Web 3 is a space that allows us to be an active participant in any project. Participation is not only based on being able to exploit the product, but we can also participate in the process of creation, consolidation and growth. Today we will talk about What is staking, and we will see the best cryptocurrencies with which you can carry out this process.
The crypto space has a wide variety of mechanisms with the aim of maintain blockchain security and participate in governance. The proof of stake (or proof of stake) is one of the most used and efficient on the market. This mechanism is based on the token staking, which consists of the blocking the asset for an indefinite period of time in exchange for rewards.
What is cryptocurrency staking?
Token generation is one of the most important processes in the web ecosystem 3. There are various ways to obtain a certain token, the particular method of any token is mainly based on its characteristics and mechanisms.
In the crypto market, we can find blockchains based on proof of work and proof of stake. Precisely, the proof of stake (proof of stake) is one of the most efficient ways to generate tokens. This is because proof of work is much more complex and requires more energy generation to obtain tokens.
The efficiency in proof of stake is due to the fact that we only have to lock a certain number of tokens so we can become a validator and get rewards. Not only will we get rewards, we will also we will be able to actively participate in the governance of the ecosystem and be an important part in the evolution of the chain.
In order to become a validator, we must stake a specific cryptocurrency. Staking is used to verify all transactions that occur on a blockchain. Therefore, this is a crucial role in maintaining the functioning of the blockchain that is based on proof of stake.
Although staking is generally used on blockchains, it is also used on exchanges and dapps. As happens in chains, In decentralized applications, staking helps maintain security and activity in them. This system has similarities with own a savings account and receive interest, that is, profits for that money deposited.
The best cryptocurrencies for staking
In the crypto space, we have many cryptocurrencies that allow us to stake, although not all of them are usually profitable. Let's see which are the most profitable; of course, without neglecting security or medium-long term projection.
Ethereum
Of cryptocurrencies for staking, the ETH It is the best and one of the most profitable. The second most popular blockchain on the market, one of the largest and most diverse blockchains has moved to proof of stake some time ago to increase the efficiency of the network. At the moment, The APR is around 3.5% for participating in staking, although it may increase depending on the state of the network.
Ethereum staking has a large number of validators that ensure the proper functioning of the network. Furthermore, by becoming a validator of the network we can participate directly in the governance of the ecosystem and make important decisions for the benefit of the community.
Solana
Solana es one of the most promising blockchains in the cryptocurrency market and its popularity is proof of this. This chain is a great cheerleader for the market in recent bullish cycles, with a large community supporting its development. The speed of transactions allows stackers Validate a large number of blocks and get great rewards.
This chain has 5% annual rewards rate and we can deposit any amount of SOL as required. On the other hand, we must have a dedicated hardware to operate the chain or virtual machines in the cloud. It is also necessary to have knowledge of the Linux terminal codes that will allow us to configure it.
Polkadot
La Polkadot popularity on the market has always brought many users to this chain. The blockchain has great potential due to its low energy consumption, making it the most efficient in the crypto market.. This network is based on a proof of stake by nomination that allows it to increase its decentralization. Thanks to the NPoS (Nominated Proof of Stake), users can stake with just 1 DOT.
The average annual reward on this blockchain is around 15%, one of the highest in the crypto market currently. Without a doubt, it is a great opportunity to participate in one of the most promising chains.
tezos
La open source blockchain tezos It is a very interesting chain for investors. This chain is found supported by a large community of developers, researchers and users who actively participate in governance of this chain. This participation process is carried out through tez staking (XTZ) and allows you to propose or decide on the future of this ecosystem.
Staking this token allows us some annual rewards of more than 6%, a not inconsiderable figure. Tezos is a blockchain that has managed to sign contracts with large companies, such as the video game giant Ubisoft and the sports club Manchester United. These achievements are due to the great value that this chain has in the crypto space.
What risks may arise when staking?
Staking, like any other operation in the cryptocurrency market, can be risky. These risks can lead us to lose a considerable amount of tokens (or the tokens themselves lose value), so we must take precautions to minimize them. One of the biggest dangers in the crypto market is high volatility, which can cause us losses due to sudden changes in value.
Asset staking regularly presents a blocking period, so we will not be able to extract it for a certain time. The fluctuation of values and their volatility can endanger our investment when it is blocked. So keep in mind the timing of the market you are putting your funds into. stake.
How to choose a trusted validator?
An important point to define is the service providers, which one to choose? Like everything in the crypto market, you are exposed to scams. If you are considering entering this practice, it is best to look for a consolidated player in the market. We can recommend you to DragonStake, a Spanish team specialized in non-custodial staking (which means your funds will never have to leave your wallet).
DragonStake has great trust in the ecosystem, and helps you make staking on 10 different networks.
- Avalanche Staking
- Staking on Polkadot
- Staking on Kusama
- Staking on Cosmos
- Staking on Evmos
- Kava Staking
- Staking on Forta
- Ssv Staking
If we are interested in staking, the idea is that the asset is blocked long term. Stakers know that the cryptocurrency economy is cyclical and its value can recover and increase considerably. We just have to Be patient and keep these tokens locked for as long as necessary..
And that's all for today, let me know in the comments if you're considering putting your funds into stake.
