Some cryptocurrencies use a “proof-of-stake” protocol to validate and manage their decentralized system. That gives those who own the digital currency a chance to participate as a validator. And earn income through staking their coins.
You’ll support the infrastructure, get to hold your coin while doing so. And even earn some income, too. Let’s discover 5 ways to earn crypto with staking:
1) Staking Ethereum for Passive Income
An investor decides to stake their Ethereum (ETH) holdings on a reputable platform like LIDO. They choose a flexible staking option, allowing them to withdraw their ETH at any time. The investor earns a steady stream of passive income in the form of staking rewards. Which are added to their ETH balance periodically.
Total Value Locked (#TVL) in $ETH Liquid Staking Derivatives (#LSD) is more than 11m ($17.9b) at the moment#Lido is the dominant player with a 77.87% market share, followed by #RocketPool at 11.36%#Ethereum #Staking pic.twitter.com/49M1uvIK8I
— Bo (@bo_opryshko) October 19, 2023
2) Supporting a Blockchain Network
A cryptocurrency enthusiast who believes in the long-term potential of the Cardano blockchain decides to stake their tokens. By staking, they contribute to the security and efficiency of the Cardano network. While also earning rewards.
I don’t know what this person is trying to achieve? Seems to jump pools every epoch. #Cardano #ADA #Staking pic.twitter.com/vAvZNVmoQc
— HUG 🫂 St₳ke Pool 🇬🇧🌍 (@HUG_Pool) October 12, 2023
3) Maximizing Yields with Smaller-Cap Tokens
A risk-tolerant investor seeks higher staking returns and chooses to stake a portion of their portfolio in a smaller-cap token. Such as Zebec Protocol (ZBC). They opt for a 15-day staking term, attracted by the 60% APY offered.
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Now, you can stake your $ZBC on the Nautilus chain and unlock high rewards.
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— Zebec Protocol ⛵ (@Zebec_HQ) August 25, 2023
4) Diversifying Staking Strategies
An investor adopts a diversified staking approach by mixing a combination of large-cap and smaller-cap tokens. They put Shiba Inu on a 90-day term for a 12% APY and Dogecoin on a flexible term for a 5% APY. This strategy aims to balance potential returns with risk management.
Understanding #DeFi strategies is crucial, especially in persistent inflationary times.
Some basic topics to DYOR are here. I like yield farming, liquidity mining, staking, flash loans, and vault strategies.
How much risk can you bear?
1/7 pic.twitter.com/LF4C2aa0KH
— Johnny Hype (@EWQized) October 12, 2023
5) Utilizing Staking Platforms
A cryptocurrency holder decides to use a platform that offers a variety of options. Including fixed-term and flexible staking for a range of cryptocurrencies. The platform provides a user-friendly interface and comprehensive staking information. Making it easy for the investor to manage their staking activities
Looking to diversify your #crypto portfolio while earning extra rewards? 👀
Here are three common types of crypto staking/earning deals:
1️⃣ Flash
2️⃣ Flexible-term
3️⃣ Fixed-term💡 Each has its benefits & drawbacks. DYOR to make an informed choice 👇
— OKX (@okx) May 20, 2023
The tokens will be deposited into a blockchain protocol behind the scenes. For the purpose of keeping the network safe and operational. The tokens that are deposited will subsequently generate interest, which is forwarded to the investor after the agreed term. This might be a fixed term across 30 or 60 days for example.
Alternatively, some platforms offer flexible terms. This means the investor can reclaim their tokens at any given time. In terms of yields, this often depends on the cryptocurrency being staked and the length of the term. In most cases, staking a smaller-cap token across a longer lock-up term will generate the highest yields.
Conclusions
Staking a large-cap token like Ethereum on a flexible term will likely yield a more conservative interest rate.
To offer some insight, large-cap tokens like Shiba Inu and Dogecoin can be staked on a 90-day term at an APY of 12% and 5% respectively. Much higher yields are available on smaller-cap tokens like Zebec Protocol, which offers an APY of 60% on a 15-day term.
