There are various ways to make money in the cryptocurrency space asides investing and hodling a coin or token. You can make money by staking coins, trading them, mining them, or even investing in NFTs.
However, with hundreds of coins now available for staking, investors are at lost regarding the best ones to stake. We will look at the top four cryptocurrencies to stake in 2023.
What is Staking?
Staking a process where investors lock up their tokens to help validate transactions on a proof-of-stake (PoS) network. The validators help maintain the security of the network and are offered rewards for staking their tokens.
The rewards are expressed as an annual percentage rate (APR), a concept similar to interest earning on bank savings account.
Proof of stake networks use less energy than their counterpart proof of work (PoW) networks, which is why most blockchain projects are migrating to PoS mechanisms.
Four Coins To Stake In 2023
Here are some of the top tokens to stake this year.
Binance Coin (BNB) Staking
BNB is the native coin of the Binance ecosystem. It is a no brainer that BNB is in this list because Binance is the world’s most popular cryptocurrency exchange and the most valuable crypto company in the world.
BNB powers the BNBChain, smart contract platform that houses thousands of decentralized applications. BNB is also the fourth-most valuable cryptocurrency in terms of market cap and is one of the most staked projects in the world. With Binance burning BNB tokens every quarter, the supply is decreased while demand increases. Hence, by staking BNB tokens, you can earn more than 4% APR annually.
This option hasn’t been around for long because the Ethereum Network migrated to a proof of stake mechanism a few months ago. The migration means that investors can now stake their ETH tokens and earn passive income. Ethereum staking is an excellent way to earn passive income thanks to the fact that Ethereum is currently the second-largest cryptocurrency by market cap.
Becoming a validator on the Ethereum network requires you to have a minimum of 32 ETH staked. Unless you have huge funds or you are a seasoned crypto enthusiast, this condition might be tough for you to fulfil.
Luckily, you can stake your Ether coins without allocating such a huge amount. Validators on the Ethereum network make it possible for smaller ETH holders to assign their tokens to them and earn part of their staking rewards. You can stake your ETH tokens on centralized cryptocurrency exchanges and staking pools. However, if you have the funds, you can operate your own validator node on the Ethereum network.
Polkadot (DOT) Staking
Although Polkadot is a relatively new coin (it was launched on May 26, 2020), it quickly rose to fame. Polkadot is currently one of the top 20 cryptocurrencies by market cap and its use case makes it a unique project.
Polkadot is an interoperability solution that allows different blockchains to transact and share data with one another. The blockchain provides important infrastructure that boosts the entire crypto ecosystem, making it a sensible coin to add to your portfolio.
DOT has one of the best staking offers in the crypto space, offering validators 14% APR. You can run a validator node on the Polkadot blockchain is you own 350 DOT coins. You can become a delagator on the network with at least 80 DOT coins. Both options require investors to lockup their DOT tokens for 28 days to qualify.
DOT is used to validate transactions across the network and offers fantastic staking
Cosmos (ATOM) Staking
Another coin you should consider staking is Cosmos. Cosmos is another leading blockchain project that allows users to create custom blockchains that share the security of the Cosmos network.
According to the official Cosmos website, delegators earn roughly 21.88% APR on the network while node validators earn 23.6% APR. to become a delagator on Cosmos, there is no minimum amount required and you are only required to lock up your token for a minimum of 21 days. However, to become a node validator, you will need at least 64,946 ATOM. hence, the node validators are usually professionals with a lot of money to put in the game.
There are hundreds of coins and tokens you can stake and earn annual rewards for your troubles. However, the four coins listed above are four of the best you can stake this year.