Staking in the cryptocurrency world is like earning interest on your savings account, but with digital currencies. It’s a way to put your crypto holdings to work and earn rewards. There are two main types of staking: one is for supporting the operations of certain types of blockchain networks, and the other is for earning interest in various financial applications, known as DeFi, or decentralized finance.
Staking in Proof of Stake networks
Proof of Stake (PoS) networks rely on holders of their cryptocurrency to keep the network secure and running smoothly. For example, if you have Ethereum (ETH), you can 'stake' it, which means locking it up in a special wallet to help the network operate. In return, you earn more ETH over time. Think of it like being paid for providing a security service. You can do this directly through certain wallets or platforms that group many stakers together.
Staking in DeFi protocols
Staking in DeFi is a bit different. Here, you lock up your crypto in a DeFi platform and earn rewards, usually in the form of more crypto. This can include all sorts of digital currencies like Ethereum (ETH) or even digital versions of dollars (like USDC). Lending platforms like Aave or Compound are places where you can do this. The reward comes from other users who pay to borrow your staked assets.
Simple ways to stake different cryptocurrencies
Staking offers a way for cryptocurrency holders to earn staking rewards, but the process can vary widely depending on the asset. Here's a more detailed look at how staking works for different cryptocurrencies:
Name | Ticker | Est. APY | Providers |
Ethereum | ETH | ~4% | Lido, Rocket Pool |
Solana | SOL | ~9% | Jito, Marinade |
Binance Coin | BNB | ~3% | Binance |
Polygon | MATIC | ~10% | Polygon Staking |
Polkadot | DOT | ~18% | SubWallet |
Cosmos ecosystem | ATOM, TIA, INJ | ~10-20% | Keplr Wallet |
Avalanche | AVAX | Varies | Core Stake |
Tezos | XTZ | Varies | Kukai Wallet |
Algorand | ALGO | Varies | Pera Wallet |
Cardano | ADA | Varies | Yoroi |
Stablecoins (USDC, USDT, DAI) | Various | Varies | Curve, Aave, Compound |
- How to stake Ethereum (ETH): Staking ETH involves participating in the network's security. While running a full validator node requires 32 ETH and considerable technical knowledge, services like Lido and Rocket Pool simplify the process. They allow users to stake smaller amounts and earn staking rewards without the complexity of operating a node.
- How to stake Solana (SOL): For Solana, staking is also facilitated by third-party services or pools such as Jito and Marinade. These platforms enable users to contribute to network security by staking their SOL, earning rewards without needing the expertise to run a validator node.
- How to stake Binance Coin (BNB): BNB staking is streamlined through the Binance exchange. Users can stake their BNB directly on the platform, which custodies the tokens and allocates staking rewards, simplifying the process.
- How to stake Polygon (MATIC): Staking MATIC involves delegating your stake to a validator integrated with the Polygon network. The Polygon Staking platform allows users to stake their MATIC and earn rewards while contributing to network security.
- How to stake Polkadot (DOT): DOT staking can be done directly through SubWallet by joining a staking pool. This approach allows users to earn staking rewards with at little as 1 DOT.
- How to stake Cosmos ecosystem tokens (ATOM, OSMO, TIA, INJ): Staking for Cosmos ecosystem tokens like Cosmos Hub (ATOM), Osmosis (OSMO), Celestia (TIA), Injective (INJ) and more, can all be executed through the Keplr wallet by delegating to a validator integrated with the Cosmos Hub. This method supports the Cosmos network's security and lets users participate in its ecosystem and earn staking rewards.
- How to stake Avalanche (AVAX): In Avalanche, users can easily delegate their AVAX through Core Stake. Users stake AVAX by selecting trusted validators, thereby supporting network operations and earning rewards.
- How to stake Tezos (XTZ): Tezos allows users to delegate their XTZ using the Kukai wallet, contributing to the network's security and consensus mechanism.
- How to stake Algorand (ALGO): Algorand pays participation rewards for simply holding at least 1 ALGO in an on-chain wallet like Pera wallet, allowing users to support network operations while earning rewards. Users can further boost their earnings through governance rewards by committing a percentage of their ALGO and voting on blockchain issues.
- How to stake Cardano (ADA): Cardano allows users to stake their ADA through wallets like Yoroi, where users can delegate their tokens to trusted validators and earn staking rewards while contributing to the network's security.
- How to stake stablecoins (USDC, USDT, DAI): Staking stablecoins typically involves using DeFi platforms like Curve or Aave, where they are lent out or used to provide liquidity, generating a return for the staker. For example, you can lend USDC on Aave to borrowers to earn interest payments.
Simplifying your staking journey
Staking offers a great way for earning passive income in the crypto world, catering to a range of investment strategies and risk tolerances. As we explore the world of staking, it’s important to note that navigating DeFi investments can be complex, especially for those new to the space. This is where we step in.
Exponential offers a simplified, one-click investing solution across various DeFi pools, making it effortless to get started. With liquid staked offerings for ETH (stETH), MATIC (stMATIC), and AVAX (sAVAX), Exponential is designed to take the guesswork out of staking, providing an accessible gateway to earning yield in DeFi for investors of all experience levels.