VeChain is one of the leading business blockchains. Its journey started in 2015 with an effort to improve the supply chain. Now, it collaborates with BMW, Deloitte, Louis Vuitton China, and other leading companies.
Initially, VeChain was running on the Ethereum blockchain but now, it runs on its own VeChain ecosystem.
It was the first project to address business customers’ needs. It strives to transform product life and supply chain management through distributed ledger technologies.
What Is VeChain Staking?
The VeChain project utilizes the Proof-of-Stake algorithm. The network uses a two-token model. It is done to prevent speculations on the utility token and avoid complications in network management. The VeChain network uses VET and VeThor (VTHO) tokens. VTHO tokens are used to power the network operations.
Users can stake VET coins to get rewards (rewards are paid in VTHO tokens) and participate in decision-making processes about the network.
How to Stake VET
There are two ways to stake VET. One way is to run a masternode. Another way is to stake VET in a cryptocurrency wallet and get dividends.
Running a Masternode
Running a masternode is more demanding than staking coins in a wallet. It requires more involvement and technical knowledge. But the rewards are much higher than if you are just staking coins in a wallet.
VeChain offers its users four holdings tiers:
- Strength (a minimum of 1 million VET is required)
- Thunder (minimum 5 million VET)
- Mjolnir (minimum 15 million VET)
- Authority node (minimum 25 million VET)
If one VET is worth around 0.01 USD, you would need to invest at least 200,000 USD to run the lowest tier. Therefore, running a masternode requires a significant initial investment. That’s why it is recommended to buy such cryptocurrencies when they just come into the market and when their price hasn’t grown yet.
Staking VET in your cryptocurrency wallet
It is more likely that you have a smaller number of coins. You can opt for staking in a cryptocurrency wallet and getting rewards.
There are a lot of cryptocurrency wallets to store coins. But not all of them support staking in general and VeChain staking specifically. Therefore, before selecting a wallet, make sure it supports the staking option.
VeChain offers two official wallets where you can keep your coins and get staking rewards:
Sync - for desktop users
VeChain Thor wallet - for iOS and Android users
Along with these wallets, you can choose one of the following options:
Trust wallet - it is a software wallet that allows you to keep your private keys on your mobile phone. The wallet supports the holding and staking of 14 coins, including VeChain.
Atomic wallet - it is a software wallet that allows you to store your private keys on your mobile device. It supports approx. 300 coins, including VeChain.
Exodus - it is a software wallet that supports more than 30 coins. Your private keys are stored on your mobile device. Staking is supported.
Crypto.com - it is one of the fastest-growing exchanges that offer wallet functionality. Most supported coins, including VeChain, can be staked.
They allow you to start to benefit from staking opportunities asap. To start using one of the wallets, follow the steps below:
- Open your selected wallet.
- Copy your VET address.
- Purchase the VET coins on a reliable cryptocurrency exchange (LetsExchange.io is one of the places where you can get the VET coins effortlessly).
- Benefit from staking by keeping the coins in your wallet.
With an official VeChain wallet, such as the VeChain Thor wallet, you can count on approximately 0.000432 VTHO per day from one staked VET coin.
Why Do I Need to Stake VeChain?
If you are interested in a project and consider VET as an investment option, you can either keep it in a wallet that doesn’t support the staking option or a wallet that supports it. If you can earn additionally just by keeping the coins, why not do so?
How Much Can I Earn with VeChain Staking?
There are some calculators that can help you to check how much you can earn from staking VET. The Thor calculator is one of the most accurate options. Consider also that the more coins you stake, the higher your rewards are.
If you consider staking coins by running a masternode, you will be getting even higher rewards than just by staking VET in your wallet. While staking coins brings you around 1.34% of income per year, running a node can boost this value to 2.27% per year.
Is Staking VeChain Safe?
For now, there were no issues with VeChain staking. As long as you keep your private keys secure, and as long as your wallet is protected, staking is safe. Your coins are securely locked in a smart contract which boosts the security level.
Of course, there are some risks like in any case when you deal with crypto. Your coins might drop in price. However, these risks are pertinent to all types of money, including fiat.
Benefits and Drawbacks of Staking VeChain
The main benefit of staking is that you earn income on coins that you store in your wallet. You don’t have to do anything, just keep your coins in a specific wallet and get your rewards.
The main drawback is that your staked coins are locked in a smart contract. You cannot use them immediately but only after some time passes.
Staking rewards are normally given once a month. If you pull your coins out of staking, you lose the rewards for the month.
Bottom Line
VeChain is a promising project. Many people might be interested in VET to invest in the long term. If along with just keeping coins, you can get some profit from it, we don’t see any reason to be reluctant to do it.