Crypto Staking Platforms July 2024

A guide to staking crypto to earn rewards and passive income, including where and how to do it.
Published: November 1, 2023   |   Last Updated: February 29, 2024
Written By:
Eric Huffman
Eric Huffman
Staff Writer
Edited By:
Shannon Ullman
Shannon Ullman
Managing Editor

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.

EthereumSolanaCardano
Protocol Staking APY6.16%7.79%5.24%
Inflation Rate0.52%6.63%1.90%
Adjusted Yearly Staking Reward5.64%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

TokenStaking RewardMethods of Staking AvailableEpoch TimesStaking Lockup PeriodInflation RatePopular Wallet w/Staking Functionality
Ethereum6.16%Centralized exchange, Custodial & liquid staking pools, Running your own validator~6.4 minutesIndefinite (pending upcoming upgrade)0.52%MetaMask
Maticup to 20%Exchange, delegating, liquid staking, running a validator~3 hoursVaries by platform~5%MetaMask (as a delegator or validator)
Binance Coinvaries by platform and lockup lengthLockup on an exchange, liquid staking via third partydaily calculations; monthly payoutsvaries; generally in 30 day increments (i.e. 30, 60, 90, 120 days)~2.35%Trust Wallet
Solana7.79%Centralized exchange, Delegating to validators, Custodial & liquid staking pools, Running your own validator~2 days and 6 hoursNo lockup6.63%Phantom
Cardano5.24%Centralized exchange, Custodial & liquid staking pools, Running your own validator5 daysNo lockup1.90%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

PlatformStandout FeatureAPY RangeMinimum Staking AmountLock-in PeriodSecurity FeaturesPayout Frequency
CoinbaseNewbie-friendly platform with support for ETH, SOL, ADA, and more2% to 6.12%, depending on the assetETH: $0 SOL: $1 ADA: $1NoneIndustry-leading encryption and multifaceted risk managementDaily to quarterly, depending on the asset
NexoETH Smart Staking with daily payouts4% to 12%$10None (swap NETH for ETH)1% to 21%, depending on the assetDaily
KrakenNo waiting period; start earning right awayNo waiting period; start earning right awayNoneNoneISO/IEC 27001:2013 certification, Cold storage walletsOnce or twice a week, depending on the asset
Crypto.comBoost staking rewards with CRO, Crypto.com’s native tokenVaries by asset and lock-in durationETH: 0.02 SOL: 0.1 ADA: 25Flexible holding term1-month fixed term3-month fixed term100% of user funds are held in cold storage walletsWeekly
Stader LabsEasy staking and unstaking; integrated defi3.5% to 15% depending on the assetNoneNone (liquid staking)Third party audits; on-chain monitoring; hefty bug bountiesLiquid tokens accrue value until cash-out
LidoUser friendly; liquid staking; connect with popular crypto walletsUp to 20% depending on assetNoneNone (though withdrawals may take a few days)Third party auditsDaily
OriginOrigin Dollar – a yield generating stablecoin; OETH, yield generating ETH token5.75%NoneNoneThird party audits; hefty bug bounties; guaranteed 48 hour withdrawal period before any new code implementationsConstant; auto-compounding
JitoLiquid staking for SOL token;~7%NoneNoneJitoSOL token gains value over time
RocketpoolLiquid staking on any amount; no lockup periods; validator poolsVaries – currently 2.89%0.01 ETHNoneSmart contracts audited and open-sourceUsers give rETH tokens which gain value over time

Coinbase

Best For Beginners
On Coinbase’s site
Review
4.6
Tokens Available
ETH, SOL, ADA, XTZ + more
Rewards
2% to 6.12%
Liquid Staking
Yes. lsETH
Supported Blockchains
Ethereum, Cardano, Solana + More
Min. Staking Amount
$0 – $1
Lock In Period
None
Payout Frequency
Daily to Quarterly
Availability
Worldwide

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

Best For Daily Payments
On Nexo’s site
Review
4.1
Tokens Available
ETH
Rewards
4% to 12%
Liquid Staking
Yes. NETH
Supported Blockchains
Ethereum
Fees
0.03% – 0.20%
Min. Staking Amount
$10
Lock In Period
None
Payout Frequency
Daily
Availability
Europe

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

On Kraken’s site
Review
4.4
Tokens Available
BTC, ETH, USDT+More
Rewards
1% to 21%
Supported Blockchains
ETH, SOL, ADA +More
Fees
1% to 21%
Min. Staking Amount
None
Lock In Period
None
Payout Frequency
1-2X a week
Availability
Worldwide

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

Best For Security
On Crypto.com’s site
Tokens Available
ETH, SOL
Rewards
0.2% – 3%
Supported Blockchains
Ethereum, Solana
Fees
0.04%–0.4%
Min. Staking Amount
0.02 ETH, 0.1 SOL, 25 ADA
Lock In Period
1-3 months
Payout Frequency
Weekly
Availability
Worldwide

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

On Marinade’s site
Review
4.6
Tokens Available
SOL
Rewards
6% of all staking rewards
Liquid Staking
Yes. mSOL
Supported Blockchains
Solana
Fees
6% of all staking rewards
Availability
Worldwide, USA

Stader

Best For Multi-Asset Staking
On Stader’s site
Review
4.3
Tokens Available
ETH, MATIC, HBAR, BNB, NEAR, FTM, LUNA
Rewards
3.5% to 15+%
Liquid Staking
Yes
Supported Blockchains
Ethereum, Polygon, BNB, Fantom, Terra, & More
Fees
10%
Min. Staking Amount
None
Payout Frequency
Varies by asset
Availability
Worldwide

Pros

  • 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

Best for Beginners
On Lido’s site
Review
4.8
Tokens Available
SOL, ETH, MATIC
Rewards
4.4% – 6.7% APY
Liquid Staking
Yes. stETH, stMATIC, stSOL
Supported Blockchains
Ethereum, Polygon, Solana
Fees
10%
Min. Staking Amount
None
Lock In Period
One year
Payout Frequency
Daily

Lido 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

Best for Liquid SOL staking
On Jito’s site
Tokens Available
SOL
Rewards
~7%
Liquid Staking
Yes. JitoSOL
Supported Blockchains
Solana
Fees
4%
Min. Staking Amount
None
Lock In Period
none
Payout Frequency
Ongoing
Availability
Worldwide

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

Best for Communities
On Rocket Pool’s site
Review
4.6
Tokens Available
ETH
Rewards
3.93%
Liquid Staking
Yes. rETH
Supported Blockchains
Ethereum
Fees
5% – 20%
Availability
Worldwide

Rocket 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

Best for Yields
On Origin Protocol’s site
Tokens Available
ETH
Rewards
5.75% apy
Liquid Staking
Yes. OETH
Supported Blockchains
Ethereum
Fees
??
Min. Staking Amount
None
Lock In Period
None
Payout Frequency
Ongoing
Availability
Worldwide

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 ExchangeDelegating To A ValidatorCustodial Staking PoolLiquid Staking PoolRunning A Validator
Setup DifficultyVery EasyEasyIntermediateIntermediateHard
APYMediumLowMediumHighHigh
Custody Of AssetsHeld by the central exchangeCoins stay in your walletHeld by the staking poolCustodied by the staking poolCoins stay in your wallet
Ease Of Tax ReportingReceive prepared documents showing your transactions and balancesHave to keep your own records or pull the data from the blockchainHave to keep your own records or pull the data from the blockchainHave to keep your own records or pull the data from the blockchainHave to keep your own records or pull the data from the blockchain
ProsEasy to implementGet to keep custody of your tokensStake low amountsGet a liquid token that can be used in place of your staked cryptoMost direct method, no fees involved
ConsPlatform risk as they hold your tokensValidator fees can really eat into staking APYsExposed to potential protocol penaltiesExtra taxable event when you swap for the liquid tokenTechnically 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.”

how to stake with Uphold

Step 2: Uphold will take you to your wallet page. Next, click “Go to Staking.”

How to stake with Uphold

Step 3: Once you’ve looked over the instructions, click “Next.”

How to stake with Uphold

Step 4: The next page will show you a list of cryptocurrencies that you can stake through Uphold. For this example, we will be staking ETH.

How to stake with Uphold

Step 5 (ETH-specific): As of November, 2022, when staking Ethereum, you will not be able to withdraw your ETH until the Ethereum blockchain undergoes a planned upgrade. Acknowledge this notice to proceed.

How to stake with Uphold

Step 6: Click “Start staking ETH.”

How to stake with Uphold

Step 7: Here is where you enter the amount that you would like to stake. When you’re done, click “Preview staking.”

How to stake with Uphold

Step 8: Review the final details, including your staked amount and the terms of your rewards. When you’re ready to finalize, click “Confirm Staking” to stake your ETH.

How to stake with Uphold

What To Consider

    • The validator’s reputation: Validators range from individuals managing small sums to companies staking millions of dollars of tokens. It’s critical to do your research on the validator you have selected to make sure they are reliable. You can research validator stats to help you compare.

    • The validator’s fees: Most validators take a cut before passing staking rewards on to you. Validators justify this fee because they’re providing you a service—running the validator itself (hard) and staking on your behalf. How much? Compare.

Pros & Cons

Pros

  • Your tokens stay in a wallet that you control
  • You can evaluate many validators before choosing one you trust
  • You help to decentralize the network

Cons

  • It’s not as easy as staking through to a centralized exchange
  • You have to keep track of your earnings for tax-reporting purposes
  • Possibly lower APYs than many centralized platforms

Step-By-Step-Guide

The below example shows how to delegate SOL to a Solana validator through the popular wallet Phantom.

Step 1: Use the Phantom website to install the wallet and fund it with some initial SOL.

How to stake with Phantom

Step 2: After you’ve created and funded your wallet, click on your Solana balance in the wallet interface.

How to stake with Phantom

Step 3: The next step will prompt you to stake your Solana. Click the “Start earning SOL” gold star.

How to stake with Phantom

Step 4: You will then see all of the available validators that you can delegate your Solana to, along with their fee rates. Find a validator that you would like to delegate your funds to and click on their name.

How to stake with Phantom

Step 5: Enter the amount of SOL you would like to delegate and click the “Stake” button.

How to stake with Phantom

Step 6: Your Solana is now staked directly with your validator of choice.

How to stake with Phantom

 

A staking pool is a group of token holders coming together to pool their tokens and stake directly to the blockchain. The pool must set up a validator, and the main organizers of the pool do the heavy lifting. This allows token holders to maximize staking rewards without needing to run a validator node themselves. Staking pools often charge a fee for facilitating the technical aspect of staking. This fee is taken out of staking rewards paid each epoch.

What To Consider

    • The staking pool’s reputation: If the staking pool does not uphold its responsibilities as a node validator, you may be in danger of losing some or all of your funds due to protocol penalties (slashing).

    • Whether the staking pool has a minimum: Some staking pools have a minimum staked amount that must be met in order to stake your tokens with them. Depending on the token balance you are looking to stake, these minimums may be a factor in your decision.

    • How much the pool fees run. Like delegated staking or liquid pools (covered next), staking pools charge a fee that might make them a great deal–or not so great.

Pros

  • Get as close to running your own validator as possible without having to own equipment and doing the setup/maintenance work
  • Possibly stake low amounts that may not be supported by other staking methods due to minimums

Cons

  • Exposes you to penalties if the validator misbehaves or goes offline
  • Is a less popular method of staking, so you may need to do extra research to find a good platform for it
  • You’ll have to pay a fee, which is taken out of your staking rewards

Step-By-Step-Guide

(It’s so similar to “delegating to a validator” that it’s helpful to read that step-by-step guide.)

 

Liquid staking pools are similar to regular staking pools in that you collectively put your tokens together, validate, and earn money. However, liquid pools provide a “liquid token” that represents the type of crypto you have staked.

You can think of a liquid token kind of like a stunt double—it looks and acts like your staked crypto token, but it isn’t. Liquid staking allows you to earn rewards on your staked crypto without locking up your crypto. You can have your cake and eat it, too.

This liquid token normally tracks the value of the underlying crypto. For example, a common liquid token for Ethereum, stETH, closely follows the price of ETH but includes a staking yield through a method called rebasing. When you stake ETH to the liquid staking provider Lido, you receive stETH back that can be traded on the open market and used like any other cryptocurrency. Boom!

Note: If you want to liquid-stake ETH, you can just swap ETH or another token for stETH on a decentralized exchange like Uniswap. With a few clicks, you’re staking ETH like a liquid-staking pro and earning stETH rewards. You might even save a few bucks by doing it the easy way.

What To Consider

    • The value of the platform’s liquid tokens: Liquid staking tokens are platform-specific, meaning each liquid staking pool generates its own liquid tokens for cryptos like ETH and SOL. It’s important that these liquid tokens have large enough market value and enough liquidity to trade easily. Staking with smaller liquid staking pools may leave you holding tokens that are hard to trade.

    • The platform’s fees: Since liquid staking pools are providing a service, they naturally also charge fees. For example, Lido charges a 10% fee, which is deducted from your staking rewards. Translation: you’ll get 10% less in rewards (but you can stake small amounts and sell anytime).

    • The platform’s risk: Because each liquid staking platform has its own liquid tokens, and their value is tied to the platforms’ viability, these tokens rise and fall with their platform. In other words: If the platform goes boom, so does the platform’s liquid token. And your investment. (Oops.)

Pros

  • Get a tradable token while your actual crypto is locked up
  • Easier than some other methods because you don’t have to do as much research
  • Boost your returns by lending out your liquid token or providing liquidity on a decentralized exchange
  • Stake small amounts

Cons

  • Liquid staking usually represents a taxable event (it does in the U.S.) because you are swapping one asset for another
  • Expose yourself to platform risk by holding a platform-specific crypto
  • Liquid tokens are generally not as well supported across exchanges as large cryptos

Step-By-Step Guide

Below is an example of how to stake Ethereum using the popular liquid staking pool platform Lido.

Step 1: Navigate to the Lido’s ETH Staking page and click “Stake Ethereum.”

How to use liquid staking with Lido

Step 2: Use the “Connect wallet” button to connect your wallet.

How to use liquid staking with Lido

Step 3: Enter the amount of ETH that you would like to stake and click “Submit.”

How to use liquid staking with Lido

Step 4: Use the blue “Confirm” button to confirm the transaction. Do this through your wallet interface.

How to use liquid staking with Lido

Step 5: You will receive a confirmation through the Lido website, and your stETH (Lido’s liquid ETH token) will now be available inside your wallet.

How to use liquid staking with Lido

All tokens that are staked — regardless of the method — eventually end up staked directly to the blockchain. This means that, if you really wanted to, you could skip the staking platforms and manage the staking process yourself by running your own validator.

Running a validator definitely takes some tech know-how. The process is complex and requires upfront investment in an advanced computer to run the process. You’ll also need a solid understanding of the roles and responsibilities of validators—those responsible for validating and sometimes building each subsequent block in the blockchain.

If you’re ready for the challenge, running your own validator provides you with staking rewards without platform fees. An added perk is that you can provide staking services to other token holders who may want to delegate their tokens to you. Score!

What To Consider

    • The expensive upfront cost: You’ll need a computer capable of running the staking software. Expect to invest two thousand dollars or more for a machine, although hardware requirements vary by network.

    • Whether or not your internet connection is good enough: You’ll need a fast and uninterrupted internet connection. When the network comes calling, you need to be ready to answer the call. Missed blocks can result in lost earnings or slashing penalties. Most protocols require a high-speed business-class internet connection.

    • Whether or not you have the knowledge or are willing to learn: The process is complicated. You either have to know what you’re doing or be committed to learning how to set up and run your validator node

    • If you have enough crypto to get started. In order to run an ETH validator node, you will need to put up 32 ETH (or about $53,000 as of February 2023). By comparison, AVAX requires 2,000 AVAX, or about $41,000. SOL, on the other hand, does not set a minimum stake amount. But you’ll likely need 5,000 (about $133,000) or more SOL to attract stakers, and breakeven could be as high as 50,000 SOL staked to your validator.

Pros

  • You’ll get all of your earnings as there is no platform to take a cut.
  • On many networks, like Solana and Cardano, you can recruit people and earn money by charging a fee from the rewards on their delegated tokens

Cons

  • Relatively complicated (and expensive!) to set up, depending on the token you stake.
  • You must follow the protocol rules and carry out your responsibilities as a validator. Otherwise, you risk losing your staked funds to slashing
  • Often not worth it unless you have a lot of token holders delegating to you

Step-By-Step-Guide

Step 1: Get the minimum amount of tokens you’ll need: For blockchains like Ethereum and Avalanche, running your own validator requires a minimum number of tokens.

Step 2: Get the computer and software you’ll need: You can’t be a validator without the proper gear. You’ll need a specialized computer, specific software, and a solid internet connection, as the computer will be running 24/7.

Step 3: Generate and store your security keys: A validator key works like an ID on the network, certifying your validator to participate in consensus and earn rewards. Follow the instructions for your chosen network.

Step 4: Follow protocol. Be sure you understand the responsibilities of a validator. Largely, these focus on following the consensus rules for each blockchain and making sure your node is always online. Crypto never sleeps, and it’s your crypto at stake.

The instructions and requirements for setting up a validator vary by blockchain. Here are the guides for some of the big ones:

What’s The Difference Between Staking And Lending?

When lending crypto, you make money (interest) off the money you lend to the borrower. As you might imagine, lending comes with risks, like a borrower defaulting on the loan.

When staking crypto, you allocate your crypto tokens to a computer (validator) on the blockchain. Usually, the more tokens a validator has staked, the better chance they have to build a new block, for which they earn rewards.

Basically, a validator needs your cash to attract earnings and then pays the majority of those earnings back to stakers (like you) after taking their cut.

Crypto LendingCrypto Staking
RewardsRewards are really just interest paid by borrowers.Rewards come from newly issued tokens and network transaction fees.
Leveraged ReturnsNope. You lent your tokens and now someone else has them (so you can’t use them).Liquid staking lets you use your tokens in DeFi apps to earn more yield while still earning rewards.
Minimums To Get StartedUsually lowOften low, but can be high with some methods.
RisksThe platform could run into money troubles, preventing withdrawals.If the validator you choose misbehaves or goes offline, you could lose some of your crypto or miss out on earnings.

What Is DeFi Staking?

DeFi staking refers to staking tokens on a decentralized application (dApp) to earn rewards. This differs from staking to help validate transactions on the network.

Instead, you commit tokens to a specific platform or dApp to earn a yield. These yields are sometimes paid from platform earnings (real yield) and, in other cases, paid through token inflation — or sometimes both.

The good news: DeFi staking is usually pretty easy, and it’s where you’ll usually find the highest APY crypto staking. The bad news: Well, there are some sketchy protocols out there, so you’ll want to do your research first. If it seems too good to be true…

Here are some popular examples of DeFi crypto staking platforms.

    • Aave: Best known as a lending and borrowing platform, Aave also has a staking feature where you can stake AAVE tokens to earn a yield. In this case, your tokens act as insurance against sudden losses on the platform — so, yes, there’s a risk. But there’s also a reward. You’ll earn a yield for helping to backstop the Aave protocol.

    • LooksRare: Users can stake LOOKS tokens on LooksRare, a popular NFT marketplace, to earn a share of platform revenue. It’s like owning part of the protocol without the business management overhead.

    • GMX: The GMX decentralized exchange, popular amongst leverage traders on the Arbitrum and Avalanche networks, offers two methods of DeFi staking. You can buy GLP, which provides liquidity for the platform. GLP earns 70% of the platform revenue because GLP holders bear the risk of losses when traders beat the house. You can also stake GMX, the official token. GMX stakers earn 30% of the platform revenue.
    • Stader Labs – Stader Labs offers one of the largest selection of staking options, with support for a half dozen different blockchains. Their user friendly interface and easy integration with popular wallets make this an excellent choice for those wishing to stake multiple assets.
    • Lido – Lido provides staking services across several different blockchains – Ethereum, Polygon, and Solana. As one of the largest liquid staking platforms around, their liquid staking tokens are often accepted on other platforms.
    • Origin – Origin Protocol is a rapidly growing blockchain platform that offers defi services including ETH staking. By spreading their investments across several other staking platforms, Origin is able to offer the best interest rates that are currently available.
    • Jito – Jito is one of the largest platforms for liquid SOL staking. Users can passively earn by staking their SOL tokens, and also use their JitoSOL tokens in other defi activities.
    • Rocket Pool – Rocket Pool offers defi staking for ETH holders, letting them earn some of the fees associated with transactions on the blockchain. In addition, those with enough ETH can run their own Node through Rocket Pool.

DeFi often offers the highest staking rewards, but study the platforms you’re considering carefully before buying or staking tokens.

Some protocols are best described as well-dressed token factories with no real earnings. This brings a risk that the yield paid through token inflation could become worthless over time. Ouch.

If you want to earn a yield without needing to monitor the platform 24/7, it makes sense to do your crypto research to find the best staking platform and the best crypto to stake.

To Sum It Up

Staking offers passive income–or not so passive if you’re running a validator. But for most of us, it’s easy money with minimal effort and reasonable safety.

Staking rewards also help offset token inflation common to many proof-of-stake blockchains.

You have to choose your staking provider carefully, though. Validator downtime and other missteps can cost you money, so it’s important to do your research before you start clicking buttons.

Frequently Asked Questions

Yes, but there’s really only one way that can happen: through “slashing.” That’s when the validator to which you have delegated your staked crypto—or maybe your validator if you set up your own—engages in activity, often malicious, that doesn’t follow the protocol and ultimately undermines the security of the blockchain. This may result in the loss of your staked funds. Other than slashing, the only other way to lose your staked crypto is if the platform you’re working with gets hacked or goes belly up.

We’re not here to recommend a specific crypto to stake because everyone’s goals are different. So, consider the big picture. A healthy yield is a consideration, but it’s only part of the equation—what if the coin or token price is making a beeline toward zero? In general, look for well-established cryptocurrencies with a strong network and a history of consistent yields.

Or put another way: which cryptocurrencies can you stake? Currently, nearly 300 cryptocurrencies use proof-of-stake.

Some popular staking choices include:

  • Ethereum
  • Solana
  • Cardano
  • Avalanche
  • Polkadot
  • Polygon
  • Binance Chain

Read “Which Crypto Can You Stake?” for more.

There are three factors that affect your potential earnings from staking crypto.

  • First, the annual percentage yield for your chosen crypto type.
  • Second, the yield for your chosen platform or pool (after fees).
  • And third, the supply and demand relationship presents in that moment: if the network needs more crypto for validations, yields climb. If it doesn’t, yields fall.

You can expect many popular staked cryptocurrencies to pay between 3% and 10% APY. And remember, much like savings account interest at a bank, staking rewards compound automatically in most cases.

Simple: Stake some crypto—then stick it out for a while. Earn rewards at the end of each epoch and let compound interest boost that amount naturally. Some blockchains, like Cardano, might require moving your stake occasionally, but generally, staking doesn’t require additional attention.

Yes. It’s important to educate yourself about tax on cryptocurrency in the US. Staking rewards are taxed as income by the federal government and very likely by your state, too.

Income tax is calculated according to the fair market value of your crypto at the time of receipt. So if you receive 0.1 ETH in staking rewards on a day when Ethereum is trading at $2,000, in the eyes of the IRS, you have received $200 in income, and you will be taxed on that amount regardless of future ETH price fluctuations.

Crypto appreciation is also a taxable event. If your 0.1 ETH in staking rewards appreciates from $200 to $250 and you sell it, you are liable for paying a capital gains tax on the $50 of appreciation.

Check out our tax page for information, or talk to your accountant for the most up-to-date information about crypto taxes.

Staking crypto can mean two things, with the most common being using your crypto to help validate transactions on a proof-of-stake crypto network.

For example, Ethereum uses proof of stake to ensure all transactions are valid. People who stake Ethereum (ETH) earn a yield (paid in ETH) for helping to secure the network. The easiest way to start staking Ethereum is to use an exchange like Coinbase that supports ETH staking. We cover other types of crypto staking in the article above.

Crypto staking is also built into some decentralized apps. For instance, on GMX, a popular trading app, you can stake GMX tokens to earn a percentage of the fees paid on the platform.

Staking crypto makes the most sense when you’re planning to hold the crypto anyway. Here’s the primary reason: Often, crypto staking comes with lock-up requirements or cool-down periods, which means you might not be able to exit your position quickly.

But if you’re in for the long haul, staking crypto can be a relatively safe way earn passive income on crypto assets you were planning to hold anyway.

Staking crypto on proof-of-stake networks like Ethereum, Solana, Cardano, or Polkadot can give you yields of 3% and higher. It’s like being paid to wait. But be sure to read the article above to understand the pros and cons first.

Eric Huffman
Eric Huffman
Staff Writer
Eric Huffman is a staff writer for MilkRoad.com. In addition to crypto and blockchain topics, Eric also writes extensively on insurance and personal finance matters that affect everyday households.
Shannon Ullman
Shannon Ullman
Managing Editor
Managing editor working to make crypto easier to understand. Pairing editorial integrity with crypto curiosity for content that makes readers feel like they finally “get it.”

Skip Ahead

    Ethereum Price

    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…

    SEE MORE