Staking as an alternative way to earn cryptocurrency

PoS coins offering rewards for locking funds in wallets have been predicted to replace PoW projects for several years, but until recently they did not prevail in the market.

But in 2021, the situation may change — Ethereum might switch to PoS (yet again..), which will double the staking market. Then coins with «passive income» will come to the fore, and exchanges will become the main validators. What platforms offer staking opportunities and under what conditions, what are the prospects for the development of this industry and why experts believe that staking will become a new trend for crypto exchanges.

Major exchanges launch staking service

Staking — storage of cryptocurrencies in a wallet to confirm transactions for a reward. There are several versions of it (with income from masternodes or from dividends), but all of them are united by the fact that for mining it is not the power of your device that is important (as in PoW), but the volume of coins owned by the miner. The more coins you have, the more income you will get.

The main attraction of staking for crypto investors is the ability to earn passive income. Users can receive rewards for mined blocks without getting validator status. Usually it is 2-7%, but it can go up to tens of percent. The specific percentage of staking profit depends on the coin and the validator site.

In theory, making money on PoS assets is simple: you just need to synchronize your wallet with the network, keep coins in it intact and do not disconnect from the network. After a certain time, the delegating network user will be credited with new coins as a reward for confirming the block. Technically, it is easier than buying expensive mining equipment, setting up devices, renting a room for them and constantly thinking about their payback. But in practice, making money on staking is not always easy. Projects can have high minimum investment, stringent coin blocking conditions.

Usually there is an entry threshold for staking, below which it is impossible to claim a share of the profit, for example, the validator of the Tezos network must have at least 10,000 coins. However, you can delegate any number of your coins to pools or exchanges that charge a percentage for it.