You can earn passive income by staking crypto coins like Polkadot, Cardano, Tezos, Aglorand, Polygon, and more.
Updated Mar 21, 2023
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Crypto
Technology
Passive Income
Most people are earning pennies by keeping their cash in a regular savings account, and while some investments offer passive income in the form of dividends, yields can still be fairly small, and there's risk involved.
While staking crypto is not risk-free, it is seen as a lower-risk way to earn potentially massive yields on your savings and investments—if you convert your cash to some of the best crypto staking coins first.
If you're looking to get into staking, choosing the right crypto to stake is one of the top considerations. Here are 10 of the best staking crypto coins.
Whether you can earn enough passive income to live off staking crypto depends on how much you stake and for how long, as well as the future value of the coins you're staking and the interest rate you're earning.
Staking your crypto through an exchange is the easiest way to get into staking crypto, but the interest rates, although much higher than what you'd earn with a savings account or even other low-risk investments, typically aren't enough to live off of unless you've got a massive balance. You can earn higher yields—sometimes enough to live off of even if your balance isn't full of zeroes—through DeFi staking. However, this can be riskier and requires a good amount of knowledge in the areas of DeFi and crypto.
As a buy-and-hold method for profiting off crypto, it can be less risky than day trading crypto but isn't without risks of its own. While high staking rewards are a top consideration, the volatility of the crypto you invest in needs to be taken into account as well—if the price of your crypto takes a big hit, so do your profits. It's also important to consider liquidity and the process for unstaking your crypto, as some staking strategies require you to lock up your money for a certain period of time.
While Ethereum used to be a proof-of-work model, meaning you couldn't stake Ether (ETH), the Ethereum 2.0 upgrade, in an attempt to cut energy consumption, shifted to a proof-of-stake model, which means you can stake Ether. Not only is Ethereum extremely popular and well-established, but you can find places to stake ETH that offer anywhere from 4% to 10% or more. However, right now ETH that is staked has to be locked up for an unknown period of time, so don't expect to be able to withdraw or trade your coins any time soon.
Ethereum's other big competitor, Cardano (ADA), is also one of the best crypto staking coins. While it generally offers a lower yield than DOT, with interest rates hovering around 4% to 8%, there's no lockup period with ADA. In addition to this flexibility, Cardano also has a significant community behind it, and the platform is fairly easy to use.
Where you hold your crypto is going to depend on which of the best crypto staking coins you choose, as each platform supports different coins and offers different interest rates. For example, with MyConstant, you can earn an automatic 4% fixed APY on certain cryptos and up to 12.5% APY if you invest through their crypto-lend program.
You can also stake your crypto in a staking pool through a number of different DeFi wallets, and some of them offer even higher rates. However, this can involve a little more setup work and technical knowledge to get started.
Either way, you'll need to choose which of the best crypto staking coins you want to invest in and purchase some through a crypto exchange. In addition to the exchanges mentioned above, Coinbase also offers many of the coins mentioned above.
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