The 7 Best Staking Cryptos to Buy in 2024

In my experience, selecting the best staking crypto isn’t as straightforward as one might believe. Most users are drawn in by the promises of high yields, but never really dive into why you should stake one crypto vs another.

As a result, many people pay into a coin and find themselves disappointed by the realities of staking crypto. Therefore, we have put together this helpful staking coins list to aid you in your search for the best staking crypto to buy and earn staking rewards.

The Best Staking Cryptos to Buy in 2024

The Best Staking Cryptos Reviewed

What is Staking Coins in Crypto?

Staking crypto involves holding or a lock up period of a particular cryptocurrency in supported wallets or a platform to support the operations of a blockchain, DApp, or protocol.

Staking rose with the move to proof-of-stake blockchains where validators who had the most stake (i.e. coins) were more likely to be chosen to process transactions and receive rewards.

The more validators that stake coins, the more secure the network, hence the financial incentive to earn rewards.

By staking, individuals actively participate in the network’s sybil protection, validate and verify transactions, and maintain the network’s security. In return for their contribution, stakers receive passive income rewards in the form of additional cryptocurrency tokens.

Staking incentivizes users to hold their crypto assets, sometimes for a specified period, promoting network stability and decentralization. It provides an opportunity for individuals to earn passive income while actively supporting and securing the blockchain network they believe in.

How Does Staking Crypto Work?

Staking cryptocurrency requires keeping a specific amount of digital currency in a wallet, smart contract, or platform for a predetermined amount of time, as determined by the blockchain, DApp, or protocol.

In most cases, token holders support the network’s security by staking their crypto. They receive compensation in return, usually in the form of extra cryptocurrency tokens. However, staking may also give the staker certain rights and privileges on an application.

During the staking period, the staked amount is temporarily unavailable but is withdrawable once the duration is over. The payouts are proportional to the amount staked and the length of the time staked.

How Do You Choose Which Crypto to Stake?

When you choose a cryptocurrency to stake,there are several factors that you should consider.

Assess Project’s Credibility

Several projects offer staking rewards, but not all are worth the time and investment. Before choosing a crypto to stake, assess the project’s credibility, team expertise, and overall vision. Can you see yourself staking this token for an extended period? If not, maybe it’s not the one for you.

Evaluate Staking Rewards and Token Economics

Calculate the rewards and determine whether or not it’s worth the investment. You may need to do this across various staking options and even compare to traditional offerings. The ideal case is to stake cryptos that pay out rewards in stablecoins or other cryptos like ETH. A few projects to earn staking rewards, like GMX, do this.

Also gauge the staking rewards offered, especially for a staking pool that has “boosted rewards”. Most boosted staking rewards are done so using the platform’s native tokens. Platforms with outsized boosted rewards tend to have high inflationary tokens, so the inflation may wipe out the value of the staking returns.

Gauge Price Volatility

Oftentimes, a staking crypto’s price could fall to a level where all staking rewards are wiped out, leaving the investor with an overall loss. A good example is Arbidex whose token price dropped 97% within three months.

Even with a lucrative 200% yearly staking return, a position taken before the price decline would still be net negative. And seeing as the project is not a pillar like Ethereum, there’s a telling if the token’s price will rise to previous levels.

Stay Updated on Code Audits and Industry News

Ensure you are up to date on code changes and upgrades to staking pools and platforms. For example, Lido started allowing ETH stakers to withdraw their crypto after the Ethereum Shapella upgrade.

What Different Types of Staking Crypto are There?

There are many different ways that you can classify and evaluate staking. The broadest category is how to stake. This includes pure proof-of-stake, delegated proof-of-stake, or nominated proof-of-stake.

Additionally, you can evaluate on what level the staking is facilitated. For instance, staking on the blockchain at the protocol level, on a DApp or at the smart contract level are all associated with unique security assumptions and incentives.

Ethereum allows you to stake at the protocol level, Chainlink allows LINK holders to stake at the smart contract level, and staking on the Curve platform is an example of decentralized application staking.

What are the Risks Associated With Staking Crypto?

Staking crypto comes with several risks.

Market Volatility

Market volatility poses a risk as the value of staked tokens can fluctuate, potentially wiping out gains. The only way to eliminate this risk is to only stake stablecoins, but those pools are usually so saturated that their yields are often below 1% and therefore not worth it unless you stake gargantuan amounts.

Another way around this is to stick to large-cap staking tokens like Ethereum and Chainlink. While there is still volatility, there’s a smaller chance that the tokens lose 90% of their value within a relatively short period.

Smart Contract Risk

The smart contract that holds stakes tokens could be hacked and drained. The annals of crypto hacks are filled with stories of smart contract breaches. While there is no guaranteed way to prevent a hack, you can reduce the risk by only staking with established platforms and protocols.

Malicious Validator

Proof-of-stake systems require validators to act honestly and fulfill certain conditions. If the validators act dishonestly, their stake is slashed as a punishment. If you happen to stake with that validator, it means your stake is also slashed.

Regulatory Action

Shifting regulation can affect your ability to stake crypto. A good example is the current crypto regulatory landscape in the US. The SEC has taken legal action against centralized staking services in the US.

What are the Benefits of Staking Crypto?

Consistent Income

Staking offers consistent income for investors whose main goal is income generation. If you plan to hold the top long-term crypto, you can really take advantage of the income-generating capabilities, especially for sizable sums as many staking yields outpace that of US bonds.

Diversified Investment

Staking is also a means of diversifying your investment, even within your crypto portfolio. While some crypto can be bought for its growth benefits, you can also stake for income to provide a cushion for periods where the market and crypto prices are down.

Compounding Mechanism

Staking can also be a way to compound your investments as several protocols offer auto-compounding features that automatically reinvests returns in your staking position. This goes hand-in-hand with long term investments as you could exponentially increase the size of your investment over time by staking instead of just holding.

Who Should Stake Crypto?

Staking cryptocurrency is ideal for people who have a long-term investment outlook. It may be alluring to those looking for passive income who believe in the long-term viability of a specific cryptocurrency project.

Staking is also appropriate for people who are familiar with the risks associated with cryptocurrency investments and have a solid grasp of blockchain technology.

Investors seeking alternatives to conventional financial instruments and those who are eager to actively contribute to the development and security of blockchain networks might find it appealing.

What is the Difference Between Lending and Staking Crypto?

Lending Crypto	Staking Crypto
Tokens are given to other people to use	Cryptos are committed to the platform, not others people
Return comes from interest rate	Return comes from protocol or platform yield
Risk of users not repaying is mitigated by collateral	Risk of smart contract hacks still exist
Yield is usually at the lower end	Yield can be at the higher end depending on the platform

How to Stake Crypto?

1. Open an Account

Go to Coinbase’s website and click sign up. Input your information, such as: name, email, and password.

2. Verify Your Account

Verify your email address. After this, you will have to verify your account by giving your government issued ID and phone number.

3. Make a Deposit

Make a deposit by first adding a payment method. To add a bank, you will need your bank information, such as account details.

4. Purchase Cryptocurrency

Select a cryptocurrency to buy. Then navigate to the Earn section and look for the available cryptocurrencies to stake, and select Buy then stake.

The Latest Staking Crypto News

Bemo launches first liquid staking protocol on TON blockchain
EX Ankr and Blockdaemon executives launch Liquid Staking Derivatives L1 chain
UK Treasury opens consultation on taxation of DeFi lending and staking
Solana on-chain staking now on crypto exchange Crypto.com

Final Thoughts on the Best Staking Crypto

If you’re looking for good cryptos to stake, Chancer is our top choice because of the soundness of the underlying tech, its business case, and the fact that new projects tend to offer higher yields than most established ones.

Nonetheless, all the cryptos on our list are good staking options. However, remember that each staking cryptocurrency has a distinct set of features, benefits, and risks. The decision ultimately comes down to personal preferences, risk tolerance, and investment objectives.

Whether it’s the well-known and dependable Ethereum, the promising scalability of Polkadot, or the creative strategy of more recent projects like Avalanche. It’s crucial to conduct thorough research, consider market conditions, and stay updated with the evolving landscape of staking and choosing the best cryptocurrencies to invest in.

If you’re interested in staking but don’t know how to work a crypto wallet, check out our best staking platform page to learn how to use established exchanges to stake.

Methodology - How We Picked the Best Staking Crypto

The projects in this guide underwent extensive research and scrutiny, considering factors like market capitalization, inflation rate, market share, and reputation. The listed tokens represent the top choices in their respective categories.

Cosmos, for instance, stands out as an excellent staking token with high APYs and favorable inflation rates, providing validators with considerable APR to make a profit.

Check out our why trust us and how we test pages for more information on our methodology.

FAQs

What is staking?

Staking cryptocurrency entails storing or "staking" a specific cryptocurrency in a wallet or platform in order to support the operations of a blockchain, DApp, or protocol. Staking is essentially "locking up" collateral in order to gain exclusive rights to activities or privileges.

What cryptos can I stake?

You can stake cryptocurrencies that run on proof-of-stake blockchains. Some examples of these include Ethereum, Polkadot, and Solana.

Is staking risky?

Staking carries inherent risks, including the potential loss of the staked cryptocurrency due to smart contract vulnerabilities and dishonest validators. It's important to assess these risks before engaging in staking activities.

Which crypto gives the highest staking?

There are many different cryptos that generate high staking rewards. Although, the actual return may fluctuate based on the inflation rate. GMX has a very high return on staking when compared to many other cryptocurrencies.

Is crypto staking a good idea?

Crypto staking can be a good idea for those seeking to earn passive income and actively participate in blockchain networks. It offers the potential for rewards and can contribute to network security. However, it's essential to consider the risks, market conditions, and individual investment goals before deciding.

The 7 Best Staking Cryptos to Buy in 2024 | Staking Rewards & More