Crypto Staking Platforms December 2024
Key Takeaways
- Crypto staking is a method to ensure that blockchain transactions are accurate. In return for staking crypto, stakers receive crypto rewards from network transaction fees.
- Crypto staking is a great way for people to earn passive income on crypto they’re holding for price appreciation.
- The main risks in staking crypto center on working with misbehaving “validators” that could be penalized by “slashing,” which reduces the value of your stake.
What Is Crypto Staking, Exactly?
OK, so the term “staking” really gives off strong Buffy Summers vibes. We get it—but there’s nary a vampire nor a Hellmouth to speak of.
The term staking suggests that there’s something at stake. And there is (your crypto). But there are also crypto staking rewards you can earn.
Imagine you’re having a spirited debate with your buddy over how many career home runs Barry Bonds had. You know, a typical Friday night. You bet the next round of drinks on this crucial matter, stating that the correct answer is 762. Your buddy insists that it’s only 726. Then, you ask the others at the bar, who all shout, “762!”
In the end, that mistake will cost your buddy the next round. You earned a little something for proposing the idea–and for being right. In crypto, staking creates a financial incentive to get the numbers right in each blockchain block. Wrong answers can be costly.
Proof-of-stake blockchains work on consensus, a group agreement, like asking everyone in the bar how many home runs Barry Bonds had. But instead of home runs, the debate is over the transactions in each block.
Crypto staking lets token holders pledge their crypto to verify the right answer. In return, stakers are rewarded with a portion of the network’s transaction fees, called “staking rewards.”
Many popular blockchains like Ethereum and Solana use proof-of-stake consensus mechanisms. (What the heck is that, you rightly ask? Scroll to “What is Proof-of-Stake?” for a full definition, but the short answer is: a way to verify new transactions on the blockchain and prevent double-spending.)
Staking can yield anywhere between 3% to 10% annually on your original holdings. Cool.
By the way: If you want to learn about all the ways to earn passive income on your crypto, check out our complete guide to how to earn interest on crypto.
Some of the most popular blockchains pay staking rewards in their native cryptocurrency to encourage users to stake their crypto. It’s like a weird, crypto version of an employer matching your retirement savings with company stock.
Where do these crypto rewards come from? Proof of stake networks pay rewards from network transaction fees, in many cases, but also through token inflation rates. Basically, the network mints more tokens. We don’t want to get too far into the weeds here, but it’s worth a mention.
Token Inflation Rates Explained
Token inflation works much like inflation in fiat currencies. In a nutshell, the more units there are, the less each one is worth as part of the total market.
But token inflation plays a unique role in proof-of-stake networks: It incentivizes the validation on the network by providing tokens as staking rewards.
Again, it’s all about encouraging staking, which these chains require to continue functioning. Check out the table below for some examples.
| Ethereum | Solana | Cardano | |
|---|---|---|---|
| Protocol Staking APY | 6.16% | 7.79% | 5.24% |
| Inflation Rate | 0.52% | 6.63% | 1.90% |
| Adjusted Yearly Staking Reward | 5.64% | 1.16% | 3.34% |
Thanks to this inflationary process, if you’re staking, you’re earning more value/tokens over time—and if you’re not staking, the value of your tokens is actually going down. (See? We weren’t kidding about the word incentive. So get spending or staking, fam.)
And just like companies issuing new shares in the stock market, token inflation undercuts your staking returns. Same pie, with more pieces. So if you expect to make a 6.16% yield on your Ethereum tokens, which carry an annual inflation rate of 0.52%, you’re really expecting gains of 5.64%.
Okay, so you might understand staking a bit better now. But if you’re still curious about how to calculate your staking earnings, here’s how the math works.
How To Calculate Crypto Staking Rewards
Say you stake 10 Ethereum tokens worth each $2,000—for a total of $20,000—through the Coinbase platform. Let’s assume a 4.25% annual yield (APY) on ETH. At the end of the first year, you will have earned $900 on your investment, so your grand total is now $20,900. Leave it staked for another year at the same APY, and your balance will become $21,840.50. And so on.
But let’s say Ethereum loses 4.25% of its value during year one. (It often fluctuates more than that.) That means you’ve merely broken even.
So, how profitable is crypto staking? In most cases, you won’t need a crypto-staking calculator with scientific functions to do the math. Comparing the yield to the expected change in price points you in the right direction.
The lesson? Pay attention to the relationship between a platform’s APY and a token’s volatility.
To channel the legendary Rob Base and DJ E-Z Rock: “It takes two to make a thing go right / It takes two to make it outta sight.”
Hit it!
How Does Staking Work?
There are a number of different ways to stake, from the basic (using a centralized exchange) to the very advanced (running your own validator). We’ll go into that in more detail in “What Types of Staking Are There?” but for now, keep reading.
Ultimately, all staked crypto ends up in the same place—helping to validate the blockchain through a validator node, a computer that verifies the transactions in each block.
But most staked crypto does not come from individuals running their own validator nodes—which can get complicated. (To paraphrase Boromir: “One does not simply run their own validator node.”) Most staked crypto comes from people with little technical knowledge who delegate their crypto to those who know how to run nodes.
Those two parties come together thanks to various entities, such as exchanges and crypto staking pools. String it all together, and you’ve got a staking process. And good news for crypto newbies: In many cases, staking is as simple as choosing how much crypto you’d like to stake and clicking a button.
Like any good financial process, fees are added along the way to make each party’s contribution worth the trouble. But these are well worth it for most people. Someone else does the setup work.
You can bypass the fees by running your own validator. Possible, but akin to working on your own classic Porsche 928s, the kind with the 82-inch timing belt. Sometimes, it’s cheaper to find a pro.
And just a reminder: Staking is only available for proof-of-stake blockchains, so proof-of-work blockchains like Bitcoin won’t support it. Bitcoin staking isn’t a thing. Bitcoin is validated by mining instead, and that’s a whole other topic.
What Is Proof-Of-Stake?
Proof-of-stake is a consensus (agreement) mechanism used to run the blockchain. This means it uses distributed computers (called “nodes”) to agree on the state of the blockchain.
What really happened, and when? That’s what validators collectively determine.
It’s not the only consensus mechanism in crypto. The original is called proof-of-work and is the mechanism that Bitcoin uses. What’s the difference?
- Proof-of-work uses computational work to validate a block. The process makes it prohibitively expensive to change an existing block.
- Proof-of-stake uses crypto staked to validators that reach a consensus, with some blockchains slashing (removing a percentage) the stakes for misbehaving validators.
You can see proof-of-stake in action with Ethereum or Solana.
Pros And Cons Of Staking Crypto
Pros
- Earn passive income with compounding
- Offset natural token inflation
- Help secure the network
Cons
- Conventional staking often requires token lock-up, meaning you can’t access your tokens for a certain period of time
- “Slashing,” while rare, can reduce the value of your holdings
- You may need to change validators if yields change or the pool becomes saturated, meaning there are too many stakers on one stake pool, making the network less decentralized
Benefits Of Staking Cryptocurrencies
If you’re the buy-and-hold type or a long-term investor, staking offers a consistent way to earn additional money on funds that you don’t plan to move in the short term. We wouldn’t call it free money, but we wouldn’t not call it that, either.
Plus, the secret engine of wealth creation is at work: compound interest. Because your crypto staking rewards are paid in the same token you invested—and because those crypto rewards are usually added to your staked position automatically—you’ll earn compound interest that can supercharge your returns over time.
And if you’re the kind of person who’s alarmed by the considerable energy consumption of proof-of-work networks like Bitcoin, you can rest easy knowing that their proof-of-stake brethren are comparatively lightweight. For example, Bitcoin proof of work uses up to 50,000 times more energy compared to Ethereum proof of stake. Great Scott!
One more thing: As we’ve said before, staking helps ensure the network’s security, which in turn helps your investment. After all, a robust network is better for long-term appreciation of the coins or tokens you’re holding.
Risks Of Staking Cryptocurrencies
Staking is generally a low-risk way to earn a yield in crypto. But there are a few possibilities to consider that could make your milk curdle.
The first: platform risk. Staking is most easily done through a centralized exchange like Coinbase. When you stake your crypto through these services, your funds leave your wallet and become the custody of the crypto staking platform. You can see where this goes. Platform hack? A risk. Platform insolvency? A risk. And these things aren’t as impossibly rare in the wild world of crypto as you’d hope. (Delegating to a validator or a staking pool—or running your own validator, you brainiac!—somewhat mitigates these risks.)
The second: liquidity as it pertains to market volatility. There’s often a cooldown period after you “unstake,” during which some or all of your crypto can’t be traded. And, of course, you can’t trade crypto that’s staked. All bad news if you’re the kind of person who prefers to react to the market quickly. (But HODL, right? …right?)
The third: Yields aren’t guaranteed. An inefficient or slow validator may be passed over for voting and rewards. A misbehaved validator—such as one that approves invalid transactions—may be penalized, leading to “slashing.” Also, and more commonly, yields can vary based on staked supply and network demand. So, they vary.
And, of course, there are also the risks common to all cryptocurrencies: you misplace the keys to your crypto wallet, or the wallet itself is breached. Fun times.
Who Should Stake Crypto?
Staking isn’t for everyone, but it can work well for some.
- People who want to earn passive income. Staking earnings accumulate from crypto rewards, no additional action necessary.
- People who invest over the long term. The staking process isn’t made for hopping in and out of the pool. The greatest rewards go to people who HODL.
- People who don’t mind some illiquidity. Your tokens are usually locked when staking (with Cardano as a notable exception). If you need to make a quick change, you might not be as nimble as you’d like. Unstaking often takes a few days.
How To Stake Crypto In 5 Steps
You can stake crypto in many ways, including exchange staking, staking to a validator, or running your own validator. We’ll cover all the options in more detail later, but here’s a quick getting-started guide.
Let’s explore how to make money crypto staking, shall we?
Step 1: Purchase A Proof-Of-Stake Cryptocurrency.
If you have a favorite exchange, go there first. If you’re not sure, use our guides below. Choose an exchange by scrolling to “Where to Stake Crypto” and choose a cryptocurrency by reading “Which Crypto Can You Stake?”
Step 2: Choose A Wallet.
Your wallet must support staking—and specifically, staking for your preferred cryptocurrency. MetaMask (Ethereum and ETH-compatible) and Atomic Wallet (multiple blockchains) are both popular choices, as is the browser-based Phantom Wallet (Solana and Ethereum only). You can also use a hardware wallet, like Ledger.
Step 3: Transfer Your Crypto To Your Wallet.
Using your own wallet, rather than an exchange, offers an additional layer of safety.
Step 4: Join A Staking Pool Or Stake Directly To A Validator.
Review fees and yields and choose the best pool or validator for you. (Not sure? Read on to “Where to Stake Crypto.”)
Step 5: Earn Rewards and Profit!
The crypto staking rewards you earn on many popular blockchains are automatically added to your staked amount, compounding your earnings.
Awesome. And there you have it. Crypto staking explained, no Ph.D. required.
Which Crypto Can You Stake?
Popular token choices for crypto staking include Ethereum, Solana, Matic, Binance Coin, Avalanche, Polkadot, and Cardano.
But the number of cryptocurrencies that support staking continues to grow, and there are hundreds of proof-of-stake coins or tokens in the wild today.
The number of viable staking options, though? That figure is quite a bit smaller. (Some coins or tokens trade so infrequently, or are altogether not viable in the long term, that they prove to be poor choices.)
So if your risk profile is even a little bit conservative, focus on established crypto assets and those that show a promising future.
We’ll break down a few popular options in the table below. But first, a quick note:
We haven’t yet mentioned the term “epoch,” which you probably last used in seventh-grade social studies class. To fully understand the table, you’ll want to know what an epoch means. Check the dropdown below for a full rundown.
Not sure which crypto to stake? Check out our guide to crypto research tools, which could help you decide.
Epoch Explained
In the world of crypto, “epoch” means a predetermined period of time that contains multiple blocks of a blockchain. You can think of them like chapters in a book—and the book is the blockchain.
Blockchains are, as the name implies, a set of blocks chained together. A new block is like a new link in a chain. Epochs are agreed-upon time measurements for blockchains. (“Synchronize your watches!”) But not all blockchains are the same—each blockchain has a different epoch length. Some epochs last just minutes, such as those on Ethereum. Others last upwards of two days, such as the epochs on Solana.
Epochs exist to make it easier to determine milestones in the staking process—for example, when newly-staked tokens start earning rewards, when those rewards are paid out, or when requests for un-staking are processed. Each of these functions is measured in one or multiple epochs.
For what it’s worth, epochs are also used for the actual validation process on the blockchain. Validators are selected to build the next block from the pool of staking validators during an epoch; as epochs turn over and the process repeats, some validators may exit while others may enter.
Popular Cryptos For Staking
| Token | Staking Reward | Methods of Staking Available | Epoch Times | Staking Lockup Period | Inflation Rate | Popular Wallet w/Staking Functionality |
|---|---|---|---|---|---|---|
| Ethereum | 6.16% | Centralized exchange, Custodial & liquid staking pools, Running your own validator | ~6.4 minutes | Indefinite (pending upcoming upgrade) | 0.52% | MetaMask |
| Matic | up to 20% | Exchange, delegating, liquid staking, running a validator | ~3 hours | Varies by platform | ~5% | MetaMask (as a delegator or validator) |
| Binance Coin | varies by platform and lockup length | Lockup on an exchange, liquid staking via third party | daily calculations; monthly payouts | varies; generally in 30 day increments (i.e. 30, 60, 90, 120 days) | ~2.35% | Trust Wallet |
| Solana | 7.79% | Centralized exchange, Delegating to validators, Custodial & liquid staking pools, Running your own validator | ~2 days and 6 hours | No lockup | 6.63% | Phantom |
| Cardano | 5.24% | Centralized exchange, Custodial & liquid staking pools, Running your own validator | 5 days | No lockup | 1.90% | Yoroi |
Often the best staking crypto, especially for beginners, is one that has a large market (so you can exit your position easily) and lots of ways to get started.
Want to learn more about staking specific coins? Check below for more information.
Ethereum Staking
Since Ethereum (ETH) moved to proof-of-stake in 2022, a budding industry of staking solutions has emerged. There are several ways to stake ETH, including:
- Staking through a centralized exchange
- Custodial staking pools
- Liquid staking pools
- Running your own validator
We’ll cover all these in more detail later. Oh, there is a caveat for that last one, too: Running your own validator node requires you to have 32 ETH.
Ethereum Staking Rewards
An average of 4.08%
Matic Staking
Though Polygon is its own layer 2 blockchain, staking Polygon tokens needs to be done on the Ethereum network. You can avoid some gas fees by staking on a centralized exchange such as Binance or Kraken, instead, but those options generally require locking your tokens up for a specified time. However, for those willing to get a little more technical, anyone can run a validator node for the Polygon network, using as little as 1 MATIC!
Matic Staking Rewards
Up to 20%
Binance Coin Staking
Binance Coin, or BNB, is the utility token for the Binance ecosystem. This includes the Binance exchange, where holding BNB provides discounts on fees, and the BNB tokens can be used to pay the trading frees, as well as the Binance Chain, where BNB tokens function as the underlying token for the chain and are used to pay any gas fees.
And though the Binance exchange is the primary home to BNB staking, there are a growing number of third party services which offer staking options as well. For those who don’t want to lockup their tokens, some crypto staking services, such as Stader Labs, offer users the option of liquid staking their BNB tokens, allowing withdrawals at any time.
Binance Coin Staking Rewards
Varies based on lockup period. Up to 12.99% for a 120-day lockup.
Solana Staking
Solana (SOL) uses both proof-of-stake and yet another consensus mechanism we haven’t already mentioned—proof-of-history—to validate transactions on the network. The mix affords Solana a rewards system similar to other cryptocurrencies (that’s the PoS at work) and a speed and capacity advantage (that’s the PoH piece).
You can stake Solana by joining a pool or by running your own validator. You can also delegate directly to a specific validator without using a pool. Since running your own validator node requires a significant investment and technical knowledge, most SOL investors choose to stake with a pool.
Solana Staking Rewards
An average of 6.65%
Avalanche Staking
If you’re looking for a higher return through staking rewards, Avalanche (AVAX) deserves a closer look. The reward APY can be up to 50% higher than with other crypto assets. However, the bar for entry is high: you’ll need at least 25 AVAX to delegate for staking—or 2,000 AVAX to run a validator node.
Avalanche Staking Rewards
An average of 8.94%.
Cardano Staking
Cardano (ADA) is similar to Solana in that its staking ecosystem revolves around pools. With more than 1,000 pools for staking as well as options to stake through Coinbase and other platforms, investors have plenty of ways to get started.
Here’s what’s different: Unlike ETH and SOL, you can sell your ADA, send it to someone else, or use it as collateral while it’s staked. The Cardano blockchain supports liquid staking natively. Cool. More on liquid staking in a bit.
Cardano Staking Rewards
An average of 3.26%
Best Crypto Staking Platforms 2024
| Platform | Standout Feature | APY Range | Minimum Staking Amount | Lock-in Period | Security Features | Payout Frequency |
|---|---|---|---|---|---|---|
| Coinbase | Newbie-friendly platform with support for ETH, SOL, ADA, and more | 2% to 6.12%, depending on the asset | ETH: $0 SOL: $1 ADA: $1 | None | Industry-leading encryption and multifaceted risk management | Daily to quarterly, depending on the asset |
| Nexo | ETH Smart Staking with daily payouts | 3.5% to 12% | $10 | None (swap NETH for ETH) | Third-party custodians for customer assets | Daily |
| Kraken | No waiting period; start earning right away | No waiting period; start earning right away | None | None | ISO/IEC 27001:2013 certification, Cold storage wallets | Once or twice a week, depending on the asset |
| Crypto.com | Boost staking rewards with CRO, Crypto.com’s native token | Varies by asset and lock-in duration | ETH: 0.02 SOL: 0.1 ADA: 25 | Flexible holding term1-month fixed term3-month fixed term | 100% of user funds are held in cold storage wallets | Weekly |
| Stader Labs | Easy staking and unstaking; integrated defi | 3.5% to 15% depending on the asset | None | None (liquid staking) | Third party audits; on-chain monitoring; hefty bug bounties | Liquid tokens accrue value until cash-out |
| Lido | User friendly; liquid staking; connect with popular crypto wallets | Up to 20% depending on asset | None | None (though withdrawals may take a few days) | Third party audits | Daily |
| Origin | Origin Dollar – a yield generating stablecoin; OETH, yield generating ETH token | 5.75% | None | None | Third party audits; hefty bug bounties; guaranteed 48 hour withdrawal period before any new code implementations | Constant; auto-compounding |
| Jito | Liquid staking for SOL token; | ~7% | None | None | JitoSOL token gains value over time | |
| Rocketpool | Liquid staking on any amount; no lockup periods; validator pools | Varies – currently 2.89% | 0.01 ETH | None | Smart contracts audited and open-source | Users give rETH tokens which gain value over time |
Coinbase
Coinbase is one of the most popular exchanges for staking and much more. Coinbase is the first stop for many first-time crypto buyers and gives users room to grow with an exchange, a wallet, a rewards card, an NFT marketplace, and more.
Pros
- Easy to use, start earning in seconds
- Earning displayed immediately upon login
- Start staking with as little as $1
Cons
- Limited selection of cryptos for staking
- Lower APYs compared to other exchanges
In a nutshell, it’s easy. Coinbase offers fewer staking options (just six) compared to many other exchanges. But if you’re a Coinbase user already, you’ll appreciate the way Coinbase displays your earnings in your account dashboard, never leaving you guessing. Staking on Coinbase is as easy as you’d expect, taking just a few newbie-friendly clicks. Options include top cryptos like Ethereum, Cardano, and Solana.
Nexo
Nexo is a Swiss-based crypto platform featuring staking (ETH only), lending, and a crypto exchange. Nexo’s Smart Staking lets users stake ETH with daily rewards. Swap your ETH for NETH (Nexo Staked Ethereum) in one click to start earning. When you’re ready to unstake, use the Nexo platform to swap your NETH back to ETH. Nexo Smart Staking is not available in the US.
Pros
- Stake ETH in low amounts
- Keep liquidity when staking ETH
- Unstake anytime, with a guaranteed 1:1 exchange rate
- Borrow against your NETH tokens
Cons
- Staking not available in the US
With Nexo, you can stake anything you want as long as it’s ETH. But while a bit short on selection, Nexo has a great way to stake ETH to earn a yield while staying liquid. Just deposit your ETH on Nexo’s easy-to-use platform and get an equivalent token called NETH (Nexo Staked Ethereum). You can borrow against your NETH or swap it back for ETH at any time while earning a staking yield on your remaining NETH balance. Nexo calls this Smart Staking, and you can get started with as little as $10.
Kraken
Kraken offers staking for several leading cryptocurrencies (for non-US residents). The time-tested exchange is one of the oldest cryptocurrency trading platforms and now supports more than 185 cryptocurrencies. Kraken was among the first exchanges to provide proof of reserves, a way to verify that the exchange is solvent.
Pros
- High yields if you commit to longer staking durations
- Top staking options, like ETH, ADA, and SOL
- No waiting period to withdraw with flexible staking options
Cons
- Staking not available in the US
- Limited number of cryptos supported for staking
Kraken doesn’t offer the biggest selection for crypto staking we’ve ever seen, but the platform offers some intriguing perks. If you’re willing to commit to a longer bonding (lockup) period, you can make some seriously big yields. For example, Kraken is currently paying 18%-22% APY on Cosmos (ATOM) staking if you commit to a 21-day lockup. Yowsers. Cryptos eligible for “flexible staking” can be unstaked at any time.
Crypto.com
Crypto.com is a fully-featured crypto ecosystem offering several features (and, yes, staking). Crypto.com’s staking yields start lower than other platforms and depend on how much of the exchange’s native CRO token you have staked.
Pros
- Higher yield if you stake CRO in addition to other cryptos
- APYs up to 7%
- Earn a yield on BTC
Cons
- Complicated tier-based rewards system
- Some assets are being loaned rather than staked
- Three-month lockup required for the highest rates
Crypto.com offers a yield on 21 cryptocurrencies. To be clear, some of these options (like Bitcoin and USDC) can’t be staked–which means it’s really lending rather than staking in some cases. If you’re fine with that, you’ll find some yield options that aren’t available on other exchanges. Crypto.com uses its native CRO token to sweeten the deal. Staking CRO can increase yields on other cryptos by up to 3.5 times if you hit the max level.
Marinade
Stader
4.3Pros
- Committed to decentralized staking
- MATIC staking on Polygon
- 40+ Protocol integrations to enhance yields
Cons
- Limited liquidity for Stader liquid tokens
- Primary liquidity pools pair liquid tokens with Stader SD token
- Support for MATIC staking on Polygon: Staking MATIC must be done on the Ethereum network, which can be costly. Stader Labs introduces the ability to stake MATIC on the Polygon network, opening a yield opportunity for smaller positions.
- DeFi integrations: Put your staked assets to work in other DeFi protocols to boost your yield. Options vary by chain and include liquidy pools, lending platforms, and yield optimizers.
- Newbie-friendly UI: If you know the basics of working with a DeFi wallet like MetaMask, Stader makes it a breeze to stake assets like MATIC and ETH with a liquid token.
DeFi can be intimidating if you’re new to the space, but Stader’s user interface and flow for basic liquid staking help both newcomers and seasoned pros put their crypto to work in a jiffy. Smart contract audits from Halborn and Certik help ensure the code is solid, reducing the risk of exploits.
Lido
4.8Lido is by far the most popular staking platform. The platform is responsible for over $10 billion in total value locked (TVL) across its Ethereum, Polygon, and Solana liquid staking tokens.
Pros
- Staking returns that are very close to what you would get running your own node
- Tokens such as stETH and stSOL are well-adopted and can be used as collateral for lending or in other DeFi applications
Cons
- A large portion of all the staked ETH comes from Lido stETH, which makes validators very concentrated and contrary to the decentralized vision of Ethereum
- You can sometimes get larger APYs using other staking services
- Largest liquid staking platform
- Three supported chains: Ethereum, Polygon, Solana
- Lido charges a 10% flat fee on all staked tokens
Since liquid staking tokens are specific to the platforms that generate them (for example, staked ETH through Lido is stETH, while staked ETH through Rocket Pool is rETH), it’s important to pick a platform with a strong future.
Lido has been around for a while and is well-positioned to succeed in the future, so we like it because it seems like a good bet when it comes to liquid staking.
Jito
Jito is one of the largest liquid staking platforms available on Solana. Offering a 7% annual return and allowing stakers to use their JitoSOL tokens for other defi activities, Jito is an attractive prospect for anyone looking to earn a little income from those SOL tokens sitting in their wallet!
Pros
- Liquid staking. No lockup period. Unstake at any time
- 7% annual returns on staking plus the opportunity to earn with your JitoSOL tokens as well
Cons
- Only available for SOL tokens
- Supports liquid staking of SOL tokens
- No lockup period. Unstake your tokens at any time
- Use your JitoSOL tokens for other defi activities
Liquid staking offers a large amount of flexibility compared to lockup staking. And with very competitive interest rates, plus the ability to utilize your liquidity tokens, Jito is a great way to earn some passive income.
Jito is the second largest liquid SOL staking protocol, and has been around since 2021, proving their resilience through a bear market cycle.
Rocket Pool
4.6Rocket Pool is a large liquid staking protocol that’s best known for its community-forward approach. The protocol is entirely community owned and has a large presence on platforms like Reddit. One of Rocket Pool’s standout features is that it allows you to stake as little as 0.01 ETH to start earning rewards or stake just 16 ETH to run your own validator node.
Pros
- One of the most popular liquid staking platforms
- Can be used by individuals and businesses to set up staking pools with custom fees and rules
- When staking, users get the “RPL” token as a reward, which is the governance token of the Rocket Pool DAO
Cons
- While other platforms allow immediate un-staking, Rocket Pool requires lock-ins for between 3 and 12 months for validators
- Fees can be as high as 20% on rewards from certain staking pools
- Run by the community through a decentralized autonomous organization (DAO)
- You can run an Ethereum node by staking just 16 ETH (it normally costs 32 ETH)
- The protocol does not charge a flat commission fee on rewards, instead, you can pick from fees between 5% and 20% depending on how you decide to stake
When it comes to community-owned and managed liquid staking platforms, Rocket Pool is definitely at the top. While many other liquid staking providers are opaque private companies, Rocket Pool is governed by a DAO where users can vote on proposals and decide the future of the protocol together.
Origin Protocol
Origin Protocol is a selection of products built to take advantage of what blockchain has to offer. Their ETH liquid staking program provides users with OETH tokens, and provides auto-compounding yields from across several other defi protocols. They also offer Origin Dollar, a yield-generating stablecoin, and Origin Story, an NFT platform that lets users create their own marketplaces!
Pros
- Optimized earnings between different protocols
- Liquid staking
Cons
- Not as well known as many other protocols
- Liquid staking with OETH tokens
- Optimized earnings between different protocols
- Also offers Origin Dollar, a yield generating stablecoin
- OGV governance token can also be staked for earnings
Origin offers liquid staking for ETH holders while utilizing several other defi protocols to maximize yields for their users. With a small, minimum deposit, Origin Protocol provides liquid ETH staking for all sizes of ETH holders.
With a growing ecosystem including their own stablecoin and an NFT marketplace platform, Origin Protocol is building a blockchain hub that will only continue to grow from here.
What Types of Crypto Staking Are There?
There are several types of crypto staking—with varying degrees of difficulty. Below, we outline the most common staking methods.
Just remember: No matter how you stake, you’ll receive crypto rewards for doing so from the blockchain to which you are staking.
- Use a centralized exchange (very easy): Many major crypto trading platforms also support staking of popular crypto assets. (See “Where to Stake Crypto” above.) These exchanges “custody” your tokens and fulfill the staking process automatically. You can use their services at the push of a button.
- Delegate to a validator (easy): Many proof-of-stake blockchains allow you to delegate your tokens directly to an individual validator. This validator may be a single person or a corporation that runs a validator node. This method allows you to earn staking rewards while keeping your tokens inside your wallet and not giving up custody.
- Use a custodial staking pool (intermediate): Pool your crypto tokens together with others and stake to the blockchain as a single entity. This process allows you to engage in minimal intermediaries while also avoiding the complexities of running your own validator node. This method will require you to hand over custody of your tokens to the pool.
- Use a liquid staking pool (intermediate): Liquid staking pools provide a “liquid” token that can be traded in place of your crypto while it’s staked. This is a popular staking method and offers some of the highest staking yields since you can lend out your liquid token to earn additional rewards.
- Run your own validator (hard): The most complex yet direct way to stake is to run your own validator node. This requires substantial technical know-how. But once you set it up, you can start recruiting stakers (called delegators) who send you tokens to stake on their behalf and collect fees from their staking rewards.
| Centralized Exchange | Delegating To A Validator | Custodial Staking Pool | Liquid Staking Pool | Running A Validator | |
|---|---|---|---|---|---|
| Setup Difficulty | Very Easy | Easy | Intermediate | Intermediate | Hard |
| APY | Medium | Low | Medium | High | High |
| Custody Of Assets | Held by the central exchange | Coins stay in your wallet | Held by the staking pool | Custodied by the staking pool | Coins stay in your wallet |
| Ease Of Tax Reporting | Receive prepared documents showing your transactions and balances | Have to keep your own records or pull the data from the blockchain | Have to keep your own records or pull the data from the blockchain | Have to keep your own records or pull the data from the blockchain | Have to keep your own records or pull the data from the blockchain |
| Pros | Easy to implement | Get to keep custody of your tokens | Stake low amounts | Get a liquid token that can be used in place of your staked crypto | Most direct method, no fees involved |
| Cons | Platform risk as they hold your tokens | Validator fees can really eat into staking APYs | Exposed to potential protocol penalties | Extra taxable event when you swap for the liquid token | Technically challenging |
What To Consider
- How much you’ll earn. Different platforms offer different yield rewards, or APY, even for the same cryptocurrency. Look out for promotions that sweeten the pot with reduced fees.
- The platform’s reputation. It’s important to pick a well-established and secure platform when staking because some platforms, in hindsight, have turned out to be bad eggs. (Looking at you, FTX.)
- Which crypto you can stake. Not all platforms have staking support for all cryptocurrencies, so make sure your platform of choice does everything you need.
Pros
- Beginner-friendly staking process
- Simplified tax reporting, since earnings are tracked and displayed in one place
- Thanks to promotions, earnings can be higher than other staking methods
Cons
- A third party takes custody, and therefore control, of your crypto
- If you’re diehard about decentralization, this runs against that concept because only a few companies control a lot of staked crypto
Step-By-Step Guide
In the below example, we will be staking Ethereum using Uphold.com.
Note: Uphold no longer supports staking for US customers.
Step 1: You will first need to create an Uphold account, which includes going through some identity verification checks. After you’ve created an account, you can navigate to Uphold’s staking page and click “Start Staking.”
Step 2: Uphold will take you to your wallet page. Next, click “Go to Staking.”
Step 3: Once you’ve looked over the instructions, click “Next.”
Step 4: The next page will show you a list of cryptocurrencies that you can stake through Uphold. For this example, we will be