over 120 days.
it should be noted that Binance offers a 25 percent discount on the fee for BNB token holders. Therefore, they would get additional benefits with regard to staking.
Theses [XTZ]
Tezos uses XTZ to provide a more sustainable cryptocurrency platform, which requires less energy to operate than Ethereum and Bitcoin. Delegators can currently stake XTZ to earn an APR of 5.34%. The network has a high stake rate of 74% as about 3 out of 4 XTZ tokens have been staked.
Platforms such as Ledger wallet, Guarda wallet and Binance offer Tezos staking.
Dot [DOT]
Last but certainly not least, Dot has been a popular choice for strikers. The network cross-chain enabling blockchain transfer of data as well as tokens is its selling point.
There are now more than 1.1 billion DOT in circulation. It should be noted that 52% of those tokens have been staked. The high annual yields of the network are one of the main reasons for this. Running validation nodes draw an APR of 14.83%, while network delegators receive an average APR of 14.02%.
Polkadot can be wagered on Kraken, Binance, KuCoin, Bitfinex and other platforms.