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TOP 10 Profitable Assets for Staking

James King -

The interest in cryptocurrencies is growing every day. People are attracted to these digital assets for their potential to increase value over time. However, buying and holding a cryptocurrency for a long time in hopes of making a profit might not bring the returns most people expect. Making your long-term crypto investment work to generate additional income could be a viable solution. Staking is a way crypto holders can earn rewards on their digital assets without cashing out.

If generating a passive income stream while maintaining ownership of your coins is attractive, this article is for you. Below, we list the cryptocurrencies with the highest staking rewards in 2023. Remember that staking requires a lockup period called ‘vesting.’ You cannot transfer or trade your crypto during this period, even if prices shift. Hence, make sure you understand all requirements and rules before staking a particular coin.

1. Ethereum (ETH)

Most investors new to staking immediately jump to Ethereum (ETH) as their first option. Ethereum is a market leader and the second most valuable cryptocurrency per market capitalization. So, one can easily understand its enormous popularity as a crypto to stake. Investors can opt for one of the following ways to stake ETH coins:

  • Running a node,
  • Delegating,
  • Pooled staking,
  • Centralized staking.

The first option could be profitable, but you must deposit a minimum of 32 ETH. This sum is high for most solo investors (more than $55K at the current exchange rate!). Moreover, being a validator requires some technical knowledge. Hence, an alternative is delegating your ETH to an existing validator, who will run a validator node. However, delegating implies paying a fee for node operations.

A much more affordable alternative is to hold your ETH coins in a staking pool. Simply put, you lend your ETH coins for other validators to use. The advantage is that you can start staking with as little as 0.01 ETH. However, the payouts ultimately depend on the staking platform you use. Finally, the easiest way to stake ETH is through centralized staking providers like Binance and Coinbase. The drawback is that such exchange platforms usually have custody of your ETH coins.

Currently, ETH validators earn around 2.48% Annual Percentage Rate (APR), whereas delegators earn an estimated 2.25%. You can earn between 4% and 7% using a staking pool. Finally, on a centralized ETH staking platform, you can earn 4%.

2. Cardano (ADA)

Staking ADA is an effective way to generate passive income while guaranteeing the Cardano blockchain's security. ADA is the 7th most valuable cryptocurrency by market capitalization and one of the most popular staking options. This popularity is, in significant part, the result of the simplicity of staking ADA using non-custodial wallets. Hence, most investors stake ADA directly instead of using the service from a third party.

You can use a full-node Cardano wallet like Daedalus to stake ADA directly. However, to use this wallet, you need technical knowledge and at least 16GB of RAM on your computer. An easier staking option is using a light wallet like Yoroi, which allows you to select a staking pool. You do not need a minimum staking deposit to stake ADA, although you need to pay a 2 ADA refundable fee. You can use a centralized exchange if you prefer a more straightforward staking option. However, you will not have custody of your ADA coins in such a case.

If you stake ADA using a non-custodial wallet, you can earn around 4.6% APR. If you opt for a centralized Cardano staking platform, you can earn between 2% and 6%.

3. Tezos (XTZ)

Tezos is a smart contract platform similar to Ethereum. Tezos’s native token, XTZ, is the 54th most valuable cryptocurrency per market capitalization. Staking XTZ can be profitable, but there are just a few options to do it. Running a node, known as baking in the Tezos ecosystem, is a way to earn staking rewards. However, to become a “baker,” you need a “roll,” which is equivalent to 6,000 XTZ (over $4.4K at the current exchange rate). Besides this minimum deposit, you must possess some technical knowledge to get set up.

Because of the above inconveniences, most investors delegate on non-custodial wallets like Ledger and Exodus. Alternatively, you can use a centralized staking platform, with the inconvenience of not having custody of your crypto.

If you run a node (bake Tezos), you can earn around 5.98% APR. If you delegate your staking through a non-custodial wallet, you can earn an estimated 5.31% APR. Finally, you can earn between 3% and 7% using a decentralized staking platform.

4. Algorand (ALGO)

Algorand is another blockchain offering attractive staking opportunities. By staking ALGO, investors contribute to securing the network while earning rewards. To stake ALGO, you must go to the ALGO Governance Portal and connect a supported wallet (MyAlgo, Pera, Defly, and others). The minimum deposit is 1 ALGO. Alternatively, you can use a centralized staking platform. However, considering how easy it is to stake ALGO directly, most investors prefer to retain custody of their assets.

If you stake ALGO directly with a non-custodial wallet, you can earn around 7.2% APR. In contrast, centralized staking platforms offer from 1% to 6%.

5. Solana (SOL)

Solana (SOL) is the 10th most valuable cryptocurrency by market capitalization and one of the most popular coins to stake. There are several options for staking Solana:

  • Running a node,
  • Delegating,
  • Centralized staking,
  • Decentralized staking protocols.

You must possess good technical knowledge to run a node for the Solana blockchain. First, you need to connect to a so-called Solana cluster to become a validator. Although no minimum deposit is required, you must pay a small fee for each block you validate, which might cost 1.1 SOL a day. Moreover, you must have a computer with at least 128GB of RAM and a 2.8GHz processor or higher.

Because of the above inconveniences, most investors delegate Solana using a non-custodial wallet (Phantom or Ledger, for example). Alternatively, you can stake through a centralized platform or a decentralized liquid staking protocol like Lido.

Staking Solana can be a profitable activity. You can earn an estimated 7.38% APR by running a node and 6.43% APR by delegating. A decentralized staking platform offers between 2.4% and 7%, whereas decentralized liquid staking protocols like Lido can offer around 6.7% APR.

6. Polygon (MATIC)

There are several options to stake MATIC, the native token of the Polygon network. First, you can run a node. However, this staking option requires a decent amount of technical expertise. Moreover, the minimum MATIC staking deposit must be greater than the balance of the 100th validator to join the active set of Polygon validators. If this option is not for you, you can delegate your MATIC using a non-custodial wallet. Alternatively, you can use a centralized exchange or a decentralized protocol to stake MATIC.

You can earn around 7.91% APR by running a node and approximately 7.35% for delegating MATIC. A centralized staking platform can offer 2% to 6%, whereas a decentralized protocol provides an estimated 4.2% APR.

7. Avalanche (AVAX)

Avalanche is a blockchain similar to Ethereum in that it supports smart contracts but is much more scalable and features lower fees. Investors can stake Avalanche’s native token, AVAX, to earn rewards. The options to stake AVAX are running a node, delegating, or using a centralized exchange. You must first install the AvalancheGo node software on your computer to run a node. Moreover, you must stake a minimum of 2,000 AVAX (equivalent to $23.4K at the current exchange rate).

Delegating is extremely simple using the Avalanche Wallet. You still need to deposit a minimum of 25 AVAX ($292.5 at the time of writing). You can stake on a centralized staking platform if you want a more straightforward option.

You could earn around 9.51% APR if you become a validator for the Avalanche blockchain. If you delegate your AVAX, you can earn an estimated 8.94% APR. A centralized platform can offer anywhere between 6% and 10%.

8. NEAR Protocol (NEAR)

NEAR Protocol is a layer-one blockchain supporting smart contracts and aiming to build the Web3 future through sharding technology. Investors can stake the NEAR native token through the usual options: running a node, delegating, or using a centralized staking platform. In this case, running a node is reserved for people with good inline coding knowledge. Moreover, the deposit required can be high, 25,205 NEAR at the time of writing ($30.2K at the current exchange rate). Hence, most users delegate their NEAR or use a centralized staking platform.

You can earn an estimated 9.9% APR by running a node for the NEAR Protocol blockchain. You can earn around 9.2% APR if you delegate your NEAR tokens and up to 11.9% APR on a centralized staking platform.

9. Polkadot (DOT)

Polkadot (DOT) is the 13th most valuable cryptocurrency by market capitalization and one of the most popular coins to stake. There are several ways to stake DOT. The first one is to run a node. However, this option requires technical expertise since you must use a Linux cloud server. Moreover, the minimum staking deposit must be higher than the balance of the lowest-ranked validator in the active set of validators. This deposit is dynamic and amounts to 350 DOT ($1.6K at the current exchange rate) at the time of writing.

You can open a nomination pool or nominate directly if you prefer a more straightforward staking option. Alternatively, you can delegate your DOT to a nomination pool using a non-custodial wallet (Ledger or Fearless Wallet will work). You can stake DOT using a centralized staking platform, as with all other cryptocurrencies.

You can earn approximately 15.3% APR by running a node for Polkadot. You can earn around $14.34% APR if you delegate your DOR. A centralized staking platform can offer anywhere between 7% and 14%.

10. Cosmos (ATOM)

Cosmos is a project aiming to solve some of the blockchain industry's standing problems. It also seeks to create an ecosystem of connected blockchains. Cosmos’ native ATOM token is a popular asset to stake. Running a node is an option to stake ATOM. However, you need plenty of technical knowledge to run the necessary Simapp application.

Moreover, to earn rewards, you need a minimum ATOM staking deposit, which must be greater than the balance of the 175th active validator. This minimum deposit is approximately 86,000 ATOM ($746.5K at the current exchange rate!). However, you can also delegate your ATOM using a non-custodial wallet (Cosmostation and Keplr, for example). Alternatively, you can use a centralized staking platform.

You can earn an estimated 25.2% APR by running a node for the Cosmos blockchain. If you delegate your ATOM, you can earn around 23.3% APR. Finally, centralized staking platforms offer from 6% to 21% APR.

Conclusion

We have presented a list of the ten most profitable cryptocurrencies to stake. As you can see, there are various methods to stake cryptocurrencies. You can choose the one that best fits your conditions. However, when you delegate your crypto assets, make sure you trust a reputable validator. You might lose your staked coins if the validator acts maliciously on the network. You can buy the crypto assets listed above on LetsExchange.io without mandatory registration and hassle.

Disclaimer

Please keep in mind that the above information is based exclusively on our observations and is provided for informational purposes only. It doesn’t constitute any kind of financial advice nor represents an official forecast. Cryptocurrency is a highly volatile asset, and you are investing in it at your own risk.