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Staking Wallets: Your 2022 Guide to Staking Crypto

Altcoin Trading Blog
01/17/22 · Non directional

About This Blog Post

  1. Filed as Full Guide
  2. Uses exodus ( + more posts) 
  3. Uses ledger ( + more posts) 
  4. Uses trezor ( + more posts) 
  5. Uses bitfinex ( + more posts) 
  6. On the same topic: Staking Wallets: Your 2022 Guide to Staking Crypto
What is the best place to stake crypto? What are the best crypto staking wallets? How does staking on exchanges work?
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In this article we cover:

What is staking crypto?

Crypto staking is a way to earn income by holding a certain kind of cryptocurrencies in your own crypto wallet.

Only cryptocurrencies running on an algorithm called PoS, or proof-of-stake, are can yield staking income. On POS blockchains, staking is the mechanism that secures the ledger and verifies new transactions.

Is staking risk free?

Staking income is not completely risk-free, but typically the risk is low.

As long as you use a staking wallet like Ledger or Exodus instead of staking from an exchange, you still fully your coins. Staked coins never leave your wallet, they only get delegated.

If you decide to stake via a custodial exchange like Binance, you need to deposit your alt coins to that exchange. This exposes you to the risk of losing them through a security breach, either in your account or in the exchange as a whole.

Some of the security and financial risks you can run into when staking crypto:

  1. Bad validator: You stake a coin via delegating to a validator, and the validator decides to not pay you.
  2. Account or wallet breach: Your staking wallet or exchange account gets hacked.
  3. Volatility: A fundamental event changes the valuation of your PoS crypto and you will not be able to sell it, due to having coins locked up in staking.

What are the best crypto staking coins?

Best crypto staking coins are those that offer high yield that is paid out directly from the network. If you need to stake via a validator, validators payouts should be enforced with an automated process. That way you don’t depend on the good will of the validators, while you don’t need to run a full node yourself.

Best paying staking coins in 2021:

  • ETH2
  • ADA
  • DOT
  • NEO (Earning GAS that can be claimed any time)
  • Tezos (Initial lock 35 days, after that rewards can be claimed every 3 days)
  • Cosmos (ATOM) (Rewards can be claimed any time)

Staking crypto from your wallet

Desktop wallet apps that offer staking have the best ratio of how easy it is, the yield it gives and the risks it exposes you to.

Technically, it is not demanding to start staking. But it is still some effort, and so the yields are always higher than margin lending. The staking rates will typically end up better than in staking through exchanges, because those may charge fees, but this is not a set rule.

And - your risks are minimal here. You only delegate the alt coin from your own wallet, you still own it the whole time.

Best Wallets for Staking

The most popular staking wallet is the Binance-owned Trust Wallet. But is it the best one?

Well. In terms of security it is ok-ish, but not the best. In terms of user interface neither. You will always get better security and better UI from independent products, not from products designed to minimize costs and increase margins. Just make sure you choose products that have been well time-tested.

Here’s the top of the market among crypto wallets that offer staking in 2022:



Staking on Exodus Wallet

Exodus wallet staking

Staking currencies supported by Exodus:

  • Algorand ALGO
  • Cosmos ATOM
  • Cardano ADA
  • Ontology ONT
  • Solana SOL
  • Tezos XTZ
  • VeChain VEC / VeThor VTHO

Exodus is the most popular free crypto wallet app. Exodus is available for Android, iPhone and as a desktop app, and Exodus wallet staking is available from all of them.

Exodus wallets focus on user-friendly interface and making high-tech functions accessible to non-techies.

For instance, this is all you need to click to stake ALGO from your Exodus mobile app:

exodus wallet staking mobile

Is Exodus trustworthy?

Oh yes. Exodus has been around for a long time. They earn fees from the instant exchange that comes with Exodus wallets and that keeps them independent from industry behemoths.

They are known as industry pioneers and integrate new features very quickly. Currently there are 130+ cryptoassets supported in a single wallet app and Exodus continually adds new DeFi coins.

You cannot do anything too complex with Exodus. But it is a great choice for you if you are a smaller holder and you just want to stake with good rates, good security and minimum hassle.

How to start staking on Exodus

How to start staking on Exodus

  1. Install the Exodus wallet for desktop from exodus.com.
  2. Install the Exodus “Rewards” staking app from inside of the Exodus app.
  3. Rewards app lists out all the current yield rates, as well as details on whether you need to claim or delegate and how long you need to lock up your coins to stake.
  4. If you need to use your Exodus for anything more complex, the wallet integrates with Trezor hardware wallets.

Here is a full walkthrough of how to start staking with Exodus wallet:


OPSEC Note: Always make sure your computer is clean and malware-free.

Staking on Ledger Wallet

Crypto staking is enabled for any Ledger wallet model via the Ledger Live application.

Alt coins you can stake directly from Ledger Live:

  • Ethereum ETH2
  • Polkadot DOT
  • Tezos XTZ
  • Cosmos ATOM
  • Algorand ALGO
  • Tron TRX

Most other POS cryptocurrencies can be staked through a third party wallet. Typically, that will be a single-coin wallet specific to that alt coin, and you will be able to authenticate in it via your Ledger wallet.

Then it’s just delegating your coin to a decentralized staking pool, which is basically two clicks. For illustration, here’s how to stake Terra from Ledger via AllNodes:

how to stake Terra from Ledger via AllNodes

Is Ledger a good wallet for staking?

In Ledger wallets, we have seen the interface sacrifice advance functionalities like signing a message with a BTC address to allow for pretty account overviews and trendy features.

Still, Ledger is a good choice of wallet for staking for both small and large holders.

Here’s why. The security is better than in a desktop or mobile wallet. Ledger is not as super top tier as Coldcard but it runs on a secure element chip and it is isolated from your computer.

Ledger implements new coins quickly and staking pool networks will always provide simple integration for staking from Ledger, just because Ledger is so damn popular.

There is also a way to purchase new coins directly without needing to go to an exchange.

Ledger Live also now comes with a crypto exchange on board. If you don’t yet have the crypto you want to stake, you can buy it there.

How to start staking on Ledger

There are different ways to generate revenue directly in Ledger by staking.

  1. Fully passive: Komodo, NEO Holders can claim reward for just keeping their Komodo and NEO coins in their wallets.
  2. Delegate: DOT, Tezos, Tron Holders need to delegate some of all coins they own to a validator who will do the staking and secure the network. Validators pay out the revenues to holders who delegated coins.
  3. Any other PoS coin Holders can become validators (this requires running a node), or delegate coins to a third-party staking pool.

In the simplest case (like with NEO) you just need to install your coin’s wallet on your Ledger device and move the crypto there.

Get Ledger Nano X

Staking on Trezor wallet

Trezor One wallets do not support direct staking from the user interface. However, any Trezor wallet supports delegating coins to any staking pool or validator.

This is what stake key registration looks like for ADA on Trezor T:

trezor t staking

Trezor is the second most sold crypto wallet, and so you can be sure that staking pools will always provide an easy step-by-step guide on how to delegate stake into them Setting up pooled or dedicated staking from Trezor will not take a minute on most pools.

Here is what ADA Trezor staking set up looks like at AllNodes:

ADA Trezor staking set up allnodes

AllNodes supports Trezor staking of Polygon (MATIC), Cardano (ADA), Polkadot (DOT), Huobi Eco Chain, ETH2, The Graph (GRT), NEM and more.

The platform also has one-click apps to set up masternodes and validators using all common alt coins via Trezor wallets.

Get Trezor T or the cheaper Trezor One

Exodus staking via Trezor

Trezor wallets can also use Exodus wallet as an interface.

If you want to make use of the Exodus staking pool without holding your private key in the Exodus app, link your Trezor device to Exodus. (Jump to the section on staking at Exodus)

Easiest way to stake crypto: Staking on Exchanges

Several custodial exchanges let you earn yield on PoS altcoins just by holding them on the platform. Be careful: Staking on exchanges is custodial, you send coins away from your privately owned wallet.

On Binance, FTX, Bitforex and most other platforms you need to transfer coins into a staking area on the exchange in order to stake them.

Bitfinex stakes your coins automatically, as long as you keep them in the exchange wallet.

Other staking policies differ from one exchange to another as well:

  • Binance does not let you retrieve staked coins unless you chose flexible staking from the beginning.
  • Bitfinex only does flexible staking (soft-staking), your coins are never locked. You can move and trade your crypto at any time.
  • FTX locks your coins but lets you unstake them either within a set period for free or instantly for an extra fee.

It is not a good practice to hold crypto on an exchange. On the other hand, exchange wallet staking may realistically yield around 6% p.a. which can be an acceptable pay for taking the risk that your exchange will get hacked.

There are no solid rules in terms of how high a staking or lending yield is good enough to take that risk. Make your decision based on your own due diligence and risk appetite.

How to stake on Bitfinex

Bitfinex pays stakes for holding of the following currencies:

  • TRX
  • EOS
  • Tezos
  • Cosmos (ATOM)
  • Algorand
  • Cardano
  • Polkadot
  • Ethereum 2

Bitfinex calls their way of staking a soft-staking program.

They do not require you to lock up your funds for a certain period of time, nor to delegate them. You will simply get weekly income by holding one of the PoS coins above in the “Exchange” wallet on Bitfinex.

How does soft-staking work?

In soft-staking, you don’t delegate coins and there is no lock. You can withdraw coins at any moment.

In order to allow for the flexibility, soft-staking system on Bitfinex stakes only a portion of the total user pool of wallet deposits.

That is how there is always enough undelegated coins available to trade or withdraw your PoS coins. And it is also why the yield on Bitfinex is lower.

Another implication of the soft-staking system is that while there is no minimum deposit to stake (all deposited coins are pooled to be either moved by user or staked), you only get a payout if its value is over 0.5USD by the time rewards distribute every week. If your yield is lower, you lose that week’s payout to the house (who always wins /jk).

Should there be an “exchange run” and too many people would want to withdraw their PoS coins, Bitfinex says they would delay withdrawals until enough coins would be available after the staking period’s end.

This is the reason why you might sometimes get an error notice on staking exchanges like Bitfinex and Binance, nagging you that there is “not enough exchange balance available” when you try to move your coins.

Source: staking.bitfinex.com

Staking on Binance: Is it worth the hassle?

Binance offers a bunch of yield generating products - staking, DeFi, locked savings and liquidity provision.

Binance groups together DeFi liquidity providion and staking, calling the first flexible staking and the latter fixed staking.

Only fixed staking is the actual PoS staking where you provide coins into the network.

DeFi staking on Binance is lending into the market for a yield. Binance calls it flexible because it does not lock your funds for a set period.

Fixed staking (network staking) on Binance has limited availability, you do not always get to stake even if you own the right coin and hold it on the exchange.

In contrast to Bitfinex, on Binance you need to actively manage your holdings to get any staking income. That is certainly a drawback for crypto investors who have better things to spend their time on.

On top of it, fixed staking does not let you move them until your lock is over. Additionally, the maximum yields on established coins are way lower than on Bitfinex. You basically get the worst of both worlds on Binance.

On the other hand, if you already trade on Binance, staking there may just be convenient. It’s all under one roof, after all.

Also, Binance provides staking and DeFi yield generation for all sorts of new high-risk cryptocurrencies. The supply there is smaller and so the yields can shoot up to 40% or more even on a high-liquidity platform like Binance.

Lastly, the minimum amount you can stake on Binance is very low - usually 1 unit of the cryptocurrency. For cheaper coins like ADA that makes the barrier to starting to stake very low.

See today’s Binance POS rates

Staking on FTX: Smaller selection but better rates

On FTX, you can choose to stake several cryptocurrencies for a fixed period. It is a true network staking with high yields, especially high for an exchange.

The system is quite well designed. You lock your coins and start generating income, to retrieve them you make an “unstake” order. Your staked coins will be retrieved after a grace period (~ 14 days) or instantly for an extra fee.

FTX usually gives annualized staking returns between 10-20%, but the selection of coins to stake is smaller. As of May 2021, FTX lets you stake FTT (the exchange token), UBXT, SRM (low yields), FIDA, SOL and RAY.

Go to FTX Staking

Best place to stake crypto: Dedicated staking providers

allnodes

There is a growing number of dedicated staking providers that often grew as a side offer of masternode provision services. A huge staking node network is the US-based service AllNodes.

Staking providers run a network of nodes and pools into which small hodlers can chip in by delegating their coins from any common wallet.

Large holders, or holders able to pool users, will benefit more from running their own validator node. With big providers you can spin up a validator as a one-click app and start staking pretty much in minutes, without having to download and deploy the full node yourself.

Look around at AllNodes

How to stake via decentralized staking pools

  1. Large holders: Masternode Hosting or Validator Node Hosting

    Most providers let you deploy masternodes and validator nodes in minutes. There are automated or semi-automated setups for Ledger, Trezor and the usual single-coin wallets for that particular altcoin.

    There is a monthly hosting cost and sometimes other fees. On Allnodes, the monthly fee starts at only 5 USD though.

    Each coin has a (high) minimum of coins that you need to have to run a masternode or a validator. For masternodes and validators the upfront investment is significant, but your netto monthly income will typically be somewhere between 500-2000 USD.

  2. Small holders: Non-custodial Staking Pools

    Small holders pool by delegating money from their wallets and provide additional liquidity to validators.

    Some pools charge a flat fee for participation, some take a cut of the profits.

    To set up your participation, you just need to delegate coins from any wallet you’re using to the pool under a specific contract ID. You’ll get the exact instruction in your provider. It’s not complicated:

Look around at AllNodes

Calculate your maximum cold staking reward

Staking rewards fluctuate with the transaction activity on each blockchain and with demand.

Stakingrewards.com uses the real blockchain data to calculate the rewards for cold staking.

Note that if you use a staking pool or an exchange, you will always get less than the blockchain reward because you pay a fee to the staking provider.

To give you an idea, Coinbase charges a whopping 25% fee on your staking reward as per their ToS.

The other popular exchange staking destinations (Binance, Bitfinex, FTX) do not publish their staking fee but it can be reasonably expected from the final rates they do not charge less than 20%.

If you are looking for the highest paying coins to stake, here is a table of cold staking coins, sorted by descending reward: stakingrewards.com/staking

stakingrewards.com

Summary

There is a growing number of ways to yield staking income by securing PoS networks.

If you are not a technical person, you can choose the Exodus wallet or Bitfinex exchange to pretty much just deposit and forget.

If you are a larger holder, running your own validator will give you more revenue.

The tech overhead there is lower now thanks to staking providers that automate a good part of the process.

Latest Airdrops

Bitforex CORE airdrop - through 2022
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VeDNO airdrop whitelist - until 31 Jan
Fill in a gleam form and get 1000 VED tokens. There is a cap on the whitelist.
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