It is amazing to have passive income, isn’t it? That too in the crypto world, when prices are soaring like never before, a penny earned today might become a pound tomorrow. In order to understand how you can start with staking and earn passive income in cryptos, Let us get started with understanding staking.
What is Staking ?
Staking is the process of participating in Validating the transactions on a blockchain network for a small amount of transaction fee in the Proof-of-Stake Networks. While different networks like BNB, Zil, ADA, ETH2.0, etc., follow Proof-of-Stake consensus mechanism for validating transactions on their network. Validators who validate these Transactions will earn a small fee for validating those transactions.
Who can be Validator ?
Anyone who can validate transactions by holding and committing a minimum number of Tokens towards Validation can become Validator. Different Blockchain networks will have different minimum requirements for one to become a Validator, for instance, anyone with 32 ETH can become a validator for ETH2.0 and BNB have the requirement of committing 10,000 BNB cum running a full node of BNB, etc., Once you met the minimum requirement, you may become a validator and start earning fee passively.
Minimum Requirements are Too High ?
Yes we understand, minimum requirements are too high for a small investors to stake their idle tokens in the wallet and earn passive income. However, not becoming a Validator is not the End of World. There are other ways where you can stake and still earn passive income.
But How ?
You can become a Delegator. Delegator delegates their tokens with Validator towards staking and earn income on the funds committed. However, funds delegated by delegator might become locked for certain amount of time. For instance, to become a delegator in BNB Smartchain, one should delegate a minimum of 1 BNB with a validator for a period of minimum one week.
How much can you earn ?
Staking rewards can be as high as 35% APY. It depends on different factors like blockchain, validator being involved, etc.,
Different blockchain networks offer different APY on the funds being staked at different intervals. While Zil rewards its users once few days, the Tron network rewards its users once in few hours. It’s not only the network rewarding mechanism but also depends on the Validator for passing the rewards to Delegators.
Where Can I Stake ?
Now that you are aware how staking works and rewards are distributed, let us understand how to Stake .
There are different wallets and Exchanges that provides Staking Services to its users. Below are the list of few such platforms where you can stake and earn passive income.
- Trust Wallet
- Atomic Wallet
- Binance – More Staking and Savings options. Small Amounts can be converted into BNB
- Crypto.com – Staking and Dust conversion (converting micro amounts into CRO tokens)
- CEX.io – Good number of tokens are supported for Staking
- Huobi – Good number of tokens are available.
It will be a great idea to park idle tokens in your wallet and earn passive income without doing much. If you are an investor, it would be a great way to earn cryptos by committing tokens towards staking. However, it should be remembered that different networks offer different APY and have a different locking mechanism as short as 3 days to as long as 3 weeks and much more depending on the network. If you are not in need of funds immediately or in foreseeable future, staking would be a great way to earn some funds. Binance offers a good number of features like saving, Staking, and Earn to park your idle funds and earn. Depending on your need you may utilize their services.
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