How to earn in crypto (Crypto Staking Simplified)
You’re probably here because you’re wondering how to earn in crypto. Luckily for you, we’re covering this question and adding context you didn’t even consider.
We’ll be exploring crypto staking, which is one of the best ways to earn in crypto. Sounds good? Let’s get into it.
What is crypto staking?
Imagine a scenario where your bank wants to verify some transactions, but they need your help and money to be able to do so. So, you actively give them some of your money so they can pull it off (this is us hoping you like them enough). When you do this, they also promise you some rewards, which will likely be extra cash in your account.
If you get this, then you already understand crypto staking.
Crypto staking is the process of “locking” your crypto to verify transactions on a blockchain. By staking or locking your crypto, you ensure that the blockchain continues to operate securely with sufficient resources to back them up.
The incentive behind crypto staking is reward tokens. Think of this as a means of earning free cryptocurrency from what you hold in your wallet. The passive income generated from crypto staking can be extremely lucrative if done right.
So, what are the benefits of staking crypto?
Staking is a great way to generate passive income through your crypto assets. Some cryptocurrencies offer interest rates as high as 3–10% annual percentage yield (APY) with staking. In contrast, you receive 1–2% yearly interest when you save with your local bank.
Confused about which cryptocurrencies to stake? We’ve presented some of the best staking options as well as their average interest yields.
- Ethereum 2.0: 4.5% APY
- Polkadot: 13.9% APY
- Solana: 5.8% APY
- Avalanche: 9.25% APY
- Cardano: 5.01% APY
- Terra: 8.05% APY
Pro tip: When selecting crypto to stake, consider one with a high yield and market cap. You should also believe in the long-term potential of your desired crypto asset. So be careful about staking tokens that you’re not familiar with.
How to stake crypto?
Staking cryptocurrency may look confusing, but it’s a simple process. We’ll be highlighting how to stake popular coins like Ethereum and Solana.
Ethereum is the second most popular cryptocurrency after bitcoin and represents a good way for beginners to earn passive income from their crypto. Staking on Ethereum requires a minimum stake of 32 Ether ($98,451) and can be done in two ways.
- You can purchase 32 Ether from an exchange service, like Coinbase, and stake directly on the official Ethereum validator platform.
- Or you can consider a less expensive option like joining a staking pool through an exchange service. These platforms allow you to stake as low as $10 in exchange for rewards.
Read our beginners guide on Ethereum.
How to stake Solana
Solana is one of the fastest-growing cryptocurrencies and enables users to stake their tokens for rewards. Staking on Solana is less expensive than Ethereum and can be done in three ways.
- Staking directly on the official validator platform
- You can use a Solana native wallet like Phantom.
- Joining a staking pool through an exchange service.
Quick recap: Crypto staking represents one of the best ways to put your crypto to work and earn passive income. It is also ideal for beginners who have little experience in crypto trading and represents a low-risk investment opportunity.