Earn passive income with crypto

What is staking?

Staking essentially means that you use your cryptocurrencies to generate passive income while contributing to the security of the blockchain.

Staking allows you to earn returns through Annual Percentage Yield (APY) rates, which may vary by token or platform. These returns can be up to 1000%, but these come with increased risk. On many DeFi platforms, you can bet on blue chips like Ethereum and Atom or choose between high-risk tokens. But you have to assess the risk yourself.

You buy the token and then stack it on the desired platform. When you bet, you also help secure the cryptocurrency blockchain.

Since cryptocurrency is decentralized, meaning there is no controlling body like banks or governments, the transactions are done in a decentralized manner via validators. They help ensure that everything runs smoothly. So staking strengthens the blockchain’s ability to process transactions and makes it more secure against attack.

There is usually a certain amount of time that your staked tokens are blocked before you can access them, called the block period. This can take up to 14 days or up to a month.

4 advantages of crypto staking:

Staking gives you:

  • the right of disposal
  • Passive income
  • air droplets
  • Security for your blockchain

vote

Stake often gives you access to a protocol’s token. With the native token you can:

  • vote on new proposals on the platform. This gives you the power to rule.

When it comes to cryptocurrencies (especially DeFi), decentralization is important. You are an investor in the protocol and as such have the right to vote on the submitted proposals that set the direction for the project.

Passive income

When you stake, you receive APY (Annual Percentage Yield) for releasing your tokens. These returns vary from token to token, but you can find some as high as 1000% with varying levels of risk.

It is imperative that you DYOR (do your own research) on projects. To minimize your risk of returns, you should only bet tokens that do not fluctuate extremely and whose price you believe will increase. I found that there are 3 types of yield farmers:

  • Blue chip token conservatives
  • High Risk Token Hunter (High Risk, High Reward)
  • A mixture of both

air droplets

Everyone loves airdrops! (I know I do). Airdrops are free money with a bonus. Airdrops are distributed when a project is launched on a dapps (decentralized app) or when a protocol wants to reward its loyal participants.

For example, for the Cosmos Ecosystem, the airdrops usually consist of tokens important to the ecosystem, such as OSMO, ATOM, and JUNO. In the past, projects typically required about 10 ATOM or 10 JUNO and 100 OSMO. Airdrops are usually announced via social media such as Twitter or Discord. It is important to be aware of the airdrop, as you often need to register your wallet before you qualify for the airdrop.

Blockchain security

Betting on your favorite chain ensures the safety of the system’s blockchain network.

Stake tokens use the Proof-of-Stake model, which is an improvement on Bitcoin’s old Proof-of-Work model. The old model required large amounts of energy to operate and was criticized for its potential environmental impact. Proof-of-Stake is much more energy efficient and scalable, meaning it can handle numerous transactions simultaneously.

It’s easy. You use your tokens to allow validators to verify and secure the blockchain. You and your validator will receive a reward for doing so. The validators usually charge a 5% commission for their service.

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