Top Staking Coins and Tokens for Earning Passive Income
There are different ways crypto users can make an income, including different types and strategies for trading, investment, mining, and staking, among others. Below, we will cover some of the top tokens and coins based on their yield, low risk levels, and low barriers to entry.
Data including Estimated APR, TVL Staked, and Minimum Deposit are recorded on July 17, 8/17/2023 and are subject to change.
As the leading POS (Proof-of-Stake) cryptocurrency, Ethereum is the ideal choice for users looking to earn passive income via staking. To get started, all you need to do is purchase some Ethereum (ETH) from an exchange and hold it in a wallet compatible with staking. This differs from direct staking which requires a minimum of 32 ETH because this method allows you to stake with any amount of ETH through pools. With an estimated APR of 2.48% and the need to validate transactions, Ethereum is a great choice for those looking to earn passive income through staking.
With an APR of 25.17%, COSMOS (ATOM) is one of the highest-yielding coins when it comes to staking. This coin utilizes a Bonded Proof-of-Stake (a variant of Delegated PoS) consensus algorithm and requires a balance of the 175th validator. There is 222,656,867 ATOM staked at the time of writing this article. With its high yield and low minimum deposit requirement, Cosmos is a great choice for those looking to earn passive income through staking.
Cardano makes this list with an APR of 4.96%. With a small balance of 2 ADA (refundable fee) as the minimum, it is relatively easy for users to get started with Cardano staking. This coin utilizes a Proof-of-Stake consensus algorithm called Ouroboros and allows users to stake their coins in pools or individually. Overall, it is an excellent choice due to its popularity and low cost of entry.
Known for its lightning-fast transaction speeds, Solana (SOL) boasts an estimated APR of 7.58%. This coin utilizes a Proof-of-Stake consensus algorithm called Proof of History and requires a minimum deposit of 0.01 SOL coins for users to get started. With its fast transaction speeds and respectable yield, this is an ideal choice for staking. As of the time of writing, 386,591,630 SOL is the total locked value in Solana. There are multiple options when it comes to earning crypto from Solana: you can either run a node, delegate SOL, or use a staking protocol or centralized exchange.
Tezos (XTZ) is yet another great choice for those looking to earn passive income through staking. With a minimum deposit of 6,000 XTZ and an estimated APR of 5.89%, this coin has quickly become one of the most popular coins for staking. Tezos provides users with the opportunity to earn income without requiring a substantial investment. This can be achieved through either delegating by running a node (also known as baking) or utilizing centralized staking platforms, such as certain wallets or exchanges.
As the parachain blockchain of choice, Polkadot (DOT) has quickly become one of the most popular coins for staking. This is a multi-chain network and layer 0 protocol, founded by the former CTO of Ethereum. It aims to address the challenges of scalability and interoperability that the current Ethereum network faces. With an interesting APR of 15.31% and a minimum of 350 DOT, Polkadot is another great option for users seeking to earn income through staking.
Last but certainly not least, with an APR of 9.51% Avalanche (AVAX) is a great choice for staking. 2,000 AVAX is the minimum amount needed when staking and it can be done via running a node or delegating your AVAX. Some centralized exchanges also offer staking capabilities. Avalanche Wallet enables a lower barrier to entry with a minimum of 25 AVAX and is much more user-friendly for those that are not proficient in coding languages.
Key Points on Staking
Although staking is a great way to generate passive income by supporting a cryptocurrency project, it comes with certain risks. For certain tokens or coins, staking requires you to lock away your coins for an extended period, reducing liquidity.
It is also important to note that timing plays an important role, because if you stake coins at a high price lock them, you may earn from staking but you could possibly lose a lot more due to price decrease of the underlying token or coin. For that reason, it is advised that you begin staking or locking your coins in during bear markets rather than bull markets,
In addition, it’s important to remember that staking is not a guarantee of profits as these rewards are dependent on the performance and health of the underlying cryptocurrency project. Tax implications may also come into play, so make sure to research the laws in your jurisdiction before investing.
As a final note, it’s important to select a reliable and secure platform or wallet with which to stake.