Table of Contents
- Best Crypto Staking Coins to Invest
- KEY TAKEAWAYS
- Factors to consider When choosing staking coins
- Network security and stability
- Potential for price appreciation
- Market capitalisation
- Solo staking vs staking pool
- The best cryptos to stake in 2023 include:
- Ethereum (ETH)
- Cardano(ADA)
- Polkadot(DOT)
- Tether USD (USDT)
- Arbitrum (ARB)
Best Crypto Staking Coins to Invest
Want the best returns when staking your coins and tokens? Give these best staking coins a shot to maximise your passive income.
MORE LIKE THIS: Investing Staking Crypto yields
KEY TAKEAWAYS
- Staking is a passive means of earning money in cryptocurrency.
- You can only stake cryptos that operate on a proof-of-stake mechanism.
- You must consider the network security, stability, potential for price appreciation, liquidity, and annual percentage yield, among other things.
- You must time your entry and exit to maximise profits with proper risk management and portfolio diversification.
Staking in cryptocurrency is one of the best ways to make passive income in crypto without much stress. Staking offers juicy rewards on your crypto coins and tokens. Staking looks pretty much like the traditional bank's system of annual interest. Okay, I know you are wondering what staking means in a full scope.
Catch up on our introductory article on staking here: What is staking?
Staking is only available for cryptocurrencies that operate on proof-of-stake consensus mechanisms. In a proof-of-stake mechanism, the users validate the transaction and earn rewards in return.
Read more about the proof-of-stake mechanism.
Factors to consider When choosing staking coins
Choosing a good asset in an ocean of a gamut of crypto coins and tokens may be a daunting task. Many projects entice crypto users with a sugar-coated promise of high annual percentage yield; in the end, some of these projects “rug pull’’ and exit to the wind with investors' capital. It is important to do extensive, unbiased research on every crypto asset before investing. To help you in your staking journey, we compiled a list of things to look out for.
Read more here: What is staking?
Network security and stability
Security and stability are important parameters for long-term success and value for crypto coins and tokens. Blockchain is a decentralised system that relies on cryptographic protocols for its operations without a physical coordinating location. Security and stability have been a significant challenge in blockchain, with many hacks and thefts occurring almost spontaneously, causing massive investor funds loss.
Always consider audit reports' method, approach, regularity, and quality before buying a crypto asset. Checking previous security breaches and how they were handled and resolved is also a good way to choose a good asset for staking.
Potential for price appreciation
Price is quite volatile in the cryptocurrency market, sometimes moving upwards or downwards quickly. The ease with which price can change is the measure of volatility. To make maximum profits from staking, you must choose assets that will increase in price geometrically over time.
Significant price drops may wipe out your profits from earned rewards. For example, if you made an APY of 20% from a crypto coin with an initial price of $500 per unit. Your profit will be 0.2 units of that coin. If the current price is $410, you earned $82. If you add this to your initial investment of one unit, that's $492. You incurred a minimal loss of $8. The good news is that your profit mitigated the price drop, and you almost broke even. Suppose you continue to hold and stake the asset for extended periods; you will make huge profits even with minimal price appreciation.
Market capitalisation
Market capitalisation is the total value of a crypto asset owned by users at a given time. High cap assets are generally less volatile than low caps. Volatility is the rate at which market price changes.For example, in a typical bull run, a low cap asset may move 200 percent in 24 hours when high caps like Ethereum (ETH) and Bitcoin (BTC) may merely record a two-figure growth in the same period of time. Conversely, in a typical bear market, low caps assets can lose their value quickly while high caps experience smaller price drops. High volatility in a green market will increase your profits on staked assets.
Solo staking vs staking pool
Solo staking generally accrues higher staking rewards than staking pools because of the charges you must pay the pool operators. However, a staking pool helps you overcome the exorbitant minimum staking deposits for some cryptocurrencies.
To maximise your profit, time your entries and exits well ahead. The best time to enter the market is usually in the bear season, when prices are generally low. Diversifying your portfolio is also a great way to maximise profit and reduce risk exposure.
Read more: How to find the best crypto yields
The best cryptos to stake in 2023 include:
- Ethereum(ETH)
- Cardano(ADA)
- Polkadot (DOT)
- Tezos(XTZ)
- Tether USD(USDT)
- Solana(SOL)
- Arbitrum(ARB)
- Avalanche (AVAX)
- Near protocol
- Binance Coin(BNB)
- Algorand (ALGO)
| Cryptocurrency | Estimated APY* | Minimum Deposit | **Staked ratio |
| Ethereum | 6.00% | 32 ETH | 15% |
| Cardano | 5% | 2 ADA | 61.43% |
| Polkadot | 14.91% | 350 DOT | 42.31% |
| Polygon | 8.61% | More than the balance of the 100th validator | 38.88% |
| Solana | 7.58% | 0.01 SOL | 72% |
| Avalanche | 9.51% | 2000 AVAX | 59.37% |
| Binance smart chain | 8% | 1 BNB | 14.71% |
| Algorand | 8.09% | 1 ALGO | 36% |
| Tezos | 5.89% | 6,000 XTZ | 69.70% |
| Cosmos | 25.17% | More than the balance of the 175th validator | 67% |
| Near protocol | 9.89% | More than the current seat price | 46.50% |
*Estimated APY for validators only, not adjusted for delegated pools, inflation, and deflation rates. These rates change frequently. APY differs depending on the platform.
** Staked ratio is the ratio of staked assets to the total circulating supply.
You may want to jump at some crypto coins and tokens based on the APY, minimum deposit and staked ratio. However, you need to understand some intricacies of these assets. We will examine few of them.
Let’s go!
Ethereum (ETH)
Ethereum is the second largest cryptocurrencies in market capitalisation, merely trailing behind its boss, “BITCOIN”. It is the most popular and the best crypto to stake. Data from coinmarketcap.com shows a market capitalisation of $214,593,719,403. Now that's huge! Indeed, Ethereum is the Bitcoin killer. Ethereum migrated from the rusty proof-of-work to a proof-of-stake mechanism on September 15th, 2022, boosting energy efficiency by about 99.95%. Investors are pumping more cash into Ethereum because of the perceived hostility and fear of continual crackdowns on proof-of-stake coins. According to defilama, Ethereum currently makes up 57.41% of Total Value Locked(TVL) across all chains.
Ethereum offers users a variety of staking options, each with its pros and cons. Staking options include
- Solo (Individual) staking
- Delegated staking
- Pooled staking
- Centralised staking
Read more: Polygon and Ethereum cross-chain deposits are now live!
Cardano(ADA)
Cardano is a big name when it comes to staking. ADA is the native token of cardano blockchain. This third-generation proof-of-stake blockchain was launched in 2017 and is currently the 7th largest cryptocurrency in market capitalisation. Over the years, ADA’s variety of utilities and astronomical price growth (over 1700%) has made it a soft spot for investors.
About two-thirds of the total supply of ADA is currently staked. Staking enthusiasm even surpasses the big players like Ethereum.
Cardano offers 4-6% APY, depending on the staking platform. You can use stake via a validator pool or an exchange. Another juicy offer of Cardano is that there is no lockup period; hence you can retrieve your ADA at will for other transactions.
Polkadot(DOT)
Polkadot is a proof-of-stake blockchain launched in May 2020 after almost five years of research and development. Polkadot stands out like a sore thumb for its innovative multichain bridging system allowing users to interact with blockchains and non-blockchain databases. DOT serves as both the governance token and the staking token. So, DOT will always continue to steal the show.
DOT is available all over the map of cryptocurrency exchanges—popular exchanges to buy DOT include Binance, Kraken and Coinbase. Staking rewards are attractive, with an average APY of 14.91%; you can make passive money while you sleep. Your money works for you.
The minimum amount for staking is 250 DOT. Popular platforms for staking DOT are Binance, Kraken, Daedalus, Exodus wallet, Yoroi wallet, and Kucoin.
Tether USD (USDT)
Tether USD(USDT) is a stablecoin backed up by underlying real USD in a ratio of 1:1. Launched in 2014, tether value almost always remains constant. If you want to mitigate against price volatility, then USDT is your best bet! With USDT, you can earn up to 10% APY. USDT is particularly a top choice for beginners in the staking game. Rewards are usually in USDT; hence your profit can accumulate very fast. Staking offers are available on popular platforms like Binance, Kraken and Kucoin.
Check out other platforms for crypto staking and staking-as-service-platforms.
Arbitrum (ARB)
Arbitrum is a Layer 2 optimistic rollup Ethereum-based token launched in 2021. The presale round of its newly launched ARB governance token amassed over $123M in sales in March 2023. Arbitrum has been in the news for about a month on end, with 1.162 billion ARB tokens airdropped to users. The investor enthusiasm will only get better as lower ETH gas fees are needed transactions. As of May 1st, 2023, arbitrum.io reported a $ 1.29 billion saved ETH gas fee.
In every aspect, Arbitrum is worth the hype. According to arbitrum.io, the total value locked of ARB accrues to $ 6.15 billion. APY is as high as 10% with a variety of earning rewards options, including stablecoins.
Bottom line
Maximising income from staking depends on several factors. Always invest only in cryptocurrencies and platforms that offer good APY, minimum stake amounts, lockup period, scalability, and network security. Do your research(dyor) and build a fortune with crypto staking
References
