Last Updated on Feb 28, 2023 by James W
If you’re someone who loves to work on building their wealth, recession and inflation are two words that you might dislike. However, there are several ways where you can turn your income “recession-proof”. With the current state of the global economy and the uncertain future of traditional investment options, many people are looking for alternative ways to diversify their income sources.
What if you already have a diverse portfolio and need fresh options?
One such method that has emerged in popularity recently is staking cryptocurrency. Interested to know more? This blog will explore what crypto staking is and how it works as a way to potentially earn passive income. Let’s get started!
Staking is the process of holding a certain amount of cryptocurrency in a digital wallet to help validate transactions and secure the network. In return for this service, users are rewarded with additional units of that same cryptocurrency. This is similar to earning interest on a savings account, but with the potential for much higher returns.
Staking helps to maintain the security and integrity of the blockchain network by incentivizing users to hold onto their cryptocurrency rather than sell it or trade it on exchanges. People often use Staking as a Service platforms like Kiln.fi to delegate these operations for more convenience. Not only are their processes automated, but the rewards are also automatically deposited in the wallet. All in all, it helps in reducing volatility and increase stability in the market.
Now that you’ve understood what staking involves, let’s look into which names allow staking. Not all cryptocurrencies allow for staking, but many of the popular names do! Some examples of cryptocurrencies that have staking enabled include:
- Ethereum (ETH)
- Cardano (ADA)
- Polkadot (DOT)
- Tezos (XTZ)
- Cosmos (ATOM)
Each cryptocurrency has its own staking rules and rewards structure, so it’s essential for investors to conduct individual research before deciding which ones to stake.
It may seem intimidating to stake cryptocurrencies on your own due to the technicalities involved, but we have simplified the process for you. Here’s what you need to do, explained in four simple steps!
- Choose a cryptocurrency of your choice that has the option to stake and create a digital wallet that supports staking.
- Buy your preferred cryptocurrency and transfer it to your staking wallet. If you already own cryptocurrency, simply transfer it to your wallet.
- Choose a staking pool or service to delegate your cryptocurrency to. This will require a small fee, but it makes the staking process much easier.
- Wait for your staking rewards to start accumulating in your wallet. Depending on the cryptocurrency, rewards may be delivered daily, weekly, or monthly. There is a certain amount of risk involved because the rates of cryptocurrencies are always fluctuating.
If you’re looking for a lucrative way to churn more passive income while using your cryptocurrency more efficiently, staking is one of the best investment strategies. Not only do you get the opportunity to be an active participant in improving the integrity of the blockchain, but also earn more rewards with time. However, it is essential for investors to do their research and pick a cryptocurrency that aligns with their investment goals and risk tolerance. We hope that our blog helped you with actionable insights that can build you more wealth.