Here are the top staking coins with most potential in 2021, says top trader Mike Jenkins
In a recent video, the pseudonymous host of Coin Bureau, Mike Jenkins, shares the top staking cryptocurrencies with huge potential to generate massive passive income.
What is staking?
To kick off the video, Jenkins gives the basic explanations about the staking methodologies. There are technically two types of staking in cryptocurrency:
- The first is staking on a proof of stake blockchain. This is where validator nodes lock up cryptocurrency to process transactions on the blockchain and earn transaction fees and block rewards as payment for this service.
- The second type of cryptocurrency involves locking a coin or token on centralized or decentralized platforms and protocols. Rather than securing a proof of stake blockchain, this staked cryptocurrency earns rewards from lending, liquidity provision, or yield farming.
The first staking crypto coin on the list is Polygon (MATIC). Polygon is the most popular layer to scaling solution for Ethereum.
According to the trader, when it comes to proof of stake cryptocurrencies, MATIC is one of the best coins on the market.
MATIC staking rewards range from 520 percent per year to 5.2 percent per year depending on the total amount of MATIC being staked, and this reward currently sits at about 19 percent per year.
Another top-of-the-line proof of stake cryptocurrency is Terra (LUNA). Terra is a cryptocurrency project that makes it possible to create stablecoins that are backed by cryptocurrency.
Besides collateralizing stablecoins, LUNA is used for staking on Terra’s proof of stake blockchain, and LUNA staking rewards are stable at around 12 percent per year.
“Staking LUNA as a validator is extremely difficult and the threshold is quite high, given that only the top 100 validators with the largest stakes can earn rewards at the time of the shooting”.
Polkadot (DOT) is one of Ethereum’s top competitors, which is no surprise given that its founder Dr. Gavin Wood also co-founded Ethereum and played a critical role in Ethereum’s development.
“DOT is one of the top 10 cryptocurrencies by market cap and this is, despite the fact that Polkadot has yet to plug in the parachains that will power its massive ecosystem”.
Like Polygon, staking rewards for DOT vary based on how much DOT is being staked, and the current annual return is about 14 percent per year. Jenkins also notes that 300 DOT is currently required to stake.
Binance (BNB) is the world’s largest cryptocurrency exchange, and BNB plays an integral role in its various products, services, and platforms.
BNB staking rewards on the Binance Smart Chain can be as high as 30% per year. The caveat is that these staking rewards are not stable as they come from transaction fees alone.
“Becoming one of the 21 active validators on the Binance Smart Chain is no easy task and it also requires a minimum stake of BNB that works out to around 15 million dollars at the time of shooting”.
The last staking coin on the list is Ethereum (ETH). Staking on Ethereum 2.0 began last winter, and over 12 billion dollars’ worth of ETH is currently being staked by nearly 130 thousand validators even though the network isn’t technically live yet.
Any ETH staked on Ethereum 2.0 could be locked up for a year or more.
The strategist advises that this is not ideal if you’re planning on selling your ETH during this bull market. One platform that lets investors create this tokenized staked ETH is Ankr which will give aETH when you stake regular ETH in their web app using Metamask.
Disclaimer: Opinions expressed at AZCoin News are not investment advice. Investors should do their due diligence before making any high-risk investments in cryptocurrencies. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. AZCoin News does not recommend the buying or selling of any cryptocurrencies.
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