I recently wrote a post on the different ways that you can earn interest on your crypto. In that post, I briefly mentioned "staking" and how it's another option to earn crypto on crypto but how it's slightly different from lending it out to earn interest on it. So in this post, I will be addressing what staking is, how you can earn passive income just from holding certain coins, and where you can find out how to buy them.
Essentially, staking is when you lock up your crypto in return for a reward. This sounds very similar to earning interest but the difference here is that staking is coin specific. For example, you can't stake Bitcoin but you can lend it out to earn interest on it. There's no option to stake Bitcoin as that's not what the coin was designed to do. Bitcoin was designed to be a peer-to-peer electronic cash system according its white paper.
There are some coins however, that have a staking economics model behind it. A couple of these coins include: Tezos (XTZ), Neo (NEO), and Icon (ICX). The coins that I just listed have the capability for you to earn a reward just from holding them in your wallet. This means that you remain in full control of the keys to those coins at all times.
As a side note, Ethereum is set to launch version 2.0 later this year which offers staking; a minimum of 32 coins is needed to stake it (some of you may already know this though). Currently Ethereum uses a PoW (proof of work) algorithm but the founders are planning to move it to a PoS (proof of stake) model. PoW is the same algorithm that Bitcoin, along with a list of other coins, uses. PoW means that you're using computational resources from your hardware devices to solve complex computer problems to help add a block to the blockchain. In return you're rewarded with that coin. This process is also known as mining. However with a PoS model, the idea is that it's less energy intensive and that by staking your coins instead, the coin's blockchain can operate more effectively.
Staking can be a great incentive to buy and hold coins but I wouldn't necessarily buy them just because of it. I would only buy a coin if I genuinely saw that the coin has utility and is solving real world problems. For example, Ethereum's idea of smart contracts is helping to take out the middleman when it comes to finance, which is why decentralized finance (DeFi for short) is talked about a lot in the crypto community these days. This isn't to say that you should go out and buy Ethereum or any other coin because of what I or someone else says. Always do your own research first.
Now that we know what staking is, let's take a look at a website that lists all the coins that can be staked. The website is https://www.stakingrewards.com/. When you go there, you'll be presented to a homepage that looks like this:
According to them, there are 111 coins that can be staked. There are too many coins for me to post them all but here are just some of the coins that can be staked along with some information on them:
Hopefully the photo didn't make you go blind. I tried squeezing as much as I could in a reasonable amount of space.
When you click on a particular coin, you'll be brought to a page where it gives you some facts and figures on it. If we use Tezos as an example, this is just some of the information that's given to you:
They information tells you how much you can earn, how to stake it, where to stake it and etc. They pretty much give you all the information that you need to get started.
Even if you're not interested in staking, I think that the website is still worth checking out as you may come across a hidden gem that you end up liking.
Here's a video for those of you who like YouTube better:
After looking through the website you may have seen a couple of coins you're interested in and may be wondering where you can buy them. I would say that chances are that BINANCE has them. I know that Binance doesn't have all of them but I would say that Binance has the majority of those coins listed on Stakingrewards's website. You can check to see if they have the coins here: https://www.binance.com/en/markets. If you're thinking of signing up with Binance to buy some coins, here's a link to save 10% on your trading fees:
Save 10% on your trading fees with BINANCE
If the coins aren't listed on Binance though, then check out www.coinmarketcap.com where you can find a list of exchanges that have them.
For example, I know that Synthetix Network Token (SNX) isn't listed on Binance at the moment. Here's how you can find the list of exchanges that do have it.
Once you go to CoinMarketCap you'll be presented with a homepage that looks like this:
At the top right hand corner, there's a search box. When you type in SNX, it'll give you an option to select it. When you do, you'll then be brought to a page that looks like this:
Then click on the "Market Pairs" tab and you'll find a list of exchanges that SNX is listed on. It looks like SNX is listed on CoinEx and KUCOIN (there are more though). You can do this with any coin.
Hopefully this post was able to give you a better idea of what staking is all about, where to find these coins, and where to buy them. For yourself, if you own any coins that can be staked, I would love to know what coins those are! Leave a comment down below on your picks.
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