Cardano<\/a>, one of the most popular proof-of-stake cryptocurrencies in the market, is an ideal blockchain network for earning rewards. This is because Cardano is a multi-billion dollar asset class with a solid roadmap \u2013 so you can be sure you\u2019re staking coins on a legitimate and trusted protocol.<\/p>\nMany of the crypto staking platforms we reviewed support Cardano, including Coinbase and Binance. In addition, your Cardano tokens can continue to gain market value while you stake them on your chosen platform.<\/p>\n
2. USDC<\/h3>\n <\/p>\n
You should consider staking a stable coin like USDC if your main objective is to earn passive income without the broader market\u2019s volatility.<\/p>\n
Even though other stablecoins can be staked, USDC is backed by Coinbase, so you are sure to be investing in a trusted digital asset. Furthermore, unlike its fellow stablecoin provider, Tether, USDC has had its reserves audited. As a result, each USDC token in circulation is backed by a US dollar 1:1.<\/p>\n
The key advantage of USDC is that it allows you to earn interest without worrying about volatility, but it also offers some of the best staking rewards. Aqru, for example, offers up to 12% returns on USDC stakes.<\/p>\n
3. The Graph<\/h3>\n <\/p>\n
You may want to consider The Graph if you are looking for cryptocurrencies with great upside potential. This is because the underlying technology offered by The Graph enables blockchains to index data through this cryptocurrency, which is backed by the Ethereum network.<\/p>\n
Consequently, blockchains can automatically move unnecessary data off-chain, freeing up space so that the network can operate at its optimum efficiency. In addition, several leading platforms offer double-digit APYs on The Graph, which can be staked easily.<\/p>\n
4. Ethereum<\/h3>\n <\/h3>\n It is still possible to earn rewards on-chain even though Ethereum is still migrating from proof-of-work to proof-of-stake. However, ETH must be staked a minimum of 32 times before you can be registered as a validator on Ethereum. As of the time of writing, this would amount to a capital outlay of more than $85,000.<\/p>\n
On the bright side, you can also join a staking pool on the Ethereum blockchain. It simply means that you will be staking Ethereum with a small amount of money when you join forces with other token holders. Rewards on offer are determined by how busy the network is and how much is collected in transaction fees.<\/p>\n
5. BNB<\/h3>\n <\/h3>\n It\u2019s possible to earn staking rewards on BNB if you buy it and then avoid the fees that crypto staking platforms charge. As a result, you will never be charged a fee when staking BNB with the Trust Wallet cryptocurrency app. Any stake rewards you receive are 100% yours to keep.<\/p>\n
Additionally, if you stake BNB tokens using the Trust Wallet app, you will earn up to 11% APY. The rewards are also paid out daily, which is great for earning compound interest. You can withdraw your BNB tokens with Trust Wallet since it does not require a lock-up period of any sort.<\/p>\n
Is Crypto Staking Taxed?<\/h2>\n Cryptocurrency taxation is complex and will vary depending on your residency status and personal profile. For this reason, you should seek tax advice from a qualified professional. Additionally, some countries will look to tax staking earnings \u2013 although the rules will differ depending on the jurisdiction.<\/p>\n
Nevertheless, Coinbase notes the following:<\/p>\n
The taxes on stake rewards are calculated based on the fair market value of your rewards on the day you received them.<\/p>\n
Potential Risks of Crypto Staking<\/h2>\n In the presence of potential rewards, there will also be certain risks. Staking is not exempt from this sentiment, so consider the following risks before proceeding.<\/p>\n
The overarching risk associated with crypto staking resides in the third-party platform itself.<\/p>\n
Some providers require you first to deposit your crypto tokens into their wallets so that they can begin the staking process. As a result, you must trust that the platform is acting in your best interest. If a hack occurs and funds are stolen, you may be the victim, even if it does.<\/p>\n
Additionally, the agreement you have in place is with the staking platform, not with the corresponding blockchain network. Consequently, when you receive your rewards or make a withdrawal request, you trust that the platform will fulfill its obligations.<\/p>\n
Market Value Risk<\/h3>\n Staking is often misunderstood as offering guaranteed income. However, you should consider the market value of the cryptocurrency even if the platform keeps to its advertised APY and makes each subsequent payment on time.<\/p>\n
For example:<\/p>\n
\nImagine you sign up with a staking platform that offers a 50% yield annually on your chosen crypto asset<\/li>\n You deposit $1,000 in tokens<\/li>\n After one year, you\u2019ve earned the crypto-equivalent of 50% \u2013 or $500<\/li>\n One year after staking, the respective cryptocurrency increased by 80%.<\/li>\n As a result, even though you earned 50% in additional tokens, your original investment now has a market value of $200<\/li>\n<\/ul>\nAccording to the above example, when it comes to crypto staking, you should diversify as much as possible. Thus, you will be less likely to be overexposed to one project.<\/p>\n
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FAQs<\/h2>\n\n
\n What is crypto staking?\n \n<\/svg>\n <\/h3>\n Crypto staking is a new concept that allows you to earn interest in your cryptocurrency investments. Blockchain fees collected on proof-of-stake networks are used to fund this or cryptocurrency loans.<\/div>\n <\/section>\n
\n Is crypto staking worth it?\n \n<\/svg>\n <\/h3>\n Crypto staking is a great investment opportunity for long-term investors. After all, you can earn a regular income and reap the rewards of your cryptocurrency investments increasing in value.<\/div>\n <\/section>\n
\n What is the best crypto staking platform?\n \n<\/svg>\n <\/h3>\n AQRU is the most suitable platform for UK crypto staking.<\/div>\n <\/section>\n
\n What is proof-of-stake?\n \n<\/svg>\n <\/h3>\n In essence, proof-of-stake involves adding new blocks to a blockchain in a decentralized way, protecting the integrity of a cryptocurrency by preventing users from printing extra coins that have not been earned.<\/div>\n <\/section>\n
\n Do I pay taxes on staked crypto?\n \n<\/svg>\n <\/h3>\n It is necessary to pay taxes on staked crypto in the UK because they are subject to the UK capital gains tax described in the Income Tax Act. If that is the case, 50% of your crypto staking earnings will be taxed at the corresponding tax rate.<\/div>\n <\/section>\n
\n What is the best staking coin?\n \n<\/svg>\n <\/h3>\n The best coins to stake in the UK are Cardano (ADA), USDC, The Graph, Ethereum 2.0, and BNB because you can receive good interest rates on the amount you delegate every year.<\/div>\n <\/section>\n <\/div>\n\n