People around the crypto world are talking about proof-of-stake cryptocurrencies. If you’re unaware of these crypto-assets, this article is just for you.
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What is Proof-of-stake in cryptocurrency?
Cryptocurrencies are decentralized. There is no central authority or banks are involved. There should be a proper method to variety every transaction performed on the blockchain. One of the best ways many cryptocurrencies use is the “Proof-of-stake” consensus mechanism. PoS is used to validate every crypto transaction. Thanks to PoS, crypto users can stake their own crypto coins. After a successful transaction, the new block will be added to the blockchain. Proof-of-stake mechanism is energy efficient, thereby it has gained popularity and attention from global crypto investors.
Things to know about proof of stake crypto
Before investing in proof of stake cryptocurrency, you need to understand a few things. Crypto staking can be performed with a few crypto’s, their blockchain must use a proof of stake consensus mechanism. The system will select the transaction validators. The validators can be volunteers who help add new blocks to the blockchain. Also, depending on the tokens they have locked in their wallet.
Great news!!! Proof-of-stake consensus mechanism provides better transaction speed, easy-to-use, low power consumption and more.
There are hundreds of proof-of-stake cryptocurrencies available in the market. Investing in these cryptos can bring you huge returns. These cryptocurrencies have several technical and economic advantages to investors.
Following are the best proof of stake cryptocurrencies
Ethereum
Ethereum doesn’t need any introduction. Ethereum is a profitable proof-of-stake cryptocurrency. There are over 2800 DApps built on the Ethereum network. ETH is the native token for the Ethereum network. Users can stake their ETH coins by becoming Ethereim’s node operator on the network. When you’re planning to stake, you need to hold at least 32 ETH coins. Another way to stake Ethereum is using the centralized Ethereum (ETH) staking services such as Coinbase, Binance, Kraken and more. Few investors are using Lido Finance to stake their Ethereum tokens. According to your convenience, you can choose the best way to stake your Ethereum coins. You can earn upto 7% on staking Ethereum tokens. Though it might sound less when compared to other coins, Ethereum is the popular proof of stake cryptocurrency.
Binance (BNB)
Binance is one of the top crypto exchanges worldwide based on its daily trading volume. It was launched in 2017. BNB is the native cryptocurrency of Binance exchange. Users can stake “BNB” cryptocurrencies and earn upto 30%. Sounds amazing right? Yes! Users use “Trust wallet” for staking their BNB coins, this is the leading mobile wallet available in the market. BNB tokens are available on multiple exchange platforms, including Bianace, FTX, etc.
BNB provides locked staking, it’s the way of holding users’ funds in the crypto wallet in order to support multiple operations of the network. Users can redeem their tokens anytime. Keep a note, the redeem period may vary from one token to another from the blockchain network.
Solana (SOL)
Solana is the popular decentralized blockchain that is supporting smart contracts. It means users can build their own decentralized applications (DApps) on Solana. The native token for Solana is “SOL”. It was founded in 2017. Solana works differently for validator nodes. The platform doesn’t need any minimum amount of Solana tokens required to be a validator node. Every validator is responsible for Solana’s blockchain. Every node will be a leader who can create transaction blocks. When more SOL tokens are staked by the validators, there will be high chances to be chosen as leaders. On the Solana network, the validator will be the leader when they create 4 transaction blocks.
Staking Solana crypto coins is another way to make passive money. Many investors are earning staking rewards with ease. On the network, the rewards will be paid in the form of Solana. As per Solana, staking denotes, you’re agreeing to lock up a certain amount of Solana (SOL) coins. Solana validators are earning huge SOL coins. You can earn around 6.5% rewards by staking SOL coins.
Cardano (ADA)
Cardano is popularly known as the 3rd generation blockchain platform. Users can build and run smart contracts without any hurdles. The native cryptocurrency of Cardano is ADA. Cardano’s native coin is used to facilitate every transaction on a network.
Basically, staking rewards can be earned in two ways
- Running stake pool
- Stake delegation
If you’re a newbie you can check “Staking Reward Calculator” on Cardano. For an instant, if you’re planning to stake 1000 ADA coins, you can earn 46.08 ADA coins annually.
There are several places to stake your ADA tokens. Stake on multiple platforms and increase your passive income. The popular platforms are Daedalus, Yoroi, Binance, etc.
Terra (LUNA)
Terra is the popular blockchain protocol that allows investors to build their stablecoins that can be pegged to fiat currency. It includes dollars, euros, etc. Keep in mind that these stablecoins cannot be backed by fiat currency. But they can maintain the price through algorithms and also LUNA tokens. The native token of Teraa is LUNA.
Similar to other proof-of-stake cryptocurrencies there are two ways to stake LUNA tokens i.e
- Delegator
- Validator
Users don’t need to meet any requirements while delegating LUNA tokens while staking the rewards. It can be done in Terra’s native wallet. While staking LUNA coins as a validator can be difficult. Because users need to install the Terra Core tool and run the validator node. The rewards may vary depending on your approach. If you choose a delegator, you can earn upto 10% annually.
Tezos (XTZ)
Did you know, Tezos is the popular smart contracts PoS blockchain? Yes! With Tezos smart contracts, users can use them for formal verification and allow them to be verified and secured. The native token for Tezos is XTZ. Most users are developing decentralized applications and discussing new crypto assets with smart contracts. The native coin XTZ will fuel the platform and allow users to participate during voting.
Tezos holders can commit desired coins in exchange for validating blocks and win rewards through the baking process. Users who can stake around 8,000 XTZ coins on the Tezos network will also participate in voting.
The profitability can vary depending on the way you choose. Solo bakers are earning 8% as staking rewards. On the other hand, people who choose delegation can earn 6% as a reward.
In a nutshell
Thanks to proof-of-stake! With this approach, users can validate the block transaction according to the total number of crypto coins or token validator stakes. PoS is used by holders to validate the blockchain and also add a new block. With staking, you can earn a good passive income. Invest in these proof of stake cryptocurrencies and earn passive income by keeping yourself risk-free.
