How to Earn with Crypto Staking
How to earn with crypto staking
It’s safe to say that staking is one of the most popular ways to earn with crypto. Staking is an activity in which you hold your coins in a cryptocurrency wallet to support the operations of a blockchain network. In turn, the network achieves consensus and rewards you for contributing to chain security.
In short, you can get more crypto with the crypto you already have by locking your coins for a set period of time.
In this article, we put the spotlight on the staking process on Binance, one of the world’s largest cryptocurrency exchanges.
Register for a Binance account with a special offer
First things first. If you don’t have a Binance account, you can register here.
After opening an account through the link above and funding your Binance wallet with at least $50 within 14 days, you’ll receive a cashback voucher worth 100 USDT. After logging in to your account, you can redeem it in the reward center and use it for future trades.
Keep in mind that to be eligible for staking, you must have sufficient cryptocurrencies which you intend to stake in your wallet.
Staking on Binance
To view the current staking options, go to your Binance homepage; choose “Earn” and then “Staking.”
Binance offers two ways to stake crypto on a regular basis: locked staking and DeFi staking:
- Locked staking
By default, you’ll see the coin options for locked staking, along with the duration you must stake your coins and the minimum amount you’re allowed to stake.
If you check the box “Display available only” on this screen, you can filter the results to view only the coins you can immediately start staking. At the time of writing, there are 99 available coins. You can expand to see all options.
Furthermore, you can choose the “Match my assets” box to see only the coins that match the coins you have in your Binance wallet.
Click on the “Stake Now” button and enter the duration for which you want to stake your coins. Binance may allow different quotas for staking for different durations, depending on the current situation. For instance, at the time of writing, it’s possible to stake 400 AXS when locked for 30 days, but only 2 AXS for 90 days.
Enter the amount you want to stake and confirm that you have read the “Staking Service Agreement,” and check the confirm button. Once you do that, the cryptocurrency amounts you staked will be deducted from the wallet.
It’s critical to understand that you can redeem your coins whenever you want. But if you redeem before the redeem period ends (i.e., 30 days or 90 days in our example above), you’ll lose the staking rewards distributed during the lock-up period. You’ll, however, always keep your principal.
If you want to redeem your coins or check the daily rewards, head over to Wallet -> Earn ->Locked Staking ->Locked.
Caption: Binance offers 3 ways to earn through staking. Register now to start earning staking rewards.
You’ll be able to see the coins you staked, the date, and the amounts you staked. The page also summarizes the total reward amount earned up to that point, the estimated APY, the total number of locked days, the end date of locked staking, and also the accrued days.
Locked staking guarantees that you’ll receive your earned interests even if the market falls, provided that you wait until the redemption period expires.
- DeFi staking
Your second option for staking on Binance is DeFi (Decentralized Finance) staking. In this method, Binance participates in certain DeFi products on your behalf. What this means is that you send your crypto coins to a DeFi mining project.
By participating in DeFi staking, you can get away with complicated tasks involved in DeFi applications, such as keeping private keys and trading within the DeFi app. Binance handles the required steps and distributes the realized earnings. Hence, you can reap the staking benefits with almost a single click.
Yields are higher with DeFi staking than with locked staking. But, as you may guess, DeFi staking is far riskier. Because you can’t hold Binance liable if your funds are lost in the DeFi project. That’s why every time you perform DeFi staking, Binance will show a risk warning to remind you of the associated risks.
A third staking option: ETH 2.0 staking
Staking is only available for cryptocurrencies that use proof-of-stake consensus. Right now, the Ethereum network is moving from proof-of-work to proof-of-stake. Binance has a special feature called ETH 2.0 Staking that enables Ethereum staking during this transition period.
If you think the Ethereum price will rise in the long run, you can opt for this option and lock your ETH holdings in your Binance wallet.
When you stake ETH, Binance will convert it to BETH currency. Your principal and the earned rewards will be kept in BETH. You can swap BETH for ETH at a 1:1 ratio on the day of redemption.
But, be careful! Because, unlike locked staking, you can’t redeem the staked Ethereum (your principal) prior to the redemption date. Moreover, the redemption date is unknown because it’s based on when ETH 2.0 becomes active. As a result, redemption can still take longer than 24 months.
Leaning into these 3 staking options will provide you with passive income simply by locking up your coins. However, be aware of the risks we mentioned above.
And remember: you can receive a 100 USDT cashback voucher by opening a Binance account following this link.