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Staking crypto is used when a cryptocurrency you own is ‘locked’ in a wallet and not available to sell. In return, the person who has your crypto locked up in a staking wallet will give you a small amount of interest or dividend on top of what was initially given by the staking company to hold your coins.
Staking is one of the easiest ways to make passive income with cryptocurrencies, but it’s important to remember that there is no guaranteed way of making money. It’s like any other form of investment; if you put your money in the bank, you can expect moderate interest rates on average, but what happens if suddenly interest rates rise?
Ways to earn passive income through staking crypto
1. Stake A marketing platform
A marketing platform is one of the most popular ways of staking. It usually involves proof of stake, which means that you will have to prove that you have a minimum amount of coins in your wallet to use their services. In return for providing funds, they provide an additional incentive on top of a percentage of stakes from people who wish to use your staking power.
2. Stake A Mining Pool
Although not as popular as marketing platforms, some mining pools allow you to stake coins in your wallet. Miners usually use it with smaller operations that don’t have the facilities or know-how of larger mining facilities. In return for using their services, they will provide a small percentage on top of what you already mined.
3. Stake Your Trading Bot
One of the latest trends in staking is to set up your trading bot and stake it with whatever cryptocurrency you hold that isn’t traded 24/7. This idea is that people would use the same algorithm as other bots but then link their wallet address to the bot and let it make trades for them based on the algorithm you set up. Of course, this takes a lot more technical knowledge than other types of staking platforms.
4. Stake A Lending Platform
While most people think of lending platforms as something along the lines of ‘get daily interest and return my initial capital whenever I want, that’s not the case. These staking platforms usually give a small % on top of any money you lend them, but they also make a lot of their revenue from withdrawing cryptocurrency from your wallet. They essentially loan out your coins and cash them in when the coin goes up in value.
5. Stake A Casino Or Gambling Platform
When the first casinos were online, there was a huge boom in staking. You could deposit your coins on one of these platforms, and they would provide some return depending on how well you did.
While most gambling sites don’t offer anything for people who stake their coins anymore, some do it to attract users. These sites will usually give a 1% – 5% return, depending on how much you bet and what types of games you play.
With staking crypto, you can make a decent return on your initial investment, but it’s important to remember that there is no such thing as guaranteed success. If the coin you chose happens to go down in value after you stake it, it will be harder to withdraw and thus affect your returns overall.