What Is Staking? How to Stake Coins to Boost Your Earnings

What Is Staking?

Staking coins are cryptocurrencies you can contribute to a blockchain network that uses the Proof of Stake (PoS) consensus mechanism. PoS is a transaction validation method that ensures security and stability for the blockchain, without consuming the high energy of Proof of Work.

When you stake coins, you lock a specific amount of crypto to support network operations. In return, you receive governance rights and voting power on important project decisions. More importantly, staking lets you earn passive income from your assets without frequent trading.

How Does Coin Staking Work?

Staking works by locking (staking) a set amount of tokens into a PoS blockchain. There are two primary ways to do this:

Method 1: Hold in the native wallet Store your coins in the project's official wallet and enable staking. The wallet automatically participates in transaction validation.

Method 2: Deposit into a smart contract Transfer tokens to specialized smart contracts that operate validator nodes. These nodes are crucial for verifying and approving new transactions.

Staked tokens serve to:

• Validate new transactions
• Operate and secure the blockchain network
• Maintain consensus among system nodes

In exchange for these contributions, you earn rewards (dividends) proportional to your stake. Rewards are usually paid as additional tokens, automatically sent to your staking wallet on a set schedule.

Which Coins Can You Stake?

Many coins now support Proof of Stake. These projects let users participate in staking and earn passive income.

Some of the most popular and reliable Proof of Stake coins include:

• Ethereum (ETH): After its move to PoS, ETH became one of the top staking options
• Cardano (ADA): Known for a flexible, user-friendly staking mechanism
• Polkadot (DOT): Offers high staking yields
• Avalanche (AVAX): Fast network with a straightforward staking process
• Cosmos (ATOM): Multi-chain ecosystem with many staking opportunities
• Tezos (XTZ): A pioneering PoS blockchain
• Algorand (ALGO): Features simple, automated staking
• Synthetix (SNX): DeFi platform with a unique staking system

Each coin has different requirements, yields, and staking methods. Always research carefully before deciding which coin to stake.

Is Staking Coin Profitable?

Staking coins not only helps drive network growth but also delivers attractive returns. That’s why staking is increasingly popular among crypto investors.

Staking yields Depending on the project, annual percentage yields (APY) from staking range from 2% to 15%. Some DeFi projects may offer higher returns, up to 20–100% APY during certain periods.

How you receive rewards Staking rewards are usually paid in the project’s native token. These tokens are automatically sent to your staking wallet according to a set distribution schedule (daily, weekly, or per block).

Dual benefits Beyond staking rewards, if the coin’s value rises over time, you benefit from price appreciation. Conversely, you should consider the risk of price drops during market volatility.

Top Staking Coins

Algorand

Algorand stands out with its exceptionally simple staking process and attractive dividends. A key advantage: you don’t need to lock your coins for a fixed term.

How to stake:

• Download the official Algorand Wallet
• Transfer ALGO from an exchange to your wallet
• Staking activates automatically when you hold ALGO in your wallet

Yield: Earn up to 6% APY. Rewards are distributed automatically about every nine minutes, giving you a steady stream of staking income.

Advantages: No minimum amount required. You can withdraw coins anytime with no penalty.

Cardano

Cardano is highly regarded for its flexible, decentralized staking system. When you stake ADA, your holdings represent your share and voting power in the network.

Two ways to participate:

1. Delegation: Delegate your ADA to stake pools run by others. This is the most common method, with no technical skills required and no need to keep your computer running.

2. Run your own stake pool: Best for those with technical expertise who want full control. This option requires higher initial investment.

Yield: Staking ADA can earn nearly 7% APY. Rewards are distributed each epoch (about every five days).

Standout feature: ADA is not locked while staked—you can use or transfer it anytime.

Polkadot

Polkadot offers some of the highest yields across trusted staking projects. To join, you can become a “Nominator” in the Polkadot ecosystem.

How it works:

• Nominators choose and delegate DOT to trusted Validators
• Validators operate validation nodes and share rewards with nominators
• You must hold the minimum DOT required by the network (amount may vary)

Yield: Investors can earn up to 16% APY as Nominators. Actual yield depends on your chosen Validators’ performance.

Note: DOT is locked while staking (typically 28 days), and you must wait through an unbonding period to withdraw.

Tezos

Tezos uses a unique term for staking—“Baking”—reflecting its network process. Like Cardano, users have flexible participation options.

Two ways to participate:

1. Delegation: Send XTZ to Bakers (node operators) to stake for you. This is the simplest method and requires no minimum XTZ amount.

2. Become a Baker: Operate a node to validate transactions. Requires at least 6,000 XTZ and technical knowledge.

Yield: Anyone can stake XTZ, earning up to 6% APY. Rewards are distributed after each cycle (about three days).

Advantages: Delegation is easy and can be done from many wallet types.

Alternative Staking Methods

Staking via Exchanges

Major crypto exchanges now offer simple staking services. This is the most popular choice for beginners due to its ease of use and accessibility.

How it works:

• Hold coins in your exchange account
• The exchange stakes coins for you automatically
• Yields depend on asset type and lock-up period

Leading exchanges support staking for a variety of coins. Some trusted platforms offer staking for over 20 coins, with annual yields ranging from 1% to 16%.

Advantages:

• User-friendly interface
• No technical experience required
• 24/7 customer support
• Flexible unstaking (product-dependent)

Disadvantages:

• Service fees may be higher than direct staking
• You don't hold your private keys
• Reliant on the exchange’s reliability

Crypto Savings Accounts

A crypto savings account works like a traditional bank savings account—but for digital assets. This is a stable, secure option for passive income seekers.

How it works: Your deposited crypto is used by the platform to:

• Provide liquidity for lending
• Generate profit from loan interest
• Share a portion of profits with depositors

Yield: Ranges from 1% to 20% APY, based on coin type and lock-up period. Stablecoins usually yield less (3–8%) but offer more stability; altcoins may offer higher yields but carry greater price risk.

Popular platforms:

• BlockFi: Supports major coins, competitive rates
• Celsius: No transaction fees, attractive rates
• YouHodler: Flexible deposit terms

Advantages:

• Safer than DeFi staking platforms
• Simple process, similar to bank savings
• Stable, predictable interest rates

Note: Choose reputable, licensed platforms with asset insurance.

DeFi Platforms (Decentralized Finance)

DeFi platforms offer the highest earning potential—but also higher risks. This option is best for experienced crypto users.

How it works:

• Deposit assets into liquidity pools
• Assets are locked in smart contracts
• You receive LP tokens representing your share
• Earn profits from trading fees and reward tokens

Yield: Very high—ranging from 20% to 100% APY, sometimes higher during special promotions. Yields can change quickly and are not guaranteed.

Popular DeFi platforms:

• Uniswap: Largest DEX on Ethereum
• PancakeSwap: Leading platform on BNB Chain
• Curve Finance: Stablecoin swap specialist
• SushiSwap: Diverse pools and farming opportunities

Risks to watch for:

• Impermanent loss from token price changes
• Smart contract hack risk
• Reward token values may drop sharply
• High gas fees during network congestion

Best for: Experienced users who understand DeFi and accept higher risks for greater potential rewards.

Professional Staking Service Providers

Specialized staking service providers offer comprehensive solutions for staking many different coins. This is an intermediate option between self-managed staking and exchange staking.

Key features:

• Platforms dedicated to staking
• Support for a wide range of PoS blockchains
• User-friendly interface, easy management
• Detailed yield statistics
• Professional customer service

Trusted providers:

• MyCointainer: Supports 100+ coins, simple interface
• Stake.Capital: Focused on major blockchain projects
• EverStake: Reliable validator on many networks
• Staked: Institutional-grade staking
• Stakefish: Trusted validator with years of experience

Benefits:

• Stake many coins from one platform
• No need for separate wallets for each blockchain
• Operated by professional validators
• High uptime, stable yields

Service fees: Usually 5–15% of rewards, depending on platform and coin.

Best for: Those seeking diversified staking across multiple blockchains without managing multiple wallets.

Conclusion

Staking coins is an effective passive investment strategy, letting you earn returns from your crypto holdings instead of leaving them idle. With options like direct wallet staking, exchanges, savings accounts, DeFi platforms, and professional service providers, you can find a method that fits your needs and risk profile.

Each staking method has pros and cons. Direct staking gives maximum control but requires technical skills. Exchanges and service providers offer convenience but charge fees. DeFi platforms offer the highest yields but the greatest risks. Savings accounts balance safety and yield.

If you're a long-term crypto investor, staking not only generates passive income but also helps develop and secure blockchain networks. Instead of letting coins sit idle, take advantage of staking to maximize your asset returns. Always research the project, understand the mechanism, and assess risks before staking any coin.

FAQ

What is staking? How does it work?

Staking means holding crypto to support a blockchain and earn rewards. Users lock tokens, help validate transactions, secure the network, and earn extra income from daily staking rewards.

How do I start staking coins? What do I need?

To start staking coins, you need a digital wallet and some coins to stake. Choose a reputable staking platform, then lock your coins and earn rewards following the exchange’s instructions.

Is staking safe? What are the main risks?

Staking is fairly safe, but the main risks are crypto price volatility, technical issues from smart contract bugs, and network risks. Always choose reputable platforms and understand all conditions before staking.

What are staking yields? How much can I earn?

Staking yields usually range from 5% to 21%, depending on the coin and lock-up period. Your earnings depend on the amount staked, current yield, and how long you participate. Rewards may be paid daily or weekly, depending on the platform.

Which coins are best for staking right now?

AVAX is one of the best coins for staking, offering 8–14% annual returns. Ethereum, Solana, and Cardano are also strong staking options with high earning potential.

How is staking different from mining?

Staking uses Proof of Stake and only requires holding coins, while mining uses Proof of Work and requires specialized hardware. Staking is more energy-efficient than mining.

How long do I need to stake before I can withdraw?

Withdrawal times for staking range from 24 hours to several months, depending on the platform and blockchain updates. Some coins can be withdrawn faster (1–7 days), while others require longer lock periods.