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Staking cryptocurrencies has largely become a primary form of earning passive income in the crypto space.
In recent months, there has been a noticeable growth in the number of staking services providers, with a growing number of crypto-exchanges and platforms adding support for proof-of-stake (PoS) tokens opening a gateway for staking.
Following the growth in the number of proof-of-stake digital assets, there has also been a consequent increase in value locked in staking platforms. Currently, the value locked in DeFi staking platforms is between $21-$23 billion, and similar growth is expected in 2021. In this guide, we will look at crypto staking in detail as well as the best crypto staking providers in 2021.
Proof-of-Stake and Proof-of-Work are the two principal means of achieving consensus in blockchain networks. Unlike PoW, which involves mining, which requires computer-intensive processing, PoS networks require network participants to achieve distributed consensus by staking the network's native assets.
Stakers function to validate transactions on the network where the winning validator is selected via a combination of random selection as well as the amount a participant is staking. Once the winning staker validates the transaction, they receive a reward in the form of new coins. The amount staked functions as collateral for validating transactions.
In simple terms, crypto staking is essentially holding or locking funds in a crypto wallet to participate in validating transactions and securing a PoS-based blockchain network. In return, stakers are incentivized for validation transactions or finding a new block based on the token they’ve staked.
How do Staking Platforms Come in?
Cryptocurrency staking is quite technical and requires stakers to have a bit of technical knowledge to be successful. Besides, stakers need to be online 24/7 to maximize their chances of earning rewards. This may be demanding for ordinary individuals who may not understand the technicalities of crypto staking.
As a result, staking providers, also commonly referred to as staking-as-a-service platforms, allows for a more seamless staking experience, significantly helping non-technical crypto investors to stake.
Staking platforms essentially lower the technical barrier to staking by acting as a third-party service provider that takes care of the technical aspects of the staking process and validates stakes on behalf of investors. In return, the staking platforms charge a fee, which is usually a percentage of the staking rewards.
By charging a percentage of your staking rewards, staking providers make staking seamless and allow anyone to participate in the crypto staking process. Here are the top five cryptocurrency staking providers in 2021.
Binance is one of the most popular cryptocurrency exchanges with an average daily trading volume of $3.88 billion. The platform offers three forms of crypto staking, i.e., locked staking, flexible staking, and DeFi staking.
The locked staking option allows stakers to lock their cryptocurrencies over a period of between 7 to 90 days, with staking rewards ranging from between 2.8%-16% APR.
The platform supports some PoS coins for staking, including BAND, DAI, USDT, BNB, BUSD, EOS, XEM, IRIS, DASH, ONE, and GXS. On December 1st, 2020, the platform launched staking support for Ethereum 2.0 with an annual return of 9.56% with no reward fee.
Binance flexible staking option allows users to earn staking rewards on certain cryptocurrencies without a definite lock-up period. This means that staker can withdraw their staked coins at any time.
The flexible staking option offers a lower return on investment (ROI) ranging between 1-16%. Supported coins for flexible staking on Binance include TOMO, Ark, EOS, THETA, LOOM, KAVA, Tezos, QTUM, ATOM, TRON, Algorand and many others.
Binance staking also supports DeFi staking with annual returns ranging from 12-25%. Some of the DeFi coins available for staking on the platform include Compound DAI, BTC, BUSD, and BNB. However, Binance warns users on DeFi staking, claiming that it doesn’t assume liability for losses incurred if an account gets hacked.
In addition to being the largest crypto exchange by trading volume, Binance offers exemplary staking services. Binance Staking ensures users' funds are safe by leveraging effective security measures as well as provides Secure Asset Fund for Users (SAFU).
While staking on Binance comes with great risks, including the risk of account hacking and changes in return over time, it's still a great platform to earn passive income in 2021 through crypto staking.
MyCointainer is hugely an investor's favorite, thanks to outstanding features coupled with great reward products when it comes to staking providers. The Estonia-based staking platform established in 2018 has largely been credited to be the easiest and safest means of staking PoS coins with high returns.
On the platform, you can stake your preferred PoS coins and earn staking rewards from staking multiple coins simultaneously. It allows investors to choose from over 100 digital assets, including Ethereum 2.0, Fusion, Polkadot, Cosmos, Harmony, Carano, Waves, Loom, Algorand, Tezos, Matic, Band Protocol and Kyber Network, among many others.
The platform also offers advanced automatic masternode staking for selected altcoins. What distinguishes MyCointainer is their heavy focus on user experience - you simply buy or deposit and you start earning rewards automatically. The platform is available both on the Web and as a Mobile app (iOS and Android).
MyCointainer features a built-in exchange with a FIAT to Crypto gateway allowing users to seamlessly buy their favorite coins with fiat money (credit card and Bank Transfers) and Bitcoin (BTC). The exchange leverages multiple API points to enable users to buy PoS coins at the lowest price from different crypto exchanges. Moreover, it also applies SAFU (Secure Asset Fund for Users) as a form of emergency reserve to guarantee funds security.
MyCointainer users can choose between two different reward programs: The Power Zero plan costs €7.30 p/m and doesn’t charge staking rewards on any asset. The Power Max plan is charged at €8.90 p/m and offers stakers plenty of benefits, including zero staking fees, a chance to win giveaways, and random free coins from their partners - distributed to your account every month.
MyCointainer employs the latest security features to secure stakers’ coins. The platform stores all staked coins offline using a secure wallet and boast of KYC/AML security features with a double-checking system. Most importantly, the platform is regulated by the Estonian Financial Intelligence Unit (FIU) has a recently renewed license (No. FVT000255). Thus, users are assured of top security of their coins.
MyCointainer has partnered with Crypto.com to develop a new main-net release for additional functionalities. In addition, it has partnered with top crypto projects, including NEM, QTUM, Divi, Waves, and others, to enhance mainstream crypto adoption. A user-friendly interface, FIAT to Crypto gateway, MyCointainer Power Plan, automated staking, and direct interest in staking rewards are some of the features that make MyCointainer a great staking platform to seamlessly earn passive income in 2021.
New York-based Staked is another exemplary staking platform to consider in 2021. The platform offers staking on over 30 PoS coins, including Ethereum 2.0, Kava, Polkadot, Cardano, NEAR Protocol, Synthetix Network, Livepeer, etc., with annual staking rewards ranging from 5% to 100%. The staking platform leverages an automatic smart contract system, i.e., Robo Advisor for Yield (RAY), to offer stakers to understand their staking infrastructure and receive the best possible rewards based on their investment risk profile. Staked charges a reward fee of between 5-10% based on the staked coin.
Staked.Us implements staking security by using Kubernetes to distribute across 5 clouds with automated failover. The platform also claims to frequently carry out audits to ensure users' funds' security. While the staking provider doesn't support the direct purchase of PoS token on the platform, it features an API to make staking integrations easy and seamless. The platform doesn't mention a word on regulatory compliance so we can assume that your staked funds will be safe and yield the expected rewards. In addition to crypto staking, Staked.Us also offers DeFi lending on several digital assets.
Founded in 2019, Canada’s top blockchain infrastructure and staking providers, Figment Networks allows you to seamlessly stake your coins and earn rewards with over 20 protocols, including Cosmos, IRISnet, ICON, Algorand, Livepeer, Harmony, Chainlink, Kava, Terra, and others. The platform claims to be the first "Legal and Compliant Token Staking Provider" backed by two leading blockchain venture firms; Prota & Lemniscap Ventures. It is a well established team with over 30 years’ experience in building successful internet infrastructure and software companies. It’s an all-in-one staking provider that allows users to stake tokens, build applications, and participate in blockchain governance.
Figment Networks offers a unique type of crypto staking which integrates Web 3 protocols complemented by 24/7 customer support via email, Telegram, and a call. The staking infrastructure is integrated with a network of private and public sentry nodes on Google Cloud Providers, Amazon Web Services, Digital Ocean, OVHcloud, and other public cloud platforms. The platform maximizes staking security and minimizes risk by integrating highly secure Web 3 infrastructure developed from the ground. The simple staking infrastructure also allows for quick integration by third-parties.
Figment Networks staking rewards range between 5-30%, with rewards fees of between 0-15% depending on the PoS coin. The platform offers users an in-built calculator to determine the staking rewards for each supported coin. Besides, users can track their transactions in real-time plus track their level of performance.
Figment Networks is among the most reliable and trusted staking platforms in the crypto market. You can therefore use it to stake coins and earn rewards. However, the limited number of supported digital assets can significantly limit your staking choices.
If you're not new to the crypto space, you've probably heard of Coinbase- a popular crypto platform that features an exchange and wallet, offering different crypto services, including education and automated crypto investing tips. In 2018, Coinbase Inc. launched Coinbase Custody-a digital-asset custodial service platform that operates as a standalone, independently-capitalized business to Coinbase, Inc.
Coinbase Custody is the first crypto custodian to offer staking and active governance for digital assets stored offline. This means that stakers can hold their coins in offline wallets (cold storage), while still staking on the platform to significantly minimize risks synonymous with crypto staking, notably slashing and hacking. The platform supports staking on several PoS assets, including Cosmos, Tezos, Maker Protocol, Algorand, and Solana tokens. The platform is also expected to add other coins, including NEO, ADA, ETH 2.0, and many others. Staking rewards on Coinbase Custody ranges between 6-20%, with varied reward fees on every token.
Coinbase Custody is an excellent option if you're looking to stake cryptos without putting your coins in the line. The platform allows you to stake your preferred supported PoS digital assets while maintaining full custody of the staked coins in your secure offline wallet. The platform is the first of its kind: licensed, comprehensively-insured, and 100% offline staking provider in the crypto space.
As more and more people, including institutional investors, are realizing the lucrativeness of the crypto market, crypto staking is fast becoming a trend of earning passive income by simply holding or locking funds in a wallet. Since staking cryptos requires some sort of technical crypto know-how and damming requirements, staking platforms come in handy to allow investors, even those without technical knowledge on cryptos, to stake PoS coins and earn rewards. For only a percentage of your staking rewards, staking platforms lend you their technical expertise and validates stakes on your behalf, enabling you to earn passive income. The substantial growth of crypto staking has seen a boom in staking platforms allowing investors to earn staking rewards seamlessly. If you’re thinking of crypto staking in 2021, you should consider the above best cryptocurrency staking providers.