Staking is the act of keeping coins in your crypto wallet and earning money from it. Staking quickly rose in popularity as an alternative to mining and trading, shortly after its release. The staking option was quickly adopted by people seeking to profit from bitcoin mining without taking on the risk or high input cost. The return on staking crypto is quite large but in the future, it is going to be exponentially greater as the number of people investing and holding cryptocurrency increases. Currently, there are only about 300 Million dollars that are actively invested into cryptocurrency funds. In five years’ time, it’s estimated to increase by nearly 10x, to 3 Billion dollars. Still, wondering if you should start staking and how to make money staking crypto? Read on to find out.
What is Staking Crypto?
Staking is the process of acquiring and setting aside a certain number of tokens to validate blockchain swap transactions. This cutting-edge technology, known as Proof-of-Stake (PoS), is more energy-efficient since it eliminates, or at least minimizes, the need for using a lot of mining equipment to keep the blockchain secure.
PoS protocols have now been adopted by several blockchains, including Ethereum (ETH), to power their networks in response to growing environmental concerns over the growing usage of cryptocurrencies.
How Does Staking Work?
Staking begins when you buy a certain number of tokens in the network. It’s worth noting that staking can only be performed in a network that uses a PoS algorithm. After the transaction is complete, the user must lock the assets by following the instructions provided by the network’s developers. In most cases, performing a staking transaction takes only a few minutes using your wallet’s directions.
On the other side, cryptocurrency exchanges have made it easier to stake tokens by providing features like staking pools. These efforts are intended to raise the number of coins staked at any one moment by increasing the number of coins staked at any given point in time.
As a rule of thumb, a large number of staked coins require more transactions to be validated by the node. Nodes are typically graded based on the number of tokens they possess.
Consequently, the nodes that have the most tokens will generally receive greater payment, which is why staking pools are so popular these days.
Flexible vs Fixed Staking
On the other hand, a user can stake tokens for a specific length of time, known as fixed staking. Some platforms also provide the option of participating in a more flexible plan in which users may withdraw their coins at any time – known as flexible staking.
The greater rigidity of fixed staking results in higher interest rates for the holder, while flexible staking generally offers less attractive terms.
Why Is Cryptocurrency Staking so Preferable?
Staking is referred to as one of the simplest methods to generate money with cryptocurrencies, and it’s certainly true. You can make money by lending your coins out via interest simply by keeping them for a set length of time. Staking is based on Proof of Stake, which means that new coin miners are chosen based on their existing stake of coins. The more coins you have, the more new ones you may discover. Though some experts think that profits from staking are quite low, but is it so?
The Real Question Is: Is Staking Crypto Worth It?
Yes, if done correctly, making money with cryptocurrency through staking can be profitable. Staking profits are all about how many coins you have in your possession. Your reward is determined by the amount; that is to say, the person who owns more of a certain coin has a higher chance of being chosen as the new block validator. The appeal of staking is that it allows crypto investors to earn far higher APYs than traditional savings accounts or money market funds. This method benefits both consumers and the network since all parties may obtain a piece of the staked coins at any one time. The majority of staking initiatives have a minimum investment requirement and require a continual connection to a wallet in order to maintain a positive return on investment.
Is It Profitable To Stake Crypto?
Staking is similar to bitcoin mining or trading in terms of rewards but without risk. All you have to do to join the mining pool and make money with cryptocurrency is stake (buy and hold) some coins. How much and how long you invest will decide the real revenue you may generate from staking. When it comes to staking, the more you stake, the more money you might make. Aside from that, there are several more aspects to consider in order to increase your staking revenue or staking profits. When staking a coin, you must keep a keen eye on its value or price. It’s useless to bet on a coin with a high inflation rate (volatility). Even though you can make a lot of money by staking these currencies, their value will drop fast, leaving you with little to no money. This is why investing in a cryptocurrency with minimal volatility and knowing all your possible options is critical.
Staking on EGG.FI
As a liquidity provider, we at EGG.FI incentivize to maintain your LP token by providing trading fees and the ability to earn rewards in the form of reward tokens. Rewarding projects benefit from the increased liquidity maintenance and slippage reduction, which can in turn increase trading activity. Secure, Non-Custodial Staking EGG helps users compound cryptocurrency investments through secure staking. We connect you to the best-in-class validators that offer high-uptime, secure staking with advanced monitoring & support.
It’s difficult to choose between the many farms. The EGG dashboard becomes handy in analyzing and comparing pools’ rewards, using a more efficient analysis technique. The traditional definition of APY is the actual rate of return on an investment after taking into account compounding earnings.
Usually, it can be tough to stake crypto for non-techies. Let’s review ETH staking as an example – You can register as a validator only if you stake 32 ETH and have to wait for the lock-up period to end. However, even though it is on Ethereum blockchain, 12% APYs appear low in the cryptocurrency world.
The EGG Protocol allows us to offer you a 142% APY interest on our investment DeFi platform, because it can generate rewards even when you stake another currency not only ETH.
Here are some of our staking advantages:
- Rather than receiving one staking reward, you will receive two – Crypto and EGG tokens.
- No need to deposit 32 ETH anymore, in the case of ETH staking.
- You can stop staking whenever you choose.
- After the locking period, the rewards are guaranteed.
- EGG Cross Chain DeFi Dashboard charges 0.00% fees.
- Reduce the gas fee by sending a simple token instead of staking.
- Provides the ability to monitor rewards in a real-time dashboard from your profile.
How to Profit From Staking: What Should You Consider Before Staking?
When investing in any cryptocurrency, a strong use case should be the primary consideration. When the inevitable comes and the wheat is sorted from the chaff, the cryptos with the greatest use cases are also the ones most likely to rise to the top.
Maximum Supply Tokens or Coins
The coin/token must have a certain amount in circulation. This will guarantee that the currency’s circulation is restricted, which will keep the demand for it high and help to boost the price. Setting a consistent supply of new coins and a specified maximum amount can help to control inflation in a cryptocurrency, which may help the asset appreciate over time. When the maximum amount is reached, there will be less money available on the market in general.
The Demand for Cryptocurrency
When investing in any cryptocurrency, a strong use case should be the primary consideration. When the inevitable comes and the wheat is sorted from the chaff, the cryptos with the greatest use cases are also the ones most likely to rise to the top. When cryptocurrencies are being utilized, demand for them is usually higher. If a cryptocurrency has authentic uses, it will be in high demand and, as a result, have a high price.
To summarize, staking is profitable, but how much you make will depend on how effectively and intelligently you stake. There are several PoS coins that you can stake, including DASH, Titan Coin, EOS.io, Tezos, and others.
The information on EGG.FI is for educational purposes only and should not be regarded as investment advice. Any opinion that may be provided on this page does not constitute a recommendation by EGG.FI or its team members. We do not make any representations or warranty on the accuracy or completeness of the information that is provided on this page. If you rely on the information provided above, then you do so entirely at your own risk.