5 best staking providers
O
n the face of it, staking is seen as means by which a passive income can be earned on otherwise dormant crypto currency. Whilst it may draw parallels to depositing money in a bank savings account and earning interest, staking couldn’t be more different.
In this guide:
Disclaimer: All of the information written on Coin Crop is without influence and based on our analysis. No guarantee is offered concerning the accuracy of this information and therefore, any individual following up on it does as such completely at their own risk. Rates are correct at time of publication.
What is staking?
In simple terms, staking describes depositing tokens into a staking pool (or crypto currency wallet) to assist the associated network operate in a secure and efficient manner.
Holders of assets that participate are randomly selected by a process in the underlying protocol that ensures each node gets a turn in being the block validator.
Those individuals with a higher stake value has a better probability of being chosen to be the next block validator.
The expression ‘staking’ has been derived because a stake in the project is representative of a voting right that is earned after acquiring a minimum number of the tokens.
So is staking basically a bond?
No! There is far more to staking. In the old world of finance, a company might issue a bond which, in exchange for an amount of money, pays a rate of interest over a given period of time. At the end of the bond lock-in period, the money and interest would be returned to the holder.
Here’s how staking is different to bonds:
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Staking is primarily for the purpose of governance. Although it may be perceived primarily as a means of income from rewards, it is instead primarily an incentive for participants to secure the network and make collaborative decisions on the project.
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The reward comes from newly minted tokens, not from profits in the company.
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In order to reward individuals that stake tokens it is necessary for the project to mint new tokens – i.e. the supply of tokens is increasing over time. This could draw parallels with a traditional company that ‘taps’ shareholders for additional finance in return for discounted shares. Those shareholders that don’t participate face having their holding diluted.
How do I stake my tokens?
Once you have decided which tokens you are going to stake, the next step is to choose a method of performing the staking. There are two approaches: centralised and decentralised.
In the decentralised method, you are responsible for building and running a so called validator node. Whilst this has the advantage of giving you a better rate of return (as no fees are taken), it can be technically complex and is beyond the scope of this guide.
For the majority of people, a centralised approach will be chosen where an existing company, exchange or wallet will be used. For example, the Binance exchange offers staking services although this would require the customer to undertake KYC (know-your-customer) identity verification. If you preferred a more anonymous solution, the Trust Wallet application offers staking for a limit number of tokens.
Once you have chosen your preferred method of staking, it is usually a simple matter of transferring the tokens from your personal wallet to the staking provider.
Towards the bottom of this guide, we have listed our top 5 favourite staking organisations.
Benefits of staking
For individuals that have tokenised assets, staking represents a good way to earn a return from what would otherwise be an idle asset. Returns vary but a typically average the 10% rate of return. Whilst this is nowhere near as high as yield farming, is has far less of the risks associated with yield farming.
As well as earning a return, staking although benefits the project by securing the network. The is obviously in the interests of the asset holder as it further reduces the risk of the project failing
Risks of staking
Loss of tokens - Few people would argue that investing in crypto currencies is high risk. There of course exists the risk in the world of staking that you could lose all of the tokens that you have staked. Losses could be incurred as a result of hacking or a scam that persuaded you to part with your secret keys.
Lower than expected rewards – Some projects will vary their staking rates – for example BNB. Therefore you should read the terms when considering depositing tokens with a project as the headline reward rate may vary.
Project failure – There are plenty of examples in the crypto currency world of projects that have failed and this possibility should not be discounted.
Organisation failure – If you choose to stake your tokens with a centralised organisation (rather than staking using your own infrastructure), there is the possibility that the organisation could fail.
Slashing – In the staking model, the network is made up of so called ‘validator’. The term ‘slashing’ is used to refer to dishonest or abnormal behaviour by a validator which is then punishable by the reduction of staking rewards.
Price volatility - The volatility of the price and fluctuations are a consideration especially with regard the lock-up period. The lock-up period is the time when staked tokens cannot be withdrawn. Thus when this period ends there could be a large number of holders that withdraw at the same time and potentially sell the tokens, thus causing the price to fall.
4 tips for staking
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If you are choosing to stake using a centralised organisation, then do your research as to the reputation of that organisation.
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Consider distributing your holdings in a particular token amongst several centralised staking organisations in order to reduce risk.
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Each project with staking capabilities will have a number of elements that you should consider before depositing your tokens:
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Am I legally allowed to participate from my jurisdiction? Some countries (such as the USA) don’t allow unregistered securities and as such a staking project may not be available to you.
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Are there any additional charges for staking? Some exchanges will take a fee out of the annual staking yield.
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What is the staking reward yield? This refers to the rate to return that can be expected for staking the tokens. In some projects the rate will be fixed whilst in others it may be variable.
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What is the lock-up period? This is the amount of time that you are unable to withdraw the tokens that you have staked.
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What is the minimum holding? This is the minimum number of tokens that can be staked in order to participate in the staking.
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Look carefully at each of your potential staking projects. It is customary in crypto projects to write a ‘white paper’ which is typically found on the projects web site. Whilst completely understanding the project is often beyond the technical abilities of most individuals, certainly make an attempt to understand the business case behind the project. Additionally, research the community associated with the project. Ask yourself how active the community appears to be? Is there plenty of social engagement (beyond just pumping pricing!).
Top 5 staking organizations
| Organization | Rating |
|---|---|
| Bitcoin Suisse | |
| CakeDeFi | |
| Coinbase | |
| Bitfinex |
Top 5 staking organizations for Ethereum
| Organization | Terms | Rating | APY Rate |
|---|---|---|---|
| MyContainer | Flexible | 10.8% | |
| Stakefish | Fixed (7 days) | 10.5% | |
| Everstake | Fixed (7 days) | 8.00% | |
| Staked | Flexible | 6.80% | |
| Kraken | Fixed (7 days) | 5.50% |
Top 5 staking organizations for Cardano
| Organization | Terms | Rating | APY Rate |
|---|---|---|---|
| MyContainer | Flexible | 8.10% | |
| Stakefish | Fixed (7 days) | 7.50% | |
| BTSE | Fixed (60 days) | 5.45% | |
| Everstake | Fixed (7 days) | 5.30% | |
| Guarda | Flexible | 5.00% |
Top 5 staking organizations for Tezos
| Organization | Terms | Rating | APY Rate |
|---|---|---|---|
| OKEx | Fixed (90 days) | 10.6% | |
| OKEx | Fixed (60 days) | 8.53% | |
| Stakefish | Fixed (7 days) | 8.00% | |
| OKEx | Fixed (30 days) | 6.75% | |
| Staked | Flexible | 6.09% |
Top 5 staking organizations for Solana
| Organization | Terms | Rating | APY Rate |
|---|---|---|---|
| Staked | Flexible | 7.44% | |
| P2P Validator | Flexible | 7.00% | |
| Everstake | Fixed (7 days) | 7.00% | |
| Kraken | Fixed (7 days) | 6.50% | |
| Stakin | Fixed (NaN days) | 6.45% |
Top 5 staking organizations for Binance Coin
| Organization | Terms | Rating | APY Rate |
|---|---|---|---|
| Binance Chain Staking (Validator BNB48 Club) | Fixed (7 days) | 10.0% | |
| Binance Chain Staking (Validator Legend II) | Fixed (7 days) | 9.03% | |
| Binance Chain Staking (Validator Legend III) | Fixed (7 days) | 8.78% | |
| Binance Chain Staking (Validator pexmons) | Fixed (7 days) | 7.99% | |
| Binance Chain Staking (Validator Legend) | Fixed (7 days) | 7.91% |
The organizations in this guide
Buy, sell and earn crypto assets with a regulated Swiss company. The bank guarantee by a state-backed Swiss Cantonal Bank and our audited cold storage solution are some of the reasons why clients trust us with over CHF 5 billion in cryptocurrencies.
Cake is a platform that empowers individuals to be in control of your finances by creating cashflow and harnessing the potentials of Decentralized Finance.
Coinbase is a digital currency wallet and platform where merchants and consumers can transact with new digital currencies like Bitcoin and Ethereum.
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Crypto Wallet supporting 50+ blockchains and 10K+ tokens. Buy, stake, exchange, send, and receive.
OKEx is a centralised cryptocurrency exchange that was founded in 2017. The company is based in the Seychelles.
The services provided by OKEx include spot, margin, options, perpetual swap, DeFi, lending and mining.
Everstake provides a tool that makes it far easier to stake token on popular Proof of Stake projects. Investors can use Everstake to stake against projects such as Dash, Cosmos, Algorand, Harmony, and more.
Kraken is the best Bitcoin exchange for converting to and from US dollars, euros, British pounds and Japanese yen.
Stakin is a devoted validation service provider for Proof-of-Stake blockchain networks. With our products, token holders can earn interests on their holdings and shape the future of the networks in which they believe.
Enjoy passive income from over 100 assets.
P2P Validator helps investors compound their cryptocurrency investments through secure staking. We offer high-uptime, secure staking with advanced monitoring & support.
The leading investors in crypto trust Staked to deliver the optimal staking rewards reliably and securely across the broadest range of assets.
The leading validator for Proof of Stake blockchains. Delegate to us, stake with us.
Binance is a cryptocurrency exchange that provides a platform for trading various cryptocurrencies. As of January 2018, Binance was the largest cryptocurrency exchange in the world in terms of trading volume.
BTSE is a financial technology company that utilizes Bitcoin and cryptocurrency technologies to develop real-world financial products.
Chris
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