Algorand blockchain is one of the top proof-of-stake blockchain protocols available today. The decentralized tech platform makes use of the pure proof-of-stake (PPoS) consensus mechanism.
Interested persons can also stake Algorand (ALGO) tokens to earn exciting rewards as well as help secure the blockchain. This article is a brief overview of the Algorand (ALGO) chain, how to stake ALGO tokens, rewards, etc. Before we move on, let’s find out more about Algorand (ALGO).
What Is Algorand?
Algorand is a unique proof-of-stake (PoS) decentralized blockchain network known for its green stance. The blockchain also focuses on providing a workable solution to the issue of decentralization, security, and speed currently plaguing the blockchain and crypto space.
Staking is a major feature in the entire blockchain and crypto space. It involves locking up a particular amount of crypto assets to earn rewards. Algorand’s native token (ALGO) is one of the various tokens that can be staked to earn passive income. Stakers can also be referred to as validators helping to keep the blockchain network safe. Staking Algorand is one of the easiest ways to earn passive income on your ALGO token holdings.
How Does Algorand Staking Work?
As previously disclosed, the Algorand blockchain is a pure proof-of-stake (PPoS) chain. It is a unique mechanism that allows easy participation on the network while also preventing phony identities on the network. Staking is also a major feature to facilitate the seamless operation of the Algorand blockchain.
One's best bet is $ALGO in this case!#Algorand developed its most notable feature: the Pure Proof of Stake (PPoS) consensus mechanism. Along with its passive staking, both of these features have made Algorand a large market cap project popular with users seeking rewards.
— Abel 🏀 (@0shaqfan0) August 16, 2022
To stake ALGO tokens, interested persons will need to lock up their ALGO tokens and receive passive income in return. It is also important to note that the passive income possible will depend on the platform the staking takes place.
Where to Stake ALGO?
There are several platforms on which ALGO tokens can be staked. These include wallet platforms, centralized exchanges, decentralized exchanges, etc. We will go over two major platforms on which interested persons can stake ALGO tokens. They include:
Ledger Nano is popularly known for its hardware wallets. It is one of the safest and smartest ways to safeguard, buy, exchange, and now stake your crypto tokens. It is also known for its simplicity and the ability for users to meet all their crypto needs in just a single app.
Source – Ledger website
Notably, the Ledger Live app makes it possible for interested persons to stake their Algorand (ALGO) tokens. Stakers will also earn massive rewards on their stakings with staking activities further helping to improve security on the Algorand chain.
With Ledger, stakers will delegate their ALGO tokens to chosen validators. In return, they will earn passive rewards. The entire process is easy and doesn’t require a lot of technical know-how.
To stake ALGO tokens on Ledger, users need to have at least one ALGO token. They also need to download the Ledger Live app either from the Apple Store or from the Google Play store. However, making use of the Ledger Live app is not compulsory as other third-party wallet apps can be used alongside the ledger wallet.
Users can earn passive income as high as 7.40% APY. Staking ALGO on Ledger currently attracts fees of between 1.7% and 4.5%.
2. Staking on Binance
Binance is currently one of the apex crypto exchanges available today and a good platform to stake ALGO tokens. To stake ALGO, interested persons need to have a minimum of 100 ALGO tokens. While this may seem exorbitant, staking rewards on Binance are quite high. Locked staking for 120 days currently offers 8.24%.
Staking rewards increase with a longer staking period. Even more important is the fact that Binance does not charge staking fees, so users do not need to pay any extra charges.
Are Algorand Rewards Taxable?
Crypto taxation is fast becoming one of the most interesting topics in the entire blockchain and crypto space. To a large extent, it also signifies the growing acceptance of cryptocurrency among legislators worldwide. Whether or not you need to pay tax on your crypto earnings depends to a large extent on your geographical location.
In the U.S., for example, you are expected to pay taxes on your crypto earnings. The same goes for India with its recently introduced 1% TDS law. TDS means “tax deducted at source.” Notably, a good software to calculate your U.S. crypto tax is Koinly.
Also, find out more about crypto taxation here.
In conclusion, staking ALGO tokens is a good way to earn passive income while also helping to protect and secure the Algorand chain.
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