Top 6 coins to stake

Cryptocurrency market experts highlight several interesting tokens at once that can bring long-term profit to investors.

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ETH (Ethereum)

There are two options for staking Ethereum. The first is ether staking in the ETH 2.0 deposit contract.

The second option for passive income is ether staking in DeFi . Here the annual percentage is much higher and in some projects reaches up to 400%.

However, do not forget that this type of earnings carries the risks of developers’ dishonesty, hacking the project’s DeFi contract, and assets may be lost.

In general, according to analysts, 10-15% when staking ETH is considered the norm. At the same time, proven projects usually give such a percentage, which significantly reduces the risks of staking.

Polkadot

One of the main competitors of Ethereum. Staking of the DOT token can be done in the official wallet of the project, as well as on exchanges, the annual return on investments is at the level of 10-18%.

In the future, it makes sense to stake DOT tokens before the launch of parachains, which are expected closer to the fall of 2021. Thus, you can get not only interest from staking, but also earn on the growth of the price of the token itself. The blocking period for DOT tokens when staking on the official wallet is 28 days.

Cardano

Cardano has one of the largest communities, with over 50% of all available ADA coins being staked. Works on the dPos algorithm. Staking on exchanges and wallets brings an annual yield of 3-12%.

Tezos

It is a community driven smart contract and app building platform. Token holders hold voting to make decisions about updates in the network, and also choose the general course of development of the project.

Tezos has been in development since 2014, and the first testnet was launched in 2018. Staking of XTZ tokens will bring from 3-11% per annum on the official website.

Cosmos

Cheap and fast transactions are one of the main advantages of this blockchain. ATOM token can be staked on both official wallets and exchanges.

There is an option to send your ATOM tokens to the DeFi sector, which is gradually being launched on this blockchain as well. However, due to the fact that this direction is still gaining momentum, do not forget about the risks. The average annual percentage varies in the range of 7-20%.

Tron

A large, well-known and sought-after project in the crypto community. More than half of all USDT is issued on the TRON blockchain. Staking TRON brings 4-9% per annum.

Pros and cons of staking

The main difference from PoW is the formation of the block, which occurs randomly. In the case of PoW, miners use expensive hardware that selects a single true number (nonce) to find a new block. And the more powerful the hashrate of the device, the higher the reward of the miner.

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Cryptocurrency staking is a much more convenient and less expensive way to earn money than PoW mining.

According to Igor Zaritsky, staking is also known for its high level of security, given the 51% vulnerability to attacks due to the fact that network participants must compete with themselves while maintaining a certain level of cryptocurrency in their wallets.

The use of cryptocurrencies does not entail significant risks if the user protects their wallet and account properly. The biggest risk comes from price volatility, which can hurt your wallet if momentum dries up.

Another risk is excessive centralization, when the bulk of the assets are in the hands of large players. A similar situation is most likely for "young" cryptocurrencies that are traded at a relatively low price.

Due to the fact that users tend to keep coins in their accounts for as long as possible in order to increase possible profits, there is a very high risk of reducing the turnover of cryptocurrency in general.