Getting Richer with Staking your Cryptocurrency in 2022.
Buy it for a lower price, hold it, and then sell it when the prices are at roof. This is a general wisdom that most new crypto traders do share. However, most of this buying and selling requires you to stay vigil of the prices. It sometimes can even become a full-time job.
But is there any other way to do it? Yes. There are couple of ways including crypto trading with the help of the best crypto signals provider. It minimizes your risk while increasing your winning chances.
However, if you’re looking for the safest option, there’s one too.
Staking your cryptocurrency
Staking is a simple approach. You hold your cryptocurrency in an account and then let it collect interest & fees. Prima facie, it’s much like having a bank deposit. Blockchain validators use these funds for their requirements. In exchange, you get a fee every time they facilitate a transaction.
Staking is growing as a popular crypto investment strategy, especially among passive investors. Returns hugely depend on the investment you are making. If you are staking a very stable coin, the returns might just be what a bank gives you. But with increased risk, and lock-in period, the returns also increase.
Benefits of Crypto staking
The benefits associated with crypto staking include –
- Staking improves the efficiency and security of PoS blockchains.
- You can a large amount of passive income.
- There’s no need of any expensive hardware on your part.
- You are much more environment-friendly if you stake rather than if you mine.
Risk of Crypto staking
- There’s a lock-in period for good returns. During this period, you cannot use these assets as you otherwise would. Higher returns need a higher level of commitment.
- While you can unstake your coins at any time, it takes a few days before you get hands-on with your cryptocurrency. It means that this investment instrument is a little less liquid than you would want it to be. However, some crypto exchanges like Bybit are bringing in the facility for instant withdrawals.
- Cryptocurrencies are volatile. If you slack in your research to find a good-enough coin to stake, you are probably going to lose your money. That’s why, it’s better to check out the market cap of the coin along with the big players that are investing in it.
Best Crypto coins to stake this year
Just like other strategies, staking has its own risks. The best way to mitigate them is to do your due diligence before investing your money into any crypto project.
Here are a few crypto coins you should look into while making a decision –
- BitDAO (BIT)
With its ambitious vision of an open and decentralized economical environment, BitDAO stands firm on its fundamentals. Its market cap is big enough, has big names backing it up, and is aiming towards a real future utility.
- Ethereum 2.0
If there’s a blockchain that’s moving towards the future with great strides, it is Ethereum. It is second only to bitcoin in popularity. Its first version, i.e. Ethereum or Ethereum 1.0 worked on the PoW model. Ethereum 2.0 is the updated, and hopefully improved, version of the first release.
- Terra (LUNA)
Terra features in this list especially due to the ease with which you can invest in the coin. The annual staking reward is good enough at 12.10%, substantially higher than a lot of investment opportunities in the market.
- Polkadot (DOT)
Polkadot gives an average annual return of 14% making it one of the best staking options in the market. It is a reliable investment opportunity as it is based on scalable, multi-chain technology. However, a high entry price might dissuade some from choosing Polkadot as their first choice.