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Guide to Staking and Earning Passive Income from Your Crypto Tokens

Posted by
Ian Kane

Stake it till you make it, using BTC, ETH, BNB, MATIC, ADA, and USDC

In 2021 staking quickly became the new hodling and can also be described as ‘locking up’. Arguably, in years gone by hodling tokens in a downturn was all one could really do. Now, it’s all different. The crypto-verse is awash with options for those still holding healthy-sized bags of crypto in the downturn. The reason we say healthy is that like anything, you need to speculate to accumulate. I.e 5% of not much is still not much.

What is Staking?  

Staking is simply the act of putting the crypto you already have to work for you. Imagine you are lucky enough to be sitting on 2 BTC and for staking it you can get 5% per annum. Staking for 12 months would mean 0.1 BTC will come back to you. At today’s prices that would be worth around $3,300 per year or $275 per month. Not a bad little passive income. 

For the purposes of this staking tutorial, we have selected some top cryptocurrencies by market capitalization and will provide information and resources on how much return to expect when staking each one and where you can get the best returns. If you want to check out a particular coin just click on the list below and you will jump to staking options for that. 

To access earning potential we will utilize StakingRewards.com. Percentages given here are averaged over all the providers. I.e if there are 15 staking options for BTC and the average of all their returns is 3.7% then that figure is what will be used to make the overall return calculation. 

Readers are then free to choose the platform they stake with in order to get the maximum, or safest returns. Furthermore, It is always worth checking the application you currently use to purchase and hold crypto. Applications such as Coinbase, Crypto.com, and the NEXO wallet all have staking options built-in. So to avoid gas fees and the stress of moving tokens it can be best to utilize their offers. 

In each scenario, it will be imagined that $5,000 of the particular token will be staked for 12 months. Importantly, you can stake any amount. The larger the stake the larger the reward but there are very few barriers to entry. 

Bitcoin (BTC)

The holy grail of crypto. The chances are you are sitting on at least some BTC. In most cases, holders are not looking to sell but instead clinging for dear life until the price surpasses the moon and starts heading for mars. Even then, we get the vibe they wouldn’t sell. Staking can take that asset and earn you a passive income. 

Here we can see that staking $5,000 worth of BTC over 12 months will return an average of 3.76% or $16.35 per month. Do the maths, if you’re holding $50,000 of BTC you could be earning over $150 per month in passive income. 

Ethereum (ETH) 

Ethereum is arguably the blockchain that led us to the point we are at today. And ultimately still the most important player in the space. Ethereum represents a vibrant, growing ecosystem of decentralized applications powered by smart contracts. Holders of ETH are usually early adopters or have come across this leading cryptocurrency through advice or research. Others perhaps just hold ETH to pay gas fees. 

Either way, here we can see that staking $5,000 worth of ETH over 12 months will return an average of 3.6% or $14.80 per month. Once again, like BTC if you’re holding $50,000 worth of ETH you could be earning over $145 per month in passive income. 

Cardano (ADA)

The Cardano platform has been designed from the ground up and verified by engineers and academic experts in the fields of blockchain and cryptography. Something the platform takes extremely seriously. Overall, Cardano wants to serve as a stable and secure platform for the development of decentralized applications (dapps). 

Here we can see that staking $5,000 worth of ADA over 12 months will return an average of 7.5% or $30.90 per month. Once again, if you’re holding $50,000 worth of ADA you could be earning over $300 per month in passive income. Or double the estimated income from both BTC and ETH individually. 

Binance (BNB) 

BNB is the native coin of the Binance Chain and powers the Binance ecosystem. Arguably, the introduction of the Binance Smart Chain in 2020 has been the key to BNB’s recent success. Binance Smart Chain allows the running of smart contracts and therefore applications to service retail users. BNB is required to make all this work. 

Here we can see that staking $5,000 worth of BNB over 12 months will return an average of 12.9% or $53.02 per month. Once again, if you’re holding $50,000 worth of BNB you could be earning over $460 per month in passive income. Not too shabby, we think you’ll agree. 

Polygon (MATIC) 

Polygon, formally known as the Matic Network is a platform designed for Ethereum scaling and infrastructure development. One major focus of Polygon is to diminish gas fees and increase transaction speed. All transaction fees on Polygon side-chains are paid in MATIC tokens which are significantly lower than on Ethereum.

Here we can see that staking $5,000 worth of MATIC over 12 months will return an average of 64.24% or $264.02 per month. This opportunity represents one of the highest percentage returns across all the tokens covered in this article per month. It can only be speculated that rewards are so good as the network attempts to quickly grow and continue to offer its users fast and cheap transactions. 

USD Coin (USDC)

USD coin is an algorithmic stablecoin. In human language, it’s an asset that unlike other crypto is pegged to the value of a real-world currency. In this case the US Dollar. So it doesn’t fluctuate in the same way crypto tends to do. One purpose of these coins is to give users a way to maintain their holdings without cashing out to fiat. They also provide an opportunity to users that wish to perhaps convert regular savings to stablecoins in order to get a higher return. For example, that $10,000 in the bank earning 1% a year (if you’re lucky). Could be flipped to a stable coin and then staked to earn higher returns. Importantly, there are many stablecoins such as DAI and USDT that will return similar percentages. 

For USDC we see that staking $5,000 worth over 12 months will return an average of 5.13% or $21.07 per month. Once again, if you’re holding $50,000 worth of USDC you could be earning over $210 per month in passive income. A lot better than the 1% per year available with traditional financial institutions. 

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