Staking is the new HODLING
As a beginner it’s hard to wrap your head around DeFi and staking, that’s why we present to you the top crypto staking opportunities. Learn more about staking and earning interest in your crypto holdings. Get an introduction to the basics of decentralized finance, or DeFi.
What is staking?
Staking is simply the act of putting the crypto you hold to work for you. Imagine, you’re sitting on 20 ETH, sure, you’re enjoying the peaks and troughs of the token value but you could stake that amount and receive interest back with favorable rates. Furthermore, the interest in some instances can be paid out daily, or upon request in the token originally staked.
Other options also exist whereby holders lock up tokens for a set amount of time for higher rates of interest. Holders can choose between 30, 60, and 90 day lock-up periods, for example. Within this timeframe, tokens cannot be sold but interest is still accrued. Exchanges and other platforms are basically pulling in liquidity this way. There are obviously risks associated with staking, as the value of the token could suddenly plummet.
The possibilities offered by the existing DeFi landscape on Ethereum, Binance Smart Chain, Polygon, and other networks have, without a doubt, accelerated wealth creation among the masses. Staking is arguably at the heart of that. It is now possible to yield stable returns by holding your crypto and without performing any trades or transactions.
In recent months, there has been an influx of projects that offer numerous staking opportunities with their own set rewards. However, there are specific DeFi protocols that stand out. These protocols not only represent the highest potential behind staking in its present form. But allow us a glimpse of a future where staking can become a sustainable channel of income.
In many of the instances you’re staking native tokens i.e on Synthetix you are staking SNX. The first stage is to acquire that token through an exchange such as Uniswap, QuickSwap, or PancakeSwap, for example.
Things to know before getting into staking
- The term APY refers to the annual percentage yield a depositor will receive.
- APY can change after the initial deposit occurs.
- Importantly it would never change to be negative or lose money.
- Some stalking pools run only for a limited time.
- Staking can be done directly with individual tokens but also through using liquidity tokens obtained through the platform providing the staking opportunity. Commonly referred to as LP tokens.
In all examples except ApeSwap an overview using data from Staking Rewards shows the expected earnings on a $5000 investment for 1 year at today’s prices. It is important to check constantly as the prices of crypto tokens are volatile and important to note that increasing the length of the stake will increase the APY in most cases.
Let’s take a look at some crypto staking opportunities.
Synthetix is a decentralized exchange on the Ethereum blockchain that allows for the trading and delivery of synthetic assets. Meaning specific digital assets that share similarities with or represent other real-world assets, including fiat currencies, cryptocurrencies, commodities, and shares.
The Synthetic Network Token or SNX is the utility token of the Synthetix network and plays a key role in the creation of synthetic assets, called synths. The Synthetix ecosystem offers users many mechanisms for revenue generation, including the ability to stake SNX tokens.
When users stake SNX tokens, their deposits are clocked automatically, and rewards are generated. Currently, Synthetix offers a staking reward of around 30% to its users.
PancakeSwap is a decentralized exchange built on Binance Smart Chain (BSC). Those familiar with Uniswap or SushiSwap will have no issue grasping PancakeSwap – they are quite similar in their core design. PancakeSwap uses an automated market maker (AMM) model. That means that while you can trade digital assets on the platform, there isn’t an order book where you’re matched with someone else. Instead, you trade against a liquidity pool.
Those pools are filled with other users’ funds. They deposit them into the pool, receiving liquidity provider (LP) tokens in return. They can use those tokens to reclaim their share, plus a portion of the trading fees. In short, PancakSwap allows users to trade BEP-20 tokens, or add liquidity and earn rewards.
Users can stake their CAKE and earn other tokens through special staking pools. The biggest so-called Syrup pool is simply for CAKE, where users can yield a 150% APY. Fundamentally users stake CAKE to earn even more CAKE. But there are many more tokens you can earn by staking CAKE, so be sure to keep an eye on the pool page.
ApeSwap is an automated market maker (AMM), yield farming, and staking platform on Binance Smart Chain. Interestingly, the application was actually forked from PancakeSwap and retains much of the same useability. BANANA is the native currency of the ApeSwap platform and allows users to stake, pool, and earn more BANANA tokens.
Liquidity mining started in February 2021 with what ApeSwap called a BANANA Frenzy. This was a special liquidity mining and staking program to incentivize early adopters and bring much-needed liquidity to the platform. The BANANA pool allows users to earn more BANANA in an almost identical way to that described on PancakeSwap. Similarly, users can stake their BANANA and earn other tokens through special staking pools.
The simple BANANA pool offers users a yield of around 170% APY and fundamentally stakes BANANA to earn more BANANA. But there are many more tokens you can earn by staking with ApeSwap, so be sure to keep an eye on the pool page.
Crypto.com is a centralized cryptocurrency and payment platform formally known as Monaco. Founded in 2016, Crypto.com already has over 3 million users and is arguably one of the most ambitious platforms in the space right now. Offering users an exchange, NFT market, DeFi platform, visa cards and earn products.
Users can purchase and stake CRO, the platform’s native token in order to receive a debit card with benefits attached depending on the level of stake. For example. Staking 250 euros worth of CRO will get you a Ruby debit card offering 2% cashback on all purchases and $14.99 towards your Spotify or Netflix bill paid in CRO. Secondly, the platform’s earn feature allows users to stake the cryptocurrencies they currently hold on the Crypto.com exchange.
The length of time users are willing to lock up their tokens will dictate the conditions but rates are between 2% and 10% on tokens such as CRO, BTC, ETH, and DOT currently with lock-up times ranging between 30 and 90 days.
Beefy Finance is a decentralized finance yield optimizer running on Binance Smart Chain that in essence allows users to make more crypto with the crypto they hold. Through a set of smart contracts and several investment strategies, Beefy Finance automatically maximizes the user rewards from various liquidity pools (LPs), automated market-making (AMM) projects, and other yield farming opportunities in the DeFi ecosystem. This provides a huge advantage over attempting to do this manually yourself.
Beefy Finance has its native governance token BIFI at its core. Platform revenue is generated from a small percentage of all the vault profits and distributed back to those who stake BIFI. Staking of the native BIFI token can return anywhere between 15% and 100% APY depending on the length of the stake.
Aave is an open-source and non-custodial protocol specifically designed to offer users the opportunity to earn interest on deposits and borrow assets. Launched on the Ethereum network originally, the platform has recently transitioned to layer-2 solution Polygon in order to offer customers fast and cheap transactions.
As mentioned, the platform is specifically designed for users to reap the rewards of staking their tokens so many options are available and worth exploring. Staking the native Aave token through the platform will currently return users around 5% APY whereas depositing TrueUSD can earn stakers up to 15% APY.
SushiSwap is a decentralized cryptocurrency exchange built on the Ethereum network. The automated market-maker model allows users to trade cryptocurrencies and earn yields in the form of trading fees and SUSHI tokens. Staking SUSHI is relatively easy and requires an Ethereum wallet containing SUSHI and ETH to pay for gas.
The platform offers numerous crypto staking opportunities aside from its own native token offer so options are available and worth exploring. Staking the native SUSHI token can earn a 9.13% APY.
Summary & Risks
Currently, there is an abundance of crypto-staking opportunities that can be explored within the DeFi space. However, some may offer higher staking rewards, and others might offer better security or more options. However, it is essential to approach with caution and a complete understanding. Remember, crypto, in general, comes with its risks; therefore, always do your research and make informed decisions.
No platform can be considered entirely risk-free and those looking to reap the rewards of staking should of course do their due diligence. In most cases, the protocol code is public and open source and it has been audited. Additionally, there are ongoing bug bounty campaigns live and running on almost all platforms helping them to discover weaknesses.
There are plenty more crypto staking opportunities out there, and some of them offer an APY of 1,000% or more. The APY drops when more people jump in. Often when an APY sounds too good to be true, it’s important to consider the possibility that it probably is.