Crypto staking is a way to earn passive income by holding some cryptocurrencies.
Only cryptocurrencies running on PoS, or proof-of-stake, are eligible for staking. Staking is the mechanism that secures their blockchains and verifies the transactions.
In this article we cover:
- Staking from crypto wallets
- Staking via crypto exchanges
- Staking with dedicated staking providers and pools
Is staking risk free?
Staking income is not completely risk-free, but the risks are very low as long as you use a staking wallet like Ledger or Exodus instead of staking from an exchange. Not leaving coins on a custodial exchange lowers your risk of losing them through a security breach.
On the other hand, staking from an exchange does not lock up your coins for a set time period. Or not necessarily, the policy changes from one exchange to another. Flexible lock lowers your risk of losing your money during abrupt market movements.
Some of the security risks you can run into when staking:
- You stake a coin via delegating to a validator, and the validator decides to not pay you.
- Your staking wallet gets hacked.
- The exchange or provider that stakes your coins for you gets hacked.
- 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.
Top staking coins in 2021:
- 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 in Altcoin Wallets
Altcoin wallet staking has the best ratio of how easy it is, the yield it gives and the risks it exposes you to.
- Technically, it is not extremely demanding.
- The yields are higher than margin lending and usually higher than staking through exchanges or pools.
- As long as you secure your wallet and seed well, the risks are minimal.
Who’s Leading The Crypto Wallet Market in 2021
The most popular crypto wallets have the two key attributes:
- A popular crypto wallet must support a good range of altcoins.
- It also must have a good user interface.
Other than that, wallets will add all sorts of functionalities that are currently on trend, to retain their users.
Different crypto wallets go for different strategies.
Staking on Ledger Wallet
- Staking Supported: Any Ledger wallet via Ledger Live
- Staking currencies: Polkadot, Tezos, Tron, Cosmos, Algorand, Komodo, NEO
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 small and large holders.
- Ledger is focusing on adding new trendy coins as quickly as possible.
- Ledger offers a way to purchase new coins diretly without needing to go to an exchange.
Ledger integrates with dedicated node providers which is useful for larger holders who want to run their own node.
- Native Ledger altcoin wallets support staking.
- It is possible to manage external staking wallets from Ledger Live. If you want to use another staking wallet, you can import it into your Ledger and manage it from Ledger Live externally.
- Ledger Live also now comes with a crypto exchange on board with the Ledger Live app, and several times a year Ledger gives out gift vouchers to purchase crypto there. If you don’t yet have the crypto to stake, you can buy it there.
How to earn revenue from staking on Ledger
There are different ways to generate revenue directly in Ledger by staking.
- Komodo, NEO Holders can claim reward by only keeping their Komodo and NEO coins in their wallets. Rewards are proportional to the number of coins kept. Reward comes as a regular, on-chain transaction directly into wallet.
- 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.
- Any other PoS coin Holders can become validators themselves. This requires running a node. You would probably get a node deployed with a dedicated service and relay your Ledger wallet coins there.
In the simplest case (such as with Komodo and NEO) you just need to install your coin’s wallet on your Ledger device and move the crypto there.
Staking on Trezor wallet
Trezor One wallet does not support direct staking from its user interface. However, any Trezor wallet can be linked to a staking pool or validator through AllNodes and similar middlemen.
AllNodes has automated set up scripts for Trezor wallets. Setting up pooled or dedicated staking from Trezor will not take a minute that way.
Trezor wallets can also use Exodus wallet as an interface. Your Trezor coins can then go through the Exodus Rewards app to generate staking income.
- Jump to the section on staking at Exodus
Staking on Exodus Wallet
- Staking Supported: In Desktop version only - Exodus “Rewards” staking app
- Staking currencies: Algorand, Cosmos, Cardano, Ontology, NEO, Tezos, and VeChain
Exodus is the most popular free crypto wallet.
They have been around for a long time, provided easy ways to buy crypto as the industry pioneers, and integrate new features very quickly.
- Currently 130 assets supported in a single app.
- Both desktop and mobile Exodus apps continually add new DeFi coins.
- Staking app for 7 PoS altcoins is available in the desktop Exodus app.
Exodus wallets focus on user-friendly interface and making high-tech functions accessible to non-techies.
You cannot do anything too complex with Exodus. Exodus is a good 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 earn revenue from staking on Exodus
- Install the Exodus wallet for desktop from
- Install the Rewards app from inside of the desktop Exodus app.
- 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.
- 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: Exodus users are currently targeted by a phishing attack. Do not click on anything in e-mails that claim to come from Exodus. Always make sure your computer is clean and malware-free.
Staking on Exchanges
Some custodial exchanges let you earn yield on PoS altcoins. On Binance, FTX, Bitforex and most other platforms you need to transfer the coins you want to stake to offer them into a staking product. Bitfinex stakes your coins automatically, as long as you keep them in your wallet.
Clearly, the staking policies differ from one exchange to another.
- 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 earn revenue from staking on Bitfinex
- Staking Supported: Soft-Staking on Bitfinex (no KYC)
- Staking currencies: TRX, EOS, Tezos, Cosmos (ATOM), Algorand, Cardano, Polkadot, Ethereum 2
Bitfinex runs a so-called soft-staking program. They do not require you to lock up your funds for a certain period of time or delegate them. You will simply get income on some PoS coins by holding them in the “Exchange” wallet on Bitfinex.
Soft-staking rewards are paid out weekly. Rates are variable and lower than in dedicated staking apps.
What soft-staking system on Bitfinex does is it stakes only a portion of the total user deposits.
That is why you can trade or withdraw your PoS coins at any time, and it is also why your yield is lower.
Another implication of the soft-staking system is that while there is no minimum deposit to stake (as the coins are pooled anyway), 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.
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.
Staking on Binance: Is it worth the hassle?
Binance offers a bunch of yield generating products - staking, DeFi, locked savings and liquidity provision.
They actually group together DeFi lending and staking, calling the first flexible staking and the latter fixed staking. Only fixed staking is the actual PoS staking where you provide coins directly 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.
On the other hand, if you already trade on Binance, staking there is convenient. 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.
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.
Dedicated staking providers
- Staking Supported: Via staking nodes that pool user deposits. The biggest one is AllNodes
There is a number of dedicated staking providers that often grew as a side offer of masternode provision services. The largest staking node is the US-based service AllNodes.
Dedicated staking providers are a good choice for you if you are a largwe holder and if you are more technical.
Large holders, or holders able to pool users, will benefit more from running their own validator node.
With AllNodes you can lease a node hosting and start staking pretty much in minutes, without having to download and deploy the full node yourself.
AllNodes offer direct automated integrations with Trezor and Ledger wallets, as well as with single-coin wallets for specific PoS coins (Lunie, YOROI…).
How to earn income with staking providers
Staking providers give you two options. Decide based on the size of your holdings you want to stake.
- Masternode Hosting or Validator Node Hosting Allnodes lets you deploy masternodes and validator nodes for most cryptocurrencies.
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.
- Staking pool Allnodes pools smaller altcoin holders that 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 “Allnodes” pool under a specific contract ID. You’ll get the exact instruction upon sign up.
Risk note: Allnodes is a non-custodial platform that runs on smart contracts. If there is a vulnerability in the smart contract, you lose all your coins.
There are many 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 it. If you are a larger holder, running your own validator would give you more revenue. The tech overhead there is lower now thanks to staking providers that automate a good part of the process.