Whether you’re new to crypto or more of an experienced investor, chances are you’ve heard of staking. Recently, staking has become a hugely popular way for crypto investors to generate passive income by locking some of their tokens away to help secure the blockchain network.
Whether you’re new to crypto or more of an experienced investor, chances are you’ve heard of staking. Recently, staking has become a hugely popular way for crypto investors to generate passive income by locking some of their tokens away to help secure the blockchain network.
Staking crypto is an incredibly easy and user-friendly process. However, there is one confusing element: Which staking coins do you choose?
With the variety of available options and more being introduced every day, it can be a challenging landscape for many investors.
In this article, we’ll take a look at the five best coins for staking that offer high rewards. Those coins are Ethereum, Cosmos, Tezos, Algorand, and NEAR Protocol.
But first, let’s define staking.
What is Staking?
Staking is the process of locking up cryptocurrencies for a prolonged period of time to participate in the validation of transactions and security of the blockchain network. In return for investors providing their coins for staking, they receive rewards in return for their support. These rewards come in the form of a pre-agreed percentage yield or a percentage of the network's overall transaction fees.
5 Top Staking Coins to Buy in 2023
The below table details the most important factors to consider when deciding which crypto-staking coins are best for your portfolio and investment goals.
In addition to the comparison above, some investors will want to weigh up variables such as interoperability, environmental impact, and security, as they will impact the overall feasibility of staking these coins.
While one coin may offer a higher yield, the network itself may be less popular and not have the scalability to grow. Therefore, the value of your investment might stagnate or fall.
1. Ethereum
Ethereum is the most popular staking coin and offers an annual yield of around 4.5%, but this can fluctuate higher or lower. As one of the most reliable and well-recognized blockchain networks, Ethereum is a great choice for long-term investors, as there are no doubts about the longevity and trustworthiness of the network.
However, with a minimum deposit of 32 ETH, Ethereum staking isn’t an option for all investors. Those with smaller value portfolios will have to look elsewhere for staking coins.
Pros of ETH Staking
- High annual yield
- High security
- Good scalability
- Good interoperability
- Low environmental impact
Cons of ETH Staking
- High minimum deposit requirement
2. Cosmos
Cosmos offers a high level of interoperability, making it the preferred network of choice for people interested in DeFi and cross-chain applications. As a relatively new network, it’s able to offer an impressive annual yield of 7%.
This staking reward is higher than some of the more established blockchains, highlighting that it could be more of a potential risk.
Still, with the minimum deposit requirement of just 100 ATOM, it is a more realistic staking option than Ethereum.
Pros of Staking Cosmos
- High annual yield
- Good security
- Good scalability
- Excellent interoperability
- Low environmental impact
Cons of Staking Cosmos
- The network isn’t as recognized as Ethereum
3. Tezos
Tezos is a unique blockchain, as it uses its own staking mechanism—liquid staking. What’s great about Tezos is that you don’t have to lock your coins away to stake them. You can still have access to them and pull them out at any time. This provides investors with greater flexibility and freedom when it comes to managing their portfolios.
Additionally, Tezos offers an impressive 5% APY, which is higher than Ethereum.
Pros of Staking Tezos
- High annual yield
- High security
- Good scalability
- Low environmental impact
- Liquid staking and portfolio flexibility
Cons of Staking Tezos
- Ethereum and Cosmos are more well-established networks
4. Algorand
Algorand is a scalable, secure, and decentralized blockchain platform focused on DeFi, NFTs, and smart contracts. With just 0.1 ALGO required as a minimum deposit for staking, Algorand staking has a small startup cost.
With an annual yield of around 5%, ALGO is a great staking coin for those with smaller portfolios who prefer less risk.
Pros of Staking Algorand
- High annual yield
- High security
- Excellent scalability
- Low environmental impact
- Low minimum deposit
Cons of Staking Algorand
- Less recognized networks than Ethereum, Cosmos, and Tezos
5. NEAR Protocol
NEAR Protocol is an exciting new blockchain that is completely carbon-neutral. So, if the environmental impact of cryptocurrencies is a concern to you, NEAR Protocol can be a great investment opportunity.
As a less established network, NEAR Protocol offers an APY of 10%. This high yield is designed to attract more people to stake their coins.
Investors have to stake a minimum of 1 NEAR, making it a feasible staking option for all investors.
Pros of Staking NEAR Protocol
- High annual yield
- Good security
- Good scalability
- Excellent interoperability
- Carbon-neutral
- Low minimum deposit
Cons of Staking NEAR Protocol
- It is a newer blockchain with less track record than Ethereum, Cosmos, Tezos, and Algorand
Key Takeaways About the Best Coins for Staking
Choosing the best crypto-staking coins for you comes down to your investment goals, risk tolerance, and overall values. For those more risk-averse looking to play it safe with a reliable, secure, and steady investment, Ethereum is a good option. However, if you’re looking to maximize APY with a blockchain that shows potential for significant growth, then Algorand or NEAR Protocol might be the preferred option.
Whichever you choose, invest the time to study them carefully and check that they align with your goals.
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