If you want to invest in cryptocurrencies, there are many factors to consider. When investing in coins built on decentralized proof-of-stake (PoS) networks, you can use staking, which contributes to a more secure and efficient operation of PoS networks.
The only requirement for staking is to store coins in a cryptocurrency wallet for a long time, for which rewards are issued. Staking coins is similar to depositing and saving in a bank, since in both cases you receive interest on the initial investment. Listed below are some of the best staking coins that you can invest in for profit.
What is cryptocurrency staking?
Cryptocurrency staking is a process that involves depositing funds in a digital wallet for an extended period to support verification of transactions on PoS blockchains. Users earn additional cryptocurrency by participating in transaction verifications.
The main advantages of staking cryptocurrencies:
Cryptocurrency staking does not require additional hardware, unlike mining.
You can earn a certain percentage of your crypto assets.
Staking is significantly less harmful to the environment than mining.
Staking directly improves the efficiency and security of PoS blockchains.
There are some notable differences between mining and staking. Mining is generally carried out using proof of work (PoW) systems. Staking is possible with both PoW and PoS coins. More supported coins – more features!
Both PoW and PoS operate as consensus mechanisms and can validate blockchain transactions without the need for banks or other third parties. The main difference between the two mechanisms is their power consumption.
If you want to participate in staking, then you will first need to get PoS coins. After choosing the coins you want to use, you will need to decide exactly how many coins you want to stake. This process can be done on any major cryptocurrency exchange.
Keep in mind that you can also earn additional income from crypto farming. Although somewhat more complex than staking, crypto farming involves earning coins by lending your crypto assets to various DeFi platforms. In the case of crypto farming, you can borrow crypto assets for a period of a couple of days to several months. The larger the loan amount, the higher the rewards.
Staking risks
We must not forget that cryptocurrency staking has both advantages and risks. Here are the main ones:
Cryptocurrency prices are relatively volatile, i.e. they can depreciate quickly. If prices fall too much, then you may incur losses.
It may take up to seven days to withdraw assets from staking. By the way, Bybit has implemented flexible staking, which allows you to instantly withdraw assets from staking.
When using coins for staking, it is important to understand that these coins will remain locked for a short period of time. This means that during this period of time you will not be able to do anything with these assets.
What are the best coins to stake?
Below is a detailed overview of the top 19 staking coins. Coin tickers are listed after the name of each crypto platform.
BitDAO (BIT)
With BIT backed by renowned backers such as Peter Thiel and Pantera Capital, investors can be confident that this digital currency asset will become one of the next major exchange trading tokens. BitDAO is one of the world’s largest Decentralized Autonomous Organizations (DAOs) committed to developing the DeFi space to realize its vision of open finance and a decentralized tokenized economy. BIT token holders can shape the future of BitDAO by voting on major protocol upgrades, token swaps, and other proposals.
To start staking BIT, you will need to register on Bybit Launchpool. After registering with Bybit and passing the Level 1 KYC verification, simply transfer BIT to your Bybit Earn account and start the staking process. With a prize pool of 1,500,000 BIT tokens and an average annual return of 14.77%, you will certainly be hard-pressed to find similar coins with comparable growth potential and staking rewards.
Tether (USDT)
If you are afraid of market fluctuations and the loss of value of the token, then try staking a stablecoin. Although the choice of a particular stablecoin is a personal decision for each investor, we recommend Tether (USDT) due to its huge trading volume. And for liquidity, this is just great, because with high volume, you will never have a problem exchanging USDT for other tokens.
If you are interested in USDT staking, then use flexible staking in our Bybit Earn Center and get up to 3.5% per annum. USDT is extremely stable, making it one of the best tokens for beginners. Add to this a convenient platform with instant withdrawals and get the perfect investment.
Ethereum 2.0 (ETH)
Ethereum 2.0 or Eth2 is the second most popular cryptocurrency provider in the world after Bitcoin. The minimum staking threshold on the Ethereum network is 32 ETH. Previously, Ethereum used the PoW consensus algorithm. However, it has recently switched to PoS and over $12 billion in ETH has been invested in staking this asset.
Before you start deploying Ethereum 2.0, please note that this platform is in early access and is still being tested before the official launch. Until the launch of version 2.0, the placed coins will remain on the network. It is assumed that the launch of Eth2 will take place in the first months of 2022. With flexible staking in our Bybit Earn Center, you can expect up to 2.5% APY.
USD Coin (USDC)
Confused about USDT and USDC? Now we will explain everything. USD Coin (USDC) is also a fiat-backed stablecoin and is often used to transfer funds due to its high value and liquidity. Unlike Tether, USDC is audited monthly by Grant Thornton, LLP. This stablecoin is as transparent as possible, because reports are published online in the public domain, proving that this asset is indeed backed by fiat currency and its equivalents.
Get all the benefits of USDC flexible staking at our Bybit Earn Center, where you can earn up to 8.88% per annum. You simply won’t find a better deal. Stable value and absolute transparency – USDC is truly pegged to the dollar. But this passive investment can be made even better with our flexible staking mechanism, allowing you to withdraw capital from it at any time.
