The Top 6 Staking Protocols For Crypto Investors

Most consumer’s savings today have their funds sitting in traditional bank savings accounts, where they earn mere pennies in annual interest. Some shrewder minds might look to put their savings into other investments such as dividends, but even there the yields tend to be minimal, and it comes with a higher risk. 

Staking crypto is not risk-free either, but it is generally viewed as a low-risk activity that can potentially earn much bigger interest compared with traditional savings accounts and investments. 

The cryptocurrency industry has gotten a lot of attention from savers in recent years, with more than $72.3 billion in total value locked in decentralized finance protocols, much of which is being staked. 

Staking can pay big rewards and for many people it’s no longer a question of whether or not to stake, but rather, what tokens should they stake? 

How Staking Works

Staking is a fairly simple concept that involves putting your cryptocurrency tokens to use to help safeguard and power the blockchain network. It’s an incentivized activity, where users earn rewards in the form of transaction fees that are dedicated each time an amount of tokens is sent from one network user to another. Users stake their coins to validate these network transactions on blockchains that use a “proof-of-stake” consensus mechanism. 

PoS networks use staking to select honest participants to verify new blocks of data that are stamped onto the blockchain. These validators must lock a certain amount of tokens into the network at the risk of forfeiting those tokens if they act dishonestly. It means they have an incentive not to conduct any malicious activity. 

The incentives are greater for those who stake more tokens. The larger the stake, the greater the chance of being selected to propose a new block and receive the rewards on offer. As such, it has become widespread for validators to participate in “staking pools”, where there coins are pooled together with those of other users. In this way, it becomes possible for everyone to participate in the staking process, even if they do not possess the required minimum number of tokens. 

What’s more, unlike other passive crypto investing methods such as mining, staking does not require an investment in specialized equipment. Moreover, users do not require specialized skills – all they have to do is send their tokens to the correct address and they can start earning rewards. 

That said, there are some things to know before staking crypto. While the exact amount of rewards on offer is a consideration, beware that the volatility of each token will have an impact on the overall profit in real terms. If the price of the token drops, so does the value of the rewards. Other considerations include the process for unstaking crypto, as many protocols require that tokens are locked up for a specified period of time. 

With those considerations in mind, here are the best staking coins for investors who’re just getting started. 

1. Ethereum: Best For Long-Term Stakers

The Ethereum blockchain is probably the most iconic name out of all staking coins, and its ecosystem continues to grow at a tremendous rate. 

Previously, staking wasn’t possible on Ethereum as the network used an energy-intensive “proof-of-work” consensus mechanism to process transactions. However, with users concerned over the environmental implications, the community agreed to transition to a PoS model instead. With the Ethereum 2.0 upgrade, it finally become possible to stake Ether (ETH) tokens.

Given the popularity of Ethereum, ETH is now widely seen as one of the best staking coins in the business. That said, the requirements for staking ETH are sky-high, with a minimum of 32 ETH coins required to become a network validator. 

Luckily, there is an alternative in the shape of the numerous Ethereum staking pools on offer at a range of crypto exchanges and services. By staking in a pool, users can lock up a much smaller amount of tokens and still share in the rewards. 

ETH staking is available on services such as Binance, OKEx, Coinbase, eToro, Kraken, BitFinix and others, to name just a few, with APY ranging from 4% to 10% or even more. Note that right now, your ETH must be locked up for an indefinite period of time, so be aware that you won’t be able to access any coins that are staked for the foreseeable future. 

2. Cardano: Best For Sustainable Staking

Cardano is one of the best known rivals to Ethereum, with a blockchain that’s said to be more scalable and sustainable. The Cardano network aims to improve on the energy-intensive Bitcoin network through its PoS protocol, and thus markets itself as an eco-friendly option for everything from transactions to DeFi, GameFi and NFTs. 

Cardano is one of the best performing crypto assets of all time, having gained more than 4,500% in value since it was first launched. In addition, Cardano supports smart contracts and is home to a nascent but fast-growing ecosystem of DeFi assets that position it for substantial growth in future as well. 

Because of Cardano’s popularity there are numerous options to stake its native ADA token, with some of the best places to do so including Crypto.com and eToro. That said, just as with ETH, the rates on offer for ADA staking will vary from place to place. Most exchanges offer an APY of between 4% and 8%, which is a little lower than the returns available for ETH and other tokens. That said, there is no minimum lockup period when staking ADA, and that has value itself. 

Besides staking on exchanges, it’s also possible to stake directly using the Atomic Wallet, Daedalus and Yoroi wallets

3. Quint: Most Unique Staking Incentives

Quint stands out as an exciting staking option because it offers unique rewards that no other token provides – namely, real-world benefits in addition to the regular APY earned. 

The project is aimed at linking the metaverse with the real world and one of the ways it does this is through a mechanism called “Super-Staking Pools”. There are two types of super staking pool. The first is Luxury Raffle Pools, where users stake tokens and are entered into a prize draw for expensive luxury goods such as five-star hotel stays, holiday packages, consumer items, cars and more. 

While you might require some luck to win the Luxury Raffles, participating in the Quintessential Pools comes with the guaranteed reward of an airdropped NFT. The NFTs themselves are prizes that entitle the holders to yet more benefits in the real world, including hotel stays, airline tickets, supercar experiences, as well as smaller rewards. 

To stake on Quint, you’ll need to obtain some BNB and then purchase some QUINT tokens on PancakeSwap. Note there is a hefty 10% transaction fee on this coin, which might seem very expensive in comparison to other tokens. However, those fees go towards funding the real life rewards, as well as the development of play-to-earn crypto games that run on the Quint blockchain. NFTs to access those games will be airdropped to QUINT token holders once they’re up and running.

Quint also offers conventional staking pools with lower transaction fees that can earn rewards in a variety of popular tokens with an APR of anywhere between 15% and 33%. 

4. GTON Capital: More Staking Functionality

Having only launched its staking functionality in 2021, GTON Capital is one of the newest blockchains to enable users to participate in its ecosystem and earn rewards for doing so. Staking was in fact the first and most basic functionality for GTON coin holders, providing an opportunity for its community to earn passive rewards with minimum risk. 

GTON is a layer-2 scaling protocol for Ethereum that’s building an ecosystem of innovative web 3.0 infrastructure and products with decentralized stablecoins and scalable smart contract execution layers at its core, with the goal being to scale DeFi globally to the masses. 

Not only is GTON Capital ambitious, but it’s also highly rewarding, with the GTON Capital app offering a fixed reward of 22.32% APR on the Fantom blockchain. Rewards are paid out daily, however staking is now being migrated to Ethereum to expand the protocol’s reach.

One of the advantages of staking on GTON Capital is that users are able to mint sGTON tokens that represent their staked balance. The sGTON tokens can then be used as collateral to loan GTON Dollar, which can then be used for different value-generating activities such as dApp transactions, trading, yield farming, lending and so on. Another advantage of sGTON is it can be used as a governance token – meaning users can vote on decisions affecting the protocol without unstaking their tokens. When the user wants to unstake their GTON, the sGTON tokens are returned to the protocol and burnt. 

Staking rewards are paid out using transaction fees accumulated by the GTON Capital treasury from rollups, which are used to scale Ethereum transactions, as well as dApp transactions. 

Staking on GTON Capital is designed to incentivize users to hold GTON for longer periods of time, something that fosters stability of the overall ecosystem by providing users with sustainable revenue generating opportunities. At the core of GTON Capital’s ecosystem is Pathway, which is an algorithm for managing protocol-controlled assets and protocol-owned liquidity, based on algorithmically-driven parameters and rules. 

Pathway tracks fundamental metrics, like total value locked, volumes, number of users and more, enabling it to calculate a reasonable price peg for the token. With the current parameters, around 25% of GTON’s circulating supply is allocated as staking rewards, amounting to around 6% of the coin’s total supply. 

5. Polkadot: Most Stable Returns

Polkadot differs from conventional PoS blockchains, being based on a nominated Proof-of-Stake consensus mechanism that sees nominators back multiple validators in a vote of confidence on their behavior. In this way, those who chose malicious validators are at risk of losing their balance, just as the validator itself is. 

Because being a delegator on Polkadot is a cumbersome process, most investors choose to become nominators, depositing their assets into one or more staking pools. In addition to allowing greater choice, Polkadot pays out some attractive rewards that are not only linked to the size of the stake, but also in proportion to the work performed. 

Polkadot staking rewards currently average around 14%, which is enough to generate a very healthy passive income. Moreover, DOT is one of the most established and stable tokens in comparison to other staking options. On the downside, users are required to lock up their tokens for a minimum period of 28 days. 

Staking DOT is possible directly through the native Polkadot-JS user interface, although that method is fairly complex. Most users instead stake their DOT on exchanges such as Kraken, KuCoin, Binance, Lido, Ledger-Live and BitFinex. 

6. Polygon: Top Staking Coin For Validators

Like GTON Capital, Polygon was built as a scaling network to make Ethereum more scalable, providing compatibility for Ethereum-native applications to migrate to its blockchain, where transactions are faster and lower cost. 

Because of its compatibility with Ethereum, not too mention its popularity Polygon is not only a good long-term investment but also an excellent option for those looking for a token to stake. After all, MATIC was one of the fastest-growing tokens in 2021, with its value rising by more than 350%. 

Polygon is a great choice for those who prefer to be validators instead of staking directly. Users are required to stake just two MATIC tokens (1 MATIC is worth 88 cents at the time of writing) at a minimum to become a validator. Alternatively, users who would rather nominate other validators can do so through platforms such as Crypto.com. 

Staking directly to become a validator is possible using a wallet such as MetaMask. Besides Crypto.com, platforms such as Binance, Kraken, KuCoin and Gemini offer MATIC staking. 

At present, most of those services offer an APR of between 10% and 14% on staked MATIC, with the actual value of the rewards depending on the lock-in period, which is customizable.