
<p>The challengers to Ethereum are many. In this two part series, we go through seven potential challengers, aiming to cover what each of them brings and where they stand in this race to the top. The first part includes an introduction to each of the projects, their technology and how they&#8217;ve been taking on Ethereum. </p>



<h2><strong>Ethereum 2.0: An introduction</strong></h2>



<p>The Ethereum blockchain is currently amidst a multi-phased upgrade. This upgrade, labeled Ethereum 2.0, aims to address the network’s scalability, security and sustainability. The upgrade is planned in three broad phases, </p>



<ul><li>The Beacon Chain</li><li>The Merge</li><li>Shard Chains</li></ul>



<p>The Beacon Chain, which went live in December 2020, most notably aims to switch the Ethereum network from a Proof-of-Work (PoW) consensus mechanism to a Proof-of-Stake (PoS) model. In its current form, the Beacon Chain operates separately to the Ethereum Mainnet. It has, most importantly, introduced staking within the Ethereum ecosystem. Presently, the options available to stake Ethereum include,</p>



<ul><li><em>Running a Validator</em>: This requires staking 32 ETH (Ethereum) to activate validator software. In the role of a validator, you are responsible for storing data, processing transactions, and adding new blocks to the blockchain. At Staking Rewards, we view this way of staking as &#8220;Very Hard&#8221; when it comes to complexity. </li><li><em>Participating in a Staking Pool</em>: A relatively easier way of staking ETH is by participating in available staking pools. This, neither mandates the minimum of 32 ETH for staking as is the case with running a validator, nor requires the technical expertise. <a href="https://stakingether.com/" target="_blank" rel="noreferrer noopener">Here&#8217;s a list of staking pool services</a>.</li></ul>



<p>For details around the APR for each of these options and more, <a href="https://www.stakingrewards.com/earn/ethereum-2-0/" target="_blank" rel="noreferrer noopener">check out our dedicated page for Ethereum 2.0</a>. There&#8217;s even a list of essential FAQ&#8217;s to better your understanding. Currently, a total of 8,034,525 ETH has been staked through a total of 242,621 validators (Source: <a href="https://ethereum.org/en/" target="_blank" rel="noreferrer noopener">Ethereum.org</a>). </p>



<h3>Sharding</h3>



<p>What lays ahead for Ethereum 2.0 is the integration of the Ethereum Mainnet into the proof-of-stake system, controlled and coordinated by the Beacon Chain (Estimated delivery: Q1/Q2 2022). Following this, sharding will be introduced to improve Ethereum’s scalability and capacity (Estimated delivery: 2022). In a nutshell, sharding is the process of splitting a database to spread the load. In the context of the Ethereum network, sharding will reduce network congestion and increase transactions per second (TPS) by creating new chains, known as “shards”.</p>



<p><a href="https://twitter.com/vitalikbuterin/status/1277961594958471168?lang=en" target="_blank" rel="noreferrer noopener">As per Ethereum founder Vitalik Buterin</a>, ETH 2.0, once implemented, will boost network speeds of up to potentially 100,000 transactions per second (TPS). To put that in perspective, Ethereum currently offers a network speed of around 12.5 TPS (30 Sep 2021; Source &#8211; Etherscan), translating to nearly 1 million transactions per day. Imagine what 100,000 TPS could bring in!</p>



<p>With that background to Ethereum 2.0, let&#8217;s jump into seven projects attempting to dethrone Ethereum. For the sake of convenience (and devoid of any bias), these projects are listed below based on their market capitalization.</p>



<figure class="wp-block-image"><img src="https://lh4.googleusercontent.com/AwNdnNGirjKiG2FOtZdSLNe4olhRL6o9XZhP9yaJ05C8sTPUWXODdGpACF5M0LWcRay9H_PEaS5lfX_bNFDtqew5zs77FGe09qfXuKv15L4qxpJjKrdo8foP8p5JO_MKzw" alt=""/></figure>



<figure class="wp-block-image"><img src="https://lh5.googleusercontent.com/6wbFIMQhkOorFevtlhsN1Y--umdY9o_jEPSIExUc8SN722lDfNk64BbF50kRB0t5IGjLer3M3ly8bYgazNtW3Pt2iGQ2tfQ3I9eupHlGyr8QueipDBkWe04gbn4C5Kz7FQ" alt=""/></figure>



<h2>1. Cardano (ADA)</h2>



<p>Founded by an Ethereum co-founder, <a href="https://cardano.org/" target="_blank" rel="noreferrer noopener">Cardano</a> pips itself as a third-generation blockchain aiming to solve the scalability and other issues faced by Ethereum. Cardano, a proof-of-stake blockchain platform, was launched by Charles Hoskinson in 2017. </p>



<h3>How is Cardano taking on Ethereum?</h3>



<p>Cardano has implemented what it calls the Ouroboros Proof-of-Stake protocol. Ouroboros processes transaction blocks by dividing chains, firstly, into epochs. The epochs are then further divided into time slots. A slot leader is elected for each time slot and is responsible for adding a block to the chain.&nbsp;</p>



<p>As per <a href="https://coinmetrics.io/" target="_blank" rel="noreferrer noopener">Coinmetrics</a>, as on 30 Sep 2021, Cardano recorded 1.03 TPS, which stands significantly lower than Ethereum. In an attempt to maximize throughput, minimize latency, incurring low to no costs, Cardano is currently working on implementing a Layer 2 scaling solution called Hydra. Hydra has the supposed potential to scale Cardano up to <a href="https://www.investing.com/news/cryptocurrency-news/cardano-to-scale-up-to-2m-tps-with-hydra-layer-2-2518690">2 million TPS</a>.</p>



<h3>Staking ADA</h3>



<p>Please check our detailed guide on <a href="https://www.stakingrewards.com/earn/cardano/" target="_blank" rel="noreferrer noopener">How to Stake Cardano (ADA)</a>. Currently staking ADA can earn an APR of over 6%. To give you a perspective on how popular staking ADA is, there are nearly 902,016 stakers, with a total staked value of $51.9 billion. The participating ratio, percentage of eligible tokens that are being staked, currently stands at 70.63%.</p>



<h2>2. Binance Smart Chain (BSC / BNB)</h2>



<p>Introduced by Binance, the <a href="https://www.binance.org/en/smartChain" target="_blank" rel="noreferrer noopener">Binance Smart Chain (BSC)</a> blockchain has put together a full-fledged environment for developing decentralized applications. It also boasts of smart contract functionality and compatibility with the Ethereum Virtual Machine (EVM). Put simply, the EVM runs execution and smart contract deployment on the Ethereum blockchain. Relatively younger, BSC launched in September 2020. It, however, has made its mark among projects attempting to dethrone Ethereum, covering ground when it comes to speed and costs. </p>



<h3>How is Binance Smart Chain taking on Ethereum?</h3>



<p>BSC introduced what is called the Proof-of-Staked-Authority (PoSA) protocol. This requires that network validators stake a certain number of BNB tokens to participate. Besides this, by adopting a dual parallel-chain system, Binance lets users make fast transfers on the Binance Chain while using the smart-contracts functionality of the BSC. One area of concern when it comes to BSC has been centralization. BSC has 21 active validators, making it among the most centralized platforms. To put that in perspective, ETH has 248,287 active validators.</p>



<p>Offering low costs and faster speeds, BSC is making inroads in Ethereum&#8217;s dominance in certain segments. As per <a href="https://defiprime.com/bsc" target="_blank" rel="noreferrer noopener">DeFi prime</a>, of the 242 DeFi projects listed on their platform, 41 of them are built on BSC (220 on Ethereum). As per <a href="https://bscscan.com/" target="_blank" rel="noreferrer noopener">BSC Scan</a>, the BSC network currently handles 77 TPS (30 Sep, 2021), translating to over 6 million transactions a day. The network has recorded a high of 13.1 million transactions on Jul 29, 2021 (Source: BSCScan). By comparison Ethereum has recorded a high of 1,716,600 transactions on May 9, 2021 (Source: Etherscan).</p>



<h3>Staking BNB</h3>



<p>Staking BNB can return very competitive yields. Currently, the APR on staking BNB is in excess of 10%. Besides, the process of staking is easy. For a quick insight, check out the <a href="https://www.stakingrewards.com/earn/binance-smart-chain/" target="_blank" rel="noreferrer noopener">Staking Rewards page on BNB</a>. There&#8217;s even a handy tool to calculate expected returns from staking.3. Solana (SOL)</p>



<p>If you hadn&#8217;t heard of <a href="https://solana.com/" target="_blank" rel="noreferrer noopener">Solana</a> last year, chances are you have pretty much heard of it this year (probably, a lot of it) . From a price of $1.54 per SOL on 31 Dec 2020, it currently trades at $136, with a market capitalization of over $40 billion (as on 30 Sep 2021), making it the 7th biggest crypto project. Solana is a blockchain platform for decentralized apps. An open-source project, maintained by the Geneva-based Solana Foundation, it has been built by developers at San Francisco-based Solana Labs. The co-founders at Solana are Anatoly Yakovenko and Greg Fitzgerald.</p>



<h3>How is Solana taking on Ethereum?</h3>



<p>Solana does not depend on sharding or Layer 2 solutions to scale. Instead, the Solana network is built of <a href="https://medium.com/solana-labs/turbine-solanas-block-propagation-protocol-solves-the-scalability-trilemma-2ddba46a51db" target="_blank" rel="noreferrer noopener">8 key components</a>, a crucial one being Turbine. Inspired by BitTorrent, Turbine transmits data using UDP (User Datagram Protocol), implementing a random path per packet through the network as leaders (block producers) stream their data. The leader breaks the block into packets up to 64KB in size, and transmits each packet to a different validator. Validators retransmit the packet to a group of peers, referred to as a neighborhood. </p>



<p>As on 30 Sep, the Solana network is processing 2000 TPS (Source: <a href="https://explorer.solana.com/" target="_blank" rel="noreferrer noopener">Solana Explorer</a>). The project claims to have <a href="https://twitter.com/solana/status/1247912274880155648?lang=en" target="_blank" rel="noreferrer noopener">a capacity of 50000 TPS</a>.</p>



<h3>Staking SOL</h3>



<p>Running a validator on Solana can attract an APR of 7.36%, while delegating SOL yields a 6.64% APR. We&#8217;ve put together a detailed pictorial guide on <a href="https://www.stakingrewards.com/journal/how-to-stake-solana-sol/" target="_blank" rel="noreferrer noopener">how to stake SOL</a>.</p>



<h2>4. Polkadot (DOT)</h2>



<p>Created by another of Ethereum&#8217;s co-founders, Gavin Wood, <a href="https://polkadot.network/" target="_blank" rel="noreferrer noopener">Polkadot</a> seeks to solve Ethereum&#8217;s scalability and cost issues. Dubbed by many as the <em>Ethereum Killer, </em>Polkadot has focused its attention on enabling interoperability, allowing blockchains to communicate with each other. The project promises economic and transactional scalability. </p>



<h3>How is Polkadot taking on Ethereum?</h3>



<p>Central to the Polkadot infrastructure is the Polkadot Relay Chain, the main blockchain of the DOT ecosystem. The Relay Chain is responsible for the network’s shared security, consensus, and cross-chain interoperability. The DOT network scales by processing transactions across multiple parallel blockchain shards known as parachains (individual specialized blockchains). Interactions on parachains are processed in parallel, enabling high scalability.</p>



<p>Currently, Polkadot processes around 1.70 transactions per second (data from 30 Sep 2021; Source &#8211; Coinmetrics). While this is significantly lower than Ethereum, <a href="https://twitter.com/gavofyork/status/1255859146127179782" target="_blank" rel="noreferrer noopener">as per Gavin Wood</a>, the DOT network, even without parachains, can deliver in excess of 1,000 TPS. With parachains, Wood expects this capacity to go upto 1,000,000 TPS. The progress in this will most definitely be keenly watched.</p>



<h3>Staking DOT</h3>



<p>Staking DOT currently offers a very competitive APR of approximately 13%. One has the option to either run a validator node, delegate DOT or lend Polkadot. To get a comprehensive understanding on <a href="https://www.stakingrewards.com/earn/polkadot/" target="_blank" rel="noreferrer noopener">staking DOT</a>.</p>



<h2>5. Avalanche (AVAX)</h2>



<p>A comparatively younger blockchain, <a href="https://www.avax.network/" target="_blank" rel="noreferrer noopener">Avalanche</a> launched a little more than a year ago, in September 2020, by the Ava Labs team in the US. The core team behind Avax Labs includes Kevin Sekniqi, Maofan &#8220;Ted&#8221; Yin, and Emin Gün Sirer. Claiming to be the fastest smart contracts platform in the blockchain industry, as measured by time-to-finality, Avalanche is attempting to tackle the issues of blockchain scalability, transaction fees, and interoperability. </p>



<h3>How is Avalanche taking on Ethereum?</h3>



<p>In order to tackle the speed and scalability issues faced by blockchains, the team at Avalanche has opted to build the Avalanche network from three interoperable blockchains: the X-Chain, C-Chain, and P-Chain. Each blockchain takes on different roles. X-Chain, for example, can create and exchange AVAX tokens and other digital assets. C-Chain lets developers create smart contracts for DApps. P-Chain coordinates network validators, tracks active subnets, and allows for the creation of new subnets.</p>



<p>The Avalanche platform claims to have a capacity of processing over 4500 TPS currently. Currently, it is recording TPS of 3.9.</p>



<h3>Staking AVAX</h3>



<p>We&#8217;ve put together a <a href="https://www.stakingrewards.com/journal/how-to-delegate-avax-with-the-avalanche-wallet/" target="_blank" rel="noreferrer noopener">step-by-step guide to staking Avalanche (AVAX)</a>. It&#8217;s worth it, given staking AVAX yields an APR of over 9%.6. </p>



<h2>6. Tezos (XTZ)</h2>



<p>Initially designed in 2014, the <a href="https://tezos.com/">Tezos</a> mainnet went live in 2018. Tezos describes itself as an open-source, self-upgradable blockchain built to support and run smart contracts. It has been developed by Arthur Breitman and his wife, Kathleen Breitman, and is currently overseen by The Tezos Foundation.</p>



<h3>How is Tezos taking on Ethereum?</h3>



<p>Tezos’ blockchain is made up of two distinct parts, the network shell and the network protocol. The network shell handles transactions, administrative operations, amending itself based on how users vote. The network protocol sends proposals to the shell for review. Adopting a Liquid Proof-of-Stake (LPoS), Tezos requires users to stake tokens, a process known as “baking” XTZ. A validator on Tezos is referred to as a baker.</p>



<p>Average daily transactions, based on the past 30 days, is 316,396 (Source: Tzstats). As per Coinmetrics, Tezos clocks in at 3.2 TPS.</p>



<h3>Staking Tezos</h3>



<p>We&#8217;ve put together a detailed guide on Tezos and staking XTZ, <a href="https://www.stakingrewards.com/journal/staking-coins-tezos/" target="_blank" rel="noreferrer noopener">available here</a>. Delegating XTZ comes with an APR of 5.5%, while baking XTZ independently can return over 6%.</p>



<h2>7. Near Protocol (NEAR)</h2>



<p>After having been started off by Illia Polosukhin and Alexander Skidanov as a machine learning project, NEAR became a blockchain development platform. Researching program synthesis led the team to explore programmable smart contract platforms and crypto payments. The network eventually launched in April 2020. NEAR, today, calls itself an open source platform that enables creators, communities, and markets to drive a more open, interconnected and consumer-empowered world.</p>



<h3>How is NEAR taking on Ethereum?</h3>



<p>NEAR adopts sharding to split the network, dynamically distributing the computation to increase the network&#8217;s processing capacity. Its innovations include a new take on sharding, known as Nightshade, and a new consensus mechanism known as Doomslug. Nightshade differs from the generally used sharding systems, in that each shard produces a fraction of the next block, also known as a &#8220;chunk&#8221;. </p>



<p>Despite being a newcomer of sorts, NEAR has seen a rapid rise in the number of transactions processed. As per <a href="https://explorer.near.org/stats" target="_blank" rel="noreferrer noopener">Near Explorer</a>, based on data from the past 15 days (as of 30 Sep 2021), NEAR recorded between 254,048 TPD and 351,993 TPD, averaging 303,020 TPD. This translates to approximately 3.50 TPS.</p>



<h3>Staking NEAR</h3>



<p>Staking NEAR is fairly easy and can bring in an APR in excess of 10%. We&#8217;ve got a detailed set of FAQ&#8217;s on staking NEAR, <a href="https://www.stakingrewards.com/earn/near-protocol/" target="_blank" rel="noreferrer noopener">accessible here</a>.</p>



<figure class="wp-block-image"><img src="https://lh3.googleusercontent.com/62Hm-6TJFkx-J7vBbIj7aG07HYfnbhFj5e3mzW2VVOdb6GuJKvR4STzqAQCgya3xyQAXXFxRWT-llpsc4Yvs_9V4PpkTeWAvQ1EfU2BQByBJh4lSdvznjH5uC6JQeygfuw" alt=""/></figure>



<h2><strong>Summary</strong></h2>



<p>Clearly the competition to dethrone Ethereum is stiff, as the chart below summarizes. Projects like BSC, Solana have already surpassed Ethereum when it comes to scalability. What&#8217;s more, however, is that this race to the top is bound to get heated up in the coming months and years. Many of the challengers have major upgrades planned which take on ETH 2.0 head-on. What&#8217;s clear is there&#8217;s little room for complacency as each blockchain vies for the top-spot.&nbsp;</p>



<p><img loading="lazy" src="https://lh5.googleusercontent.com/RfSV9qnBL3gpLP3eQKWpxGk7XPbd4ggMDPDeHizHlc2U_A4KlY8bbqjp4ig1vb-feMW4kqwL5w4BMi_6n3ricStF9oK16pKoa75r5_29Y2q0XqeKcgES3AsM2lG3o0JJ7g" width="602" height="257"><br><br>This competition, though, goes a lot more beyond scalability. In Part II of this post, we will delve deeper into these projects, evaluating factors including ease of usability and developer interest, level of decentralization, governance framework, security setup, features and more. Could one of these projects have the ideal mix to dethrone Ethereum and claim the coveted spot?</p>


Ethereum and the 7 Challengers – Part 1: Does ETH 2.0 ward them off?


<h2>Why Crypto Beats TradFi Options Like Stocks &amp; Real Estate</h2>



<p>You already know if you are reading this that crypto crushes bank rates for earning income. But there are other good ‘traditional’ investments out there. Investments like:</p>



<ul><li>Interest rates in emerging markets</li><li>Dividend-paying stocks</li><li>Buy to let properties (real estate for investment)</li><li>Peer to peer lending</li></ul>



<p>And how do they stack up against crypto? Let’s take a look…..</p>



<h2>Interest Rates in Emerging Markets</h2>



<p>There’s no question that in some emerging markets, your bank account will see high-interest rates. Argentina citizens can get a <a href="https://www.statista.com/statistics/454492/interest-rates-on-fixed-1-year-deposits-by-country/" target="_blank" rel="noreferrer noopener">one-year fixed deposit account that pays up to 34%</a>. That’s huge for a bank. So if you can qualify to open a bank account there, should you?</p>



<p>Probably not for two reasons:</p>



<ol><li>Inflation</li><li>Currency devaluations</li></ol>



<p>Argentina was considered a possible case of hyperinflation until just recently by the <a href="https://www.batimes.com.ar/news/economy/world-bank-economist-rules-out-risk-of-hyperinflation-in-argentina.phtml" target="_blank" rel="noreferrer noopener">World Bank</a>. Their current inflation rate is more than 50% year over year meaning you lose purchasing power even at 34%.&nbsp;</p>



<p>And then we have the second problem, that you are paid in ARS (Argentina Pesos). The ARS consistently loses its value faster than most other currencies. So your declining purchasing power after a year also gets you fewer dollars, Euros, Pounds, or Bitcoin.</p>



<p>Unless you have assets or expenses in an emerging market currency, it’s probably not a good idea to chase yield there.</p>



<h2>Dividend-Paying Stocks</h2>



<figure class="wp-block-image"><img src="https://lh5.googleusercontent.com/Uu4BjcM2jOHfjDKnR-EPLyYcKAQbvRrb6ANIaQmCvKkhjyR0UMyccJH7eaQt2bO3kRzrl6YApzyOfk76CblrosK4kEZlLGtsokjbbHN9iys2-VsiulaLDFOQUAudB0Yk2DPX-xTM=s1600" alt=""/></figure>



<p>As we discussed in our article on <a href="https://www.stakingrewards.com/journal/retire-on-passive-income-with-staking/" target="_blank" rel="noreferrer noopener">Passive Income with Staking</a>, you can earn between 4.5%-7% on U.S. dividend stocks and 6%-10% on some UK dividend stocks. As we stated in that article, the risks you run are:</p>



<ol><li>your principal losing value and&nbsp;</li><li>the deception that a high dividend yield could come from a declining stock price and not from a higher payout.&nbsp;</li></ol>



<p>A higher dividend yield might not get you to whatever your income goal is if the reason the yield is 8% is that the stock dropped in value by 10%. It means your payout stays the same or even drops from the previous quarterly payout. Also, if you aren’t a citizen of these countries, you may not be eligible for an account that lets you buy these stocks.</p>



<h2>Buy to Let Properties</h2>



<figure class="wp-block-image"><img src="https://lh4.googleusercontent.com/yWa1aCSb4ecDoYcrWDXUHf92WWNhNkIxmdJN6aW4Az5ioxYpt7kcfut7ylQIkYuBtj0d_ROe3LmOEXOIyWU1MiGR4pDf75BMIKKpzvQPUbt28xjDYQOJIbv3kW_TvMUMPwBdwgS1=s1600" alt=""/></figure>



<p>Buying real estate to rent it out as an investment is a common traditional investment strategy. <a href="https://www.douglasallen.co.uk/landlord-guides/what-is-a-good-rental-yield/" target="_blank" rel="noreferrer noopener">Numerous companies</a> in this field say that a net yield of 5-8% is a successful investment.</p>



<p>The problem here, aside from the fact we can earn more with low risk in crypto is that real estate is expensive and illiquid. It costs a lot and takes lots of time to sell it if you are unhappy with your investment performance. You are often taking on debt to help finance this purchase. It’s not well-diversified as all your money is tied up in one expensive property at a time.</p>



<h2>Peer to Peer Lending</h2>



<figure class="wp-block-image"><img src="https://lh5.googleusercontent.com/99vLXkVwfYuIeLfbr2pX4pIDVc00Vnu-mIbFlN6pIAdHNlOgSU54aweyH63kNtoFfhAQpUWNR1x0DSKEiZcZ-LHw1sjZd82wIWScBVP0Bo5VRcaZMrQlY9VMFfm_gj14HXUmG6cL=s1600" alt=""/></figure>



<p><em>Picture from <a href="https://www.debt.org/credit/solutions/peer-lending/" target="_blank" rel="noreferrer noopener">Debt.org</a></em></p>



<p>This was my absolute favorite option before discovering cryptocurrency. You often get to choose who you want to lend to. You decide how much risk you want to take by lending to a C credit instead of an A credit or by lending individuals instead of lending to a business. And you have many platforms and risk profiles to choose from. The returns on individual loans are often over 10% too.</p>



<p>However, these loans have no collateral. Defaults can be common especially during difficult economic times. There are no decentralized lending options for p2p lending if done in fiat currencies like USD, EUR, or GBP. An American can’t lend EUR on Mintos and a German can’t lend USD on Prosper either. Both your principal and the potential interest you can earn are at risk. It does not take many defaults to bring your total portfolio return down into normal or sub-optimal territory.</p>



<h2>Staking with Cryptocurrency</h2>



<p>While staking is probably the lowest risk crypto investment, lending of some cryptos such as stablecoins offers lower risks too. Here are some other benefits staking offers:</p>



<ol><li>Anyone can ‘qualify’</li><li>Payments in crypto</li><li>Liquid all the time unless staking has a short lockup period</li><li>Can start small and easy to diversify amongst many cryptos</li></ol>



<p>Anyone from anywhere can qualify as long as they have crypto in a digital wallet. No residency is required like for stock dividends or p2p lending options.</p>



<p>Payments are in crypto which many believe to be a higher quality form of money than most, if not all, fiat currencies. And they are easily converted back into your home currency or another crypto of your choice if you prefer. Far fewer devaluation concerns than emerging market currencies.</p>



<p>Unless you must lock up your crypto for 30 days or 60 days, your entire investment is liquid all the time. You can unstake and sell for another crypto if you are unhappy with the performance, unlike with bank fixed accounts or real estate.</p>



<p>You can start small. No huge commitments like real estate or dividends. If you want to take 1000 EUR and spread 100 evenly over 10 different cryptos, then you can do that. That plus the liquidity features mean you can work to improve the performance of your underlying assets. And you can easily diversify. Try doing that with a piece of property.</p>


Why Traditional Finance Cannot Compete with Crypto


<p>Staking Rewards is proud to announce the release of the extensive Staking Rewards’ 2021 Staking Ecosystem Report which is available for download for free below. </p>



<div class="wp-block-file"><object class="wp-block-file__embed" data="https://cms.stakingrewards.com/wp-content/uploads/2021/10/2021-Staking-Ecosystem-Report-1.pdf" type="application/pdf" style="width:100%;height:600px" aria-label="Embed of 2021-Staking-Ecosystem-Report-1."></object><a href="https://cms.stakingrewards.com/wp-content/uploads/2021/10/2021-Staking-Ecosystem-Report-1.pdf">2021-Staking-Ecosystem-Report-1</a><a href="https://cms.stakingrewards.com/wp-content/uploads/2021/10/2021-Staking-Ecosystem-Report-1.pdf" class="wp-block-file__button" download>Download</a></div>



<hr class="wp-block-separator"/>



<p>We are examining the Proof of Stake industry at large and providing a holistic view on the current State of Staking as well as challenges ahead.</p>



<p>The report features unique data from the Proof of Stake Industry, cutting-edge insights from industry thought leaders, analyzed staking habits from over 200 investors.</p>



<p> Enjoy some weekend reading on us!</p>



<hr class="wp-block-separator"/>



<h2><strong>The Proof of Stake Industry Has Grown by 1,550% Over the Past Year&nbsp;</strong></h2>



<p>At the time of writing, the Proof of Stake (PoS) market cap is sitting at $326.775B, which is up from $21.117B just one year ago. An increase of 1,550%! Meanwhile, the overall crypto market is “only” up by 673% ($338B in October 2020, and $2,278B in October 2021). PoS has been the place to be in 2021 and will continue to be for the foreseeable. Below shows us the explosive growth over the past two years!</p>



<figure class="wp-block-image"><img src="https://lh3.googleusercontent.com/bDL6SQjdNgkoXoj5SSaMZkLoe-AO-TpsX04d0146b6Abxy_vjyt3PvH4ylJiEwVYoV0A6lJcgaxRxVXNqaDpgUrMhGO8Mv9TSuxUIakzktZhJV5Jg5zfiqITH9yRoop3go4qGf9f=s0" alt=""/></figure>



<p>And as expected, Proof of Stake is becoming the go-to consensus algorithm in the Web3 world for investors, retail and institutional, utilizing their digital assets via staking to create a passive income stream and to hedge against inflation. It is clear that builders are opting to go with PoS also for a whole suite of advantages. The PoS vs PoW dominance rate has more than doubled in the past two years and that is not even accounting for Ethereum. The proof is in the data and the FOMO is real👇👀</p>



<figure class="wp-block-image"><img src="https://lh3.googleusercontent.com/Wql7YKMbmVuDV2yqyk9i0Wx2kIw0mTuDBwDgv6NwFlWHXu7V-Ab7A1LpxGz3w1fMcoPD5ATxE_IR0PnNMmnMbdW9IJGK_cSJbLTUOcwoFs0megafQhxWdVA5esoiaKgJoSOxf7cO=s0" alt=""/></figure>



<p>While drafting this report, we simultaneously surveyed over 200+ Staking Rewards users to understand their habits, insights, and thoughts on the current state of the ecosystem. We questioned them on various topics and areas and the insights are fascinating! A must-read for any validator, investor, or Proof of Stake fanatic.&nbsp;</p>



<figure class="wp-block-image"><img src="https://lh4.googleusercontent.com/wRXOfgrTZqF5jsGwfiDx6tVzB_2POpZTFdWYRCFiDq6vwA3sI9oFTeWiuAcKZIPBRPYvDjP7AvujTTS11c4mpv0X4Swqd11rG0vieaVHZovJ9p0_Y-Nq2FomMCzA49DRX1yvZLHA=s0" alt=""/></figure>



<h2><strong>Cutting Edge Insights</strong></h2>



<p>To add to this, we have asked the leaders of the industry to answer specific questions on specific topics throughout the report. See an example below on the kind of insights we have collated from some of the best minds in Proof of Stake.&nbsp;</p>



<p><em>Do you see staking yields competing with DeFi yields? What are the implications of this on network security? How to balance these?</em></p>



<p><strong><em>Felix Lutsch from Chorus One</em></strong>:</p>



<p><em>“I do not see a direct competition here. At the current stage, staking and DeFi attract somewhat different user profiles. I do believe that there will be more and more financial products that help bridge the two worlds and allow users flexibility in how they want to deploy their capital. Tokenizing staking positions appear to be a core building block for this to happen. It is likely that staking will be the backbone of a lot of decentralized finance products in the medium run. I’m excited about further innovation in the liquid staking realm. Examples include two token models where the rewards are separated from the principal or the superfluid staking model introduced by Osmosis (a Cosmos DEX), in which liquidity provider (LP) tokens involving the native OSMO tokens can be staked to generate staking rewards on top of LP rewards (as opposed to deploying a tokenized staking position in a pool).”</em></p>



<hr class="wp-block-separator"/>



<h2><strong>The 2021 Staking Summit by Staking Rewards</strong></h2>



<p>To mark the report, we will also be hosting an online event on October 20th with some key speakers who participated in the report. To attend the free, online event, join us here at 2 pm Lisbon/UK time &#8211; <a href="https://www.crowdcast.io/e/stakingsummit2021">The 2021 Staking Summit by Staking Rewards</a>.</p>



<hr class="wp-block-separator"/>



<h2><strong>About the Report</strong></h2>



<p>The 2021 Staking Ecosystem Report has been a work in progress for the past number of months by the Staking Rewards team and comes at a time when the Proof of Stake industry as a whole has been experiencing exponential growth. Retail and institutional investors alike have been flocking to the scene in an attempt to earn passive income with their digital assets as well as getting involved with various areas of the underlying protocols such as governance and validating.&nbsp;</p>



<p>In this report, we have collated the thoughts, insights, and opinions of 19 diverse Staking industry thought-leaders and over 200+ Staking Rewards’ users/digital asset investors to get an in-depth view on the world of Proof of Stake as it is and where it will be in the not too distant future. We explore 10 key Staking-related topics such as Validator Business, Regulation and Taxation, Industry Challenges, and invite you to dive deep into the mindsets of the leaders behind your favorite companies in the space!</p>



<p>We have interviewed representatives of the following entities and would like to give them a huge thanks from all at Staking Rewards for taking the time to participate and make this report a reality.</p>



<figure class="wp-block-image size-full"><img loading="lazy" width="1648" height="1113" src="https://cms.stakingrewards.com/wp-content/uploads/2021/10/image-3.jpg" alt="" class="wp-image-5469" srcset="https://cms.stakingrewards.com/wp-content/uploads/2021/10/image-3.jpg 1648w, https://cms.stakingrewards.com/wp-content/uploads/2021/10/image-3-360x243.jpg 360w, https://cms.stakingrewards.com/wp-content/uploads/2021/10/image-3-80x54.jpg 80w, https://cms.stakingrewards.com/wp-content/uploads/2021/10/image-3-768x519.jpg 768w, https://cms.stakingrewards.com/wp-content/uploads/2021/10/image-3-1536x1037.jpg 1536w" sizes="(max-width: 1648px) 100vw, 1648px" /></figure>



<p>The industry is very much emerging out of its Exploration phase and is well on the path to Realization. We are excited to see where the journey as a whole will take us but one thing is certain, Staking Rewards will be at the forefront of the industry, providing the highest quality of objective research and data on the whole ecosystem.</p>



<p>The report was sponsored by StaFi protocol who is unlocking the liquidity of staked assets on chains like Ethereum, Polkadot, and more.</p>


2021 Staking Ecosystem Report

Solana Deep Dive Part 2: A Guide to Navigating a Booming Ecosystem


<p>Compounding! What is it? Isn’t it just a myth?&nbsp;Is it for me?</p>



<p>Compounding is a word many of us have heard before, maybe even read about, or played around with. But how many of us truly understand the power of compounding when done right; and how few of us really incorporate it into our decision making and have it ingrained into our DNA.</p>



<p>Albert Einstein supposedly once said ‘Compound Interest is the Eighth Wonder of the World. He who understands it, earns it … He who doesn’t .. pays it.’ Whether he did say it or not, doesn’t matter, because the message still stands.</p>



<figure class="wp-block-image"><img src="https://lh6.googleusercontent.com/xthNvuBBoA-t9rr03bG-w-bhemSBipuSLEgEdrJWeG_R9MF7WB006d1fkcTnESSK02v7XecR2dJp2lbw0VPySL48MKBW1cnPreY8xUT-IAna0DS7efHvKzxW5fI_o4owqBVbgq6o=s0" alt=""/></figure>



<h2>Gut Feeling Test</h2>



<p>I would like to offer you 2 investment types, and you only have 1 second to answer; which would you choose:</p>



<ol><li>You invest $100, and after 1 year I pay you $1 interest per day on the $100</li><li>You invest $100 and every day I owe you 0.5% interest daily. I will only pay you at the end of the 365 days.</li></ol>



<p>Simple, some might say. 0.5% of $100 is only 50 cents, so why would I take 50 cents when I can have $1.</p>



<p>If I were to give you 0.5% every day, meaning that I only ever owe you $100 at any given point, the total interest would only be $182.5 over the whole year. However, as I mentioned I would pay you back only at the end of the 365 days, the amount of money I owe you, would increase over time.</p>



<p>Let’s have a look:</p>



<figure class="wp-block-table"><table><tbody><tr><td>Beginning of Day</td><td>$ Amount I Owe you</td><td>0.5% of Amount I owe you</td></tr><tr><td>1</td><td>$100.0000</td><td>$0.5000</td></tr><tr><td>2</td><td>$100.5000</td><td>$0.5025</td></tr><tr><td>3</td><td>$101.0025</td><td>$0.5050</td></tr><tr><td>4</td><td>$101.5075</td><td>$0.5075</td></tr><tr><td>5</td><td>$102.0151</td><td>$0.5101</td></tr><tr><td>10</td><td>$104.5911</td><td>$0.5230</td></tr><tr><td>100</td><td>$163.8476</td><td>$0.8192</td></tr><tr><td>200</td><td>$269.8027</td><td>$1.3490</td></tr><tr><td>365</td><td>$614.3933</td><td>$3.0720</td></tr></tbody></table></figure>



<p>As you can see, the daily interest that gets added to what I already owe you, increases daily. So whilst it starts off slow, with only receiving $0.50 interest on the first day, you can see that by the end of the 365 days, you are receiving $3.072 interest.&nbsp;</p>



<p>In the below graphs, you can see a visual representation of the total value of your investment with scenario 1 vs scenario 2, as well as the daily interest paid.&nbsp;</p>



<figure class="wp-block-image"><img src="https://lh6.googleusercontent.com/usumPHXoc1Z54t4Nx-2eZF4LgAjGUC82VgEAYklUuwsyiYHQH_QeefIxxh6em7uhpRJFsOmZvCjD_FKYoCTbqhu0TUVp47yA5hFBPls4QO4MfoxPlKqigLtpK9B89RLmF5ZQaWlZ=s0" alt=""/></figure>



<p>Total Value of Investment over 365 days</p>



<figure class="wp-block-image"><img src="https://lh3.googleusercontent.com/1JCs-QrcCRQSOwB7YtLoAr6rWdXTbiSzeRSP1fIuk6QmNOy1NWF0rNjmxcykqKvLLwpI8a6SIjRjuhtlQuXrZP2Ol-KEAeqvNvzFRQRaewUCvbYjxc6SLqrmR5NBwigJRG0p21f2=s0" alt=""/></figure>



<p>Daily Interest Accrued over 365 days</p>



<p>Okay, so now that I have your attention, I will go a bit more into how compounding works, and how you can make compounding work for you and your goal; whether that’s early retirement or a shiny new lambo.&nbsp;</p>



<h2>The 3 Forces that affect compounded returns</h2>



<h2><img loading="lazy" src="https://lh6.googleusercontent.com/X4LPo9P3SGLX1Z-7yW1DFCZ-fu6AqUxwStyUKMKNHVQ03JdVTPUC2uDIsxTGeYQcBRW37HvekwOD3yr0N5u1Hd7pyh4STdVNrdEgAKLetZuEl48U9AaypsjKDd1SunqPepZAETad=s0" width="624" height="323"></h2>



<h3>Time</h3>



<p>As we have seen in the table and graphs above, the longer you compound your interest for, the greater the power of compounding.&nbsp;</p>



<p><strong>S&amp;P 500</strong></p>



<ul><li>On the 12th August 1982, the S&amp;P500 index closed at 102.42.</li><li>39 years later on the 12th August 2021, the index closed at 4460.83</li><li>This is a return of 4355.42%&nbsp;</li><li>Sounds like a lot in 39 years; but this only equates to roughly 10% a year. Or roughly 0.026% a day.</li></ul>



<p><strong>Bitcoin</strong></p>



<ul><li>Just over 8 years ago, on the 5th of July 2013, a single Bitcoin would have only cost you $68.43.</li><li>At the time of this writing; you would have to pay just over $43,000.</li><li>In roughly 3009 days; Bitcoin went up 62,800% (CRAAAZYYYY)</li><li>This equates to around 220% per year, or a measly 0.21% a day.&nbsp;</li></ul>



<h3>Compounding Return Rate</h3>



<p>Obviously, the rate of return you get on your investment, will make a big difference for your end result. And the higher the rate of return, the higher the effect of compounding.</p>



<p>Let’s compare 2 hypothetical scenarios:</p>



<p>Trader 1:</p>



<ul><li>Makes 0.1% return a day. Reinvests all of his returns&nbsp;</li><li>A $100 investment, over 365 days, would yield a profit of $44.025; i.e. 44.025%</li></ul>



<p>Trader 2:</p>



<ul><li>Makes 0.3% return a day. Reinvests all of his returns</li><li>The same $100 amount invested in Trader 2 instead of Trader 1, would generate a 44% return already after 122 days. After 365 days, your return would be $1,984, a whooping 198.4%.&nbsp;</li></ul>



<p>As you can see, a higher rate of return per day, translates into a much higher return after 365 days. Whilst the daily return of Trader 2 is only 3 times as high as Trader 1, the return after 1 year, is 4.5 times as high as Trader 1.</p>



<h3>Withdrawals</h3>



<p>All of us have certain expenses we need to make, whether that’s rent, taxes or buying new wheels for our 1 month old Lambo (surprisingly they are quite affordable, at ONLY $2000 for a set of four tyres). So it would be unfair of us to discuss compounded interest, without assuming that investors would have to withdraw some money every now and then.</p>



<p>Again, let’s assume 2 hypothetical situations. Based on our above scenarios, we believe that Trader 2 is the better investment, and we come up with the following strategies:</p>



<p>No Withdrawals:</p>



<ul><li>Trader 2 makes us 0.3% a day. Reinvests all of his returns.</li><li>After 1 year of compounding these daily returns, our $1,000 investment is worth $2,984</li></ul>



<p>We withdraw $1 a day to pay for a cup of black coffee:</p>



<ul><li>Every day, we make the same 0.3% as above, but we withdraw $1 for our coffee.</li><li>At the end of the year you’d have $2,322. So whilst you’ve only spent $365 total on the daily coffee; you are actually $661 worse off.</li><li>The below graph shows the difference between withdrawing and not withdrawing</li></ul>



<figure class="wp-block-image"><img src="https://lh5.googleusercontent.com/WGQ3bMNLKxuhjEnkWHKFqE-bBDcZOTQ3EBM8QbBB-dDgwzYg1U5opS8itjz7sFgeCppyqCBS-kefBStR-X9c02bf4mjJU1z2t5axGhmmDUUuD_DX8IOBXHXuv4iJZVJ5zVueuQRc=s0" alt=""/></figure>



<p>Maybe Boomers are right when they tell us to stop drinking coffee so we can afford to buy a house.</p>



<h2>Life Lessons&nbsp;</h2>



<p>So, now that we hopefully have a better understanding of compounded interests, I would like to give a few examples of how we can use it in our everyday life, from personal growth to your investment decisions.</p>



<h3>Long Term Investment</h3>



<p>We all dream of early retirement, or at least of more financial stability. And wouldn’t it be nice if we just knew which NFT or asset would be the next 1000x? Unfortunately, for most of us, this is a dream that will not come true. For every 1000x opportunity, there are countless more that burn up and make us lose money rather than make.&nbsp;</p>



<p>It might seem like every day we see someone posting on social media; how they bought that new Tesla or Lambo with their Dogecoin winnings, or from buying and selling silly JPEGs; but if you are wanting a more guaranteed win, slow and steady wins the race.&nbsp;</p>



<figure class="wp-block-image"><img src="https://lh5.googleusercontent.com/jn4CwvW4BOG6zUaJOODka0jPL-xV3kvecUFDmtwnB0OqrYuUflAbjxTexu5hb7YTqY3DQsmSyaEr3JSLdJPEUA7gvvNFLSiMtCorMSv5XEyFMb34gwENlE0XxJABhJk5x5-Ik3v-=s0" alt=""/></figure>



<p>Probably one of the most famous investors to date is Warren Buffett; with a net worth of 100 billion, we’re probably assuming he’s had some magic help and he’s definitely had to have gotten lucky with a lot of 100x or 1000x opportunities, right? What if I told you, that Berkshire Hathaway’s (Buffett’s Investment Firm) best year in the last 20 years was a measly 33% return on investment? And his worst; -17%. His personal net worth also rarely had a massive jump year on year, and as you can see from the graphic below, it was a slow, but steady uptrend.&nbsp;</p>



<p>It’s often quoted that his average annual return was just 20% (compared to 10.2% for the SP500).<br>Over 50 years, a 20% return would yield a return of just above 9000x, whilst a 10.2% return would only generate a 130x over the same 50 years.&nbsp;</p>



<figure class="wp-block-image"><img src="https://lh4.googleusercontent.com/IztkqZ9N1yLLlXGp8f1sTfxjsAirbq1FCTxO6P17g5MMG60kLO1gtHTTwXrMFouyUTsDsLbRuJN6eOVc73BkXWdPBovTEN_0QIKXRtb3-lH7j5ra8wcxs8HTtGcyOQQujfkM00p4=s0" alt=""/></figure>



<p><strong>Lesson</strong> &#8211; Getting rich quick is possible, especially in Crypto; but it’s more luck than skill. True skill is playing the long game, and aiming for a sensible rate of return year on year; over many years.&nbsp;</p>



<h3>The Loss of Not Staking</h3>



<p>Most people that will read this article, have at some point in time checked out <a href="http://stakingrewards.com" target="_blank" rel="noreferrer noopener">StakingRewards</a>; so staking is not a foreign concept. Every now and then, when I go to crypto MeetUps; I am perplexed at the lack of stakers in the community. And when I inquire as to why they are not staking, rarely is the answer lack of knowledge, or lack of information. </p>



<p>Most of the time Crypto Investors/Traders tell me that the small annual reward is dwarfed by the huge increase in their general crypto portfolio, especially when one considers the effort required to stake &#8211; sure, 15% a year compared to a 10x increase in underlying asset price is not much, but it adds up. 10x a year is not feasible for more than a few years. In 2020 the world GDP was just shy of 85 trillion USD. Just a single $1 invested, would grow to more than the world wide GDP in under 14 years if the investment would grow at 10x a year. (1 * 10^14 = 100 Trillion)</p>



<p>Let us assume that you will, however, find an investment that over the next 10 years does a 1000x; and a measly 15% return a year doesn’t seem worth the effort for you. You put in $1,000 which after 10 years, is now worth $1,000,000. Great! Awesome! You’re a millionaire.</p>



<p>Now imagine, you had staked this asset for the whole duration; and on average receiving 15% a year; what would be the total worth of your $1,000 after 10 years?</p>



<p>$1,000 * 1000 * 1.15^10 (~4) = roughly $4,000,000</p>



<p>So, even though your staking is only generating 15% a year, at the end of the 10 years you now have 4 million dollars instead of just the 1 million.&nbsp;</p>



<p>So, by not staking, you just lost out on $3 million dollars worth of extra income.&nbsp;</p>



<figure class="wp-block-image"><img src="https://lh5.googleusercontent.com/joXQdLrQyeC_PpNn__X2BQQ9zUL78f4eGrQ2Mt45lpxyopY3sgXeljqMXSGkkUKAiPzu3goIf9frfGpMjiGtZO456i9wfDIpIktj0mCEsEO67vMgAEUi49DlhuhsBdOQSHy8NQiG=s0" alt=""/></figure>



<h3>Personal Growth</h3>



<p>I’m sure you have heard people say this before, but just a 1% increase in personal growth, happiness, etc would mean an increase of 37x after just 1 year. If you are not happy with your salary, or your activity level, or anything else in life; it is easy to want to make drastic changes quickly to improve asap; but usually this backfires, same as with your investments.&nbsp;</p>



<p>Similarly, just a 1% worsening of any element of your life per day, would mean that after just 1 year, you are 97.5% worse off than at the beginning.&nbsp;</p>



<p>I like to call this the rule of 1%. Small changes, steadily over time will have a greater effect on your education, your finances and any other aspect of your life than trying to make big, drastic changes once and trying to stick to them.&nbsp;</p>



<h2>Compounding – Conclusion</h2>



<p>The best way in my opinion to approach compounded interest is to set yourself a goal with a time limit. For example, if you want to retire in 25 years at the age of 50 with a Net Worth of $5 Million, and are aiming to add $1,000 to your investment account every month; what annual return do you need to make this a reality.&nbsp;</p>



<p>We start with $0 on our account at the moment. We assume that every month we add $1,000 into our account for 25 years (300 months). This brings your total investment amount to $300,000.&nbsp;</p>



<p>In this case, you would need to average a 18.7% annualized return on your investment, to bring the Total Value of your Investment to $5,000,000. (potential tool idea?)</p>



<p>So, whilst small daily improvements and interest might seem trivial and too small to matter; when you look at your long term goals you start seeing that in fact these small things are what makes the difference.</p>



<p>If you would like to discuss any of these topics in more detail, check out our <a href="https://www.stakingrewards.com/discord/" target="_blank" rel="noreferrer noopener">Discord</a> or <a href="https://www.stakingrewards.com/telegram/" target="_blank" rel="noreferrer noopener">Telegram</a> chats and we’d love to hear from you.</p>


The Mythical Beast that is Compounding


<p>In the crypto space, centralized exchanges often serve one purpose, to allow users to buy, sell and exchange their cryptocurrency. Exchanges often have few services for users looking to store their cryptocurrency on the exchange. Cryptocurrency exchange Gemini aims to change this narrative. In early February of 2021, Gemini launched their feature called “Gemini Earn”. This service allows users to buy and hold their cryptocurrency on &#8220;Earn&#8221; and earn compounding interest. <a href="https://www.stakingrewards.com/savings/gemini/" target="_blank" rel="noreferrer noopener">Gemini Earn</a> is an extremely unique service and its seamless integration with its centralized exchange makes it extremely attractive to users who want to earn interest on their cryptocurrency without too much effort. Gemini Earn’s rates are competitive with current marketplace expectations. And you incur no fees when transferring your crypto in and out of their Earn platform.</p>



<h2>Lending</h2>



<p>In the world of crypto, users can earn their crypto in two main ways. Lending out their crypto or staking their crypto on a network. Through third-party providers such as Gemini Earn, you use them as a third party to stake or lend out your cryptocurrency for you. Rather than paying them outright to do this, they change their rates accordingly and take a cut of the rewards they get. </p>



<p>As a general rule, the easier it is to earn interest on your crypto, the lower the rates will be, as the provider makes the process extremely easy, saving you time in the process. As far as ease of interest on your crypto, Gemini Earn is one of the best services with its seamless integration with its Basic and ActiveTrader™ platforms. This seamless integration makes Gemini Earn one of the best ways for beginners to earn interest in their cryptocurrency, while also maintaining competitive rates on cryptocurrency.</p>



<h2>More about Gemini</h2>



<p>Gemini is one of the largest cryptocurrency exchanges and custodians in the world with over <a href="https://www.gemini.com/blog/gemini-crypto-under-custody" target="_blank" rel="noreferrer noopener">$30 billion in crypto under custody</a>. Gemini was founded by two large players in the cryptocurrency game, brothers, Tyler Winklevoss and Cameron Winklevoss. With the launch of Gemini Earn, Gemini continues to prove its huge status in the cryptocurrency space, with services ranging from earning capabilities, pro trading tools, and custodial services. Gemini continues to prove why it is one of the largest cryptocurrency service providers on Earth.</p>



<p>Gemini is based in a US state notorious for its strict regulation of cryptocurrency companies, this state being New York. Despite this, Gemini has been able to release a wide range of services to its customers, including offering many cryptocurrencies, trading pairs, and a wide range of services to its customers and clients. Gemini’s wide range of services makes it extremely convenient for cryptocurrency traders and HODLers. Gemini is available in over 60 nations, the complete list can be found <a href="https://www.gemini.com/areas-of-availability" target="_blank" rel="noreferrer noopener">here</a>.</p>



<p>Tyler Winklevoss <a href="https://markets.businessinsider.com/news/currencies/winklevoss-twins-bitcoin-trade-of-the-century-predict-30x-gain-2020-12" target="_blank" rel="noreferrer noopener">famously said</a>: “I do not know who said compound interest is the eighth wonder of the world. Albert Einstein or Warren Buffett, maybe it was Gandhi, I do not know&#8221;.</p>



<p>It is no wonder that Gemini was started Gemini Earn to provide its users with compounding interest.</p>



<h2>Gemini Earn Rates</h2>



<p>Gemini Earn provides users the ability to seamlessly send their crypto to earn interest. Without the need to input external wallet addresses, this convenience is unmatched by similar exchanges such as Coinbase. While Coinbase does offer its users to earn interest on some cryptocurrencies, the list of supported cryptocurrencies is substantially shorter than the list of supported cryptocurrencies on Gemini. Gemini’s list of supported cryptocurrencies is extensive and they add new cryptocurrencies often. Users should be aware that rates may change at any time. If you wish to calculate potential earnings, you may do so <a href="https://www.gemini.com/earn" target="_blank" rel="noreferrer noopener">here</a>. Here are the rates as of 10th September 2021.</p>



<figure class="wp-block-image"><img src="https://lh6.googleusercontent.com/vD3W55qsZJIOo4weUeCdjuxULwm0SM4wA_iuiVakFiejNN8CyqufRX1Ws3MH4bC1ezeMaZGE8Gh1MC4O0oHp3i2CvSylfkqQOg1AXtXKj7kS6K9XUq7QwtkkJafiJskpWw=s0" alt="Gemini Earn Rates"/></figure>



<p>Gemini Earn’s seamless integration makes depositing and withdrawing cryptocurrencies extremely easy into the platform. When buying cryptocurrencies, Gemini gives users the ability to immediately deposit cryptocurrency into Earn upon purchase.</p>



<p>This long list of cryptocurrencies compares to Coinbase’s measly 6 cryptocurrencies supported to earn interest. At this time, Gemini does not offer additional interest for those who lock up their crypto for extended periods of time.&nbsp;</p>



<figure class="wp-block-image"><img src="https://lh6.googleusercontent.com/rq2HvAx2XiZgmk6suITs8eITblL-3k-_SmWeFX9VYvwfKlx2f0YtB8Wbku9-6h0J8kfRfvn_7b0YJ-ZLpNDze2k6yZ4wdftOvBJXZ2lv4wulFtot3uqeUYB5jEI4UJSQcA=s0" alt="Trade"/></figure>



<h2>How to earn</h2>



<p>Users who aren’t interested in transferring to Earn immediately, are able to add crypto into Earn after they have purchased or deposit cryptocurrency into Earn. Once you are ready to deposit crypto into Earn, you will receive this notice. </p>



<figure class="wp-block-image"><img src="https://lh3.googleusercontent.com/5VzHriU8JX8NmY5FV8-KhgfTb-FTmeUTZG-SBbjI7nxhAGYEpsgRIcdQPNQM5KhLsZNscYzJkyG_vnnkN_JjsH5PrGbneVyaK95yinsUBLGIPaqe0q74jmAAGSI9GZjpig=s0" alt=""/></figure>



<p>Click on “Continue”.</p>



<figure class="wp-block-image"><img src="https://lh4.googleusercontent.com/Wa9VnBkBsQA8wwJGXNapbl5YRXHl0Blgpn9R8fmYqDV6IaBI9SYvtiu-isWVjqNqcuBfRzgQaogJ8HNndLCl9tl5yuhFbbTMyYSoKMi8qRR5j2VKEJwWP6bDJMehnPKK6w=s0" alt=""/></figure>



<p>Click on “Confirm”.</p>



<figure class="wp-block-image"><img src="https://lh3.googleusercontent.com/8QmHL-Wdl8z4tjynoRVtKNCgRfzSYiBI_sF5P1_vA_ZmGhm_LvDNK7BenGHBUsGtwH4wJGJxAbwdG6VkwCK6PQbPWgh_KW3FGWx1Xoqs7OhhTLZHDajfiFaTJ_P9Dv145w=s0" alt="Gemini Earn"/></figure>



<h2>How to withdraw</h2>



<p>If you are looking to withdraw crypto from Earn, you should go to the Earn section. Then click “redeem” on crypto you would like to withdraw from earn and into your trading balance. Please note: you will be unable to trade or exchange your cryptocurrency while it is earning interest in Earn.&nbsp;</p>



<p><img src="https://lh4.googleusercontent.com/iZqCpfiU_XDlTEDUqQB7EoGJ1XcVq-hdZi4a19b0tilTE8ZHUEbAXk4EYxXlMHjVe4zflSI6T1zONEZrKQ4mK2ZouKZf4g2YYZgWhUIiRcyCVLJBf5jXYG9xkR7tFWs4vg=s0" style="width: px;"></p>



<p>Click on “Continue”.<br><img src="https://lh4.googleusercontent.com/PUDORCwEBzXcALukJRuLKanCpxNy7co7snzH7mREfCrDhnwTM-IEPPZuD5yUcaSI7686T4NQxyTt6H2fKV1_EB9ApPJa-bWXURq9r1zMJU7Juuth4tfcoKo4AZZ0-oHrNg=s0" style="width: undefinedpx;"></p>



<p>Click on “Confirm”.</p>



<figure class="wp-block-image"><img src="https://lh3.googleusercontent.com/qM1V7LFUgfRvZl2cF_Ow1RAGDqs5pDE2G6WEcHeUlcceSmpNUueGfV79j2XhX1NZbUVp7Z-NOZT8D1VUSv9F5gRR3Ytirxh6uoqdF9XLNMfWxPTwpEpMKndsXnhWq7ZvQg=s0" alt="Gemini Earn Withdraw"/></figure>



<p><em>A few days after you redeem your cryptocurrency, your crypto will be available in your trading account.</em></p>



<h2>Security</h2>



<p>Gemini has extensive security to ensure user’s funds are secure at all times. Gemini requires users to use Authy to provide 2FA on all accounts. Users are also required to complete KYC and submit ID information to create an account. Additionally, Gemini also allows users to whitelist crypto wallets for ease of transfer.</p>



<h2>Community</h2>



<p>Gemini has a strong community supporting their crypto endeavors. Currently, the <a href="https://twitter.com/Gemini" target="_blank" rel="noreferrer noopener">Gemini Twitter</a> account has more than 300k followers.&nbsp;</p>



<figure class="wp-block-image"><img src="https://lh6.googleusercontent.com/qn2wCMs5wbLKegJcVA3QSBwcZ_0cs3yzuoxHzDxmhAbaSGpBB8msbbA6sFgZKMWPQByk_8ePB6_6GNkbaILc3aY_FDDZ8sOOi6ssBom0rq2F3jH6mu2HGYilaKfWbVzbMQ=s0" alt="Gemini Earn Twitter"/></figure>



<p>According to <a href="https://www.trustpilot.com/review/gemini.com" target="_blank" rel="noreferrer noopener">Trustpilot</a>, Gemini has almost 300 customer reviews with an average rating of 1.5. This is almost identical to their major competitor, Coinbase’s average <a href="https://www.trustpilot.com/review/coinbase.com" target="_blank" rel="noreferrer noopener">rating of 1.6 with almost 6000 customer ratings</a>. According to Trustpilot, 80% of the customer reviews rated Gemini as “bad”. Only 7% of customers were rating Gemini as excellent. Unfortunately, it seems that many customers have suffered from poor customer service from Gemini, with long wait times to deal with customer complaints being a common criticism.</p>



<h2>Conclusion</h2>



<p>Despite low general customer satisfaction, the suite of services provided by Gemini makes Gemini an extremely user-friendly platform with a wide range of services for all types of crypto investors. Currently, Gemini’s largest competitors are Coinbase and Kraken, and all three are based in the United States. However, for those looking for the largest list of supported crypto assets to earn interest on, Gemini beats both of them comfortably with a huge list of supported assets. Its seamless integration with its exchange platform also makes it an appealing prospect to those new to the crypto space.&nbsp;</p>



<p>Gemini continues to expand its suite of services. With a credit card in the works and a waitlist open, Gemini will compete with Coinbase’s debit card and <a href="https://www.stakingrewards.com/journal/blockfi-the-better-savings-account/" target="_blank" rel="noreferrer noopener">BlockFi</a>’s credit card. Gemini is a huge player in the crypto space both in the US and internationally. They will continue to perform strongly as long as they are able to ensure that customer service is improved and customers do not wait long times for service. Overall Gemini Earn is an extremely convenient service. It competes with crypto wallets that provide the same service such as Celsius and Nexo Wallet, while also seamlessly integrating with their primary service, their exchange.</p>


An introduction to Gemini Earn – Beginner’s Guide


<h2>Use the world’s biggest cryptocurrency exchange to stake your crypto</h2>



<p><strong>Staking cryptocurrency + Binance Exchange = Convenience and Income Opportunities</strong></p>



<p><a href="https://accounts.binance.com/en/register?ref=38719582" target="_blank" rel="noreferrer noopener">Binance</a> is the world’s largest cryptocurrency exchange. And they became the largest by offering as many options as possible in as many countries as possible to buy cryptocurrency. You can buy through bank transfers and wires, with a debit or credit card, or with a p2p purchase option where you buy directly from another person. For example, in many EU countries, you can use SEPA or bank transfer. In the US, on Binance.us, you can use ACH or wire transfers to buy. Yet in many South American countries, you have to use the p2p option if you want to transfer funds from a local account at Banco Popular or Itau in Argentina, Chile, or Colombia to buy Bitcoin or Ethereum.</p>



<p>So while Binance makes it convenient to buy crypto, they also make it convenient for you to stake your crypto. Binance has staking solutions for as many as 60 digital assets, including ETH 2.0. ETH 2.0 is Ethereum’s transformation from a POW network to POS network and you can stake ETH for this new launch.</p>



<p><a href="https://www.stakingrewards.com/earn/ethereum-2-0/" target="_blank" rel="noreferrer noopener">Ethereum 2.0</a> in particular is a unique opportunity. ETH is the 2nd largest cryptocurrency but these changes mean you can stake it for the first time. To stake on your own requires 32 ETH ($100,086 at today’s price). Currently, <a href="https://stakingether.com/" target="_blank" rel="noreferrer noopener">48,000 different funds, groups, and pools have staked ETH</a> to become validators. But you don’t need 32 ETH to stake ETH 2.0. You can join a staking pool like Binance and earn fees staking Ethereum.</p>



<p>You can stake other cryptocurrencies too.</p>



<h2>Staking Options on Binance</h2>



<p>With your Binance account, you can stake in one of 4 ways:</p>



<ol><li>Staking a High-Value Market Cap Crypto</li><li>Staking a Lower Value coin</li><li>Stake and Earn Daily with Fixed or Flexible Savings</li><li>Stake the BNB Vault</li></ol>



<h3>Staking a High-Value Market Cap Crypto</h3>



<p>With this option, you are staking for a Proof of Stake (POS) blockchain. You are helping to confirm transactions and keep the network secure and earning fees to do that. Here are a couple of examples of what you can stake and what you can earn.</p>



<p>With ETH 2.0, you can earn 6% over a fixed period of how long you maintain the stake. Binance and other staking pools can offer this since they pool your money together to get the minimum of 32 ETH required to stake. Ethereum is a unique case. As more people and groups stake it, the rate goes down. You could earn less staking ETH 2.0 and those lower rates apply no matter where you stake it.</p>



<p>With <a href="https://www.stakingrewards.com/earn/dash/" target="_blank" rel="noreferrer noopener">DASH</a>, a popular payments blockchain especially in South America, you can earn 7.39% annually for every 30 days that you stake it.</p>



<figure class="wp-block-image"><img src="https://lh5.googleusercontent.com/h2NseR1Qz434RgC7hciGm6QlVSGlSjfV3CHpvgwEeRy4DlywCB0aHgr3wZlriuv2oVOZt0hOmOpQZa8rZKUv3BkzcwDSuI0s53DaOcDVfKzStPuoIGMPwVeIzVlKpk454A=s0" alt="DASH Staking"/></figure>



<p>With ALGO, a growing blockchain for developing DeFi and other decentralized apps, you can earn 7.91%&nbsp; annually for every 30 days that you stake it. ALGO is a unique case in that it’s one of the easiest to stake for yourself with no transactions required. Yet as you can see from the 5.44% rate here on <a href="https://www.stakingrewards.com/earn/algorand/" target="_blank" rel="noreferrer noopener">Staking Rewards</a>, this is a case where you earn more on Binance than doing for yourself.</p>



<figure class="wp-block-image"><img src="https://lh4.googleusercontent.com/8YL38_MoR_2MDLPg2LNK9UtMQhyry25z7pxLiPJNmSYcE41vWAOQnNHwojUiT7YVL2r_oSc0_uYBfd34uAc7sqGFsUoy_qsfXTrfdfIYbjO7UzLDVaGExYEHzUMQ9Zci1Q=s0" alt="ALGO Staking"/></figure>



<h3>Staking a Lower Value Coin</h3>



<p>You don’t just have to stake high-value coins. High-value coins are often less risky due to the network effects they have built but you can speculate on smaller coins too. The greatest risk you face here is that the blockchain where you are staking fails to get more popular or worse gets less popular and less often used. Remember, what you earn by staking comes from the fees the users pay to send transactions on the network. Fewer transactions mean fewer fees and a smaller payout for you. As long as you understand this risk, you could earn some high-interest rates from the fees of smaller coins.</p>



<p>For example, <a href="https://www.stakingrewards.com/earn/lisk/" target="_blank" rel="noreferrer noopener">LSK (Lisk)</a> which is a blockchain application platform has a $450 million market value making it the 110th ranked cryptocurrency, according to CoinMarketCap. LSK is not a small project but its value is much lower than BTC, ETH, or USDC whose values are in the hundreds of billions of dollars. You can stake LSK on Binance for either 30, 60, or 90 days and earn 1.49%-2.23%&nbsp; interest based on the timeframe you choose.</p>



<figure class="wp-block-image"><img src="https://lh4.googleusercontent.com/HgQTIKf1kaGWiIu0_QScD-aOYk4hkqWb9PdIVlmBZoHR5LEtzLp0LDIWSJsMQ9Y0xNXvaAn_qLxobLMvUt0LlAHkjlXciC-FMhgHKbz9KK5hzuhcwtCBvMU-wbZ1dOc1Ow=s0" alt="LSK Staking"/></figure>



<p>MDX, a decentralized trading protocol for the Binance Smart Chain, is ranked #98 on CoinMarketCap and has a market value of $679 million. Here you can earn a double-digit interest rate by staking for 15 or 30 days.</p>



<figure class="wp-block-image"><img src="https://lh3.googleusercontent.com/eoJgFewcgMFwNS8lQAwJe8AdhmPqEyFfddPgcPnPqu2LRERDLtPq01mW8Ai82RNZYakf0fI232jhjTqf7QSnkVZmoIrmSXOmVrQlO36FORLhzEjBO6U-kxrLZyGgZImCRg=s0" alt="MDX Staking"/></figure>



<h3>Stake and Earn Daily with Fixed or Flexible Savings</h3>



<p>This option is great for maximum convenience. If all you want to do is select a cryptocurrency and use it as a savings account, then this is a good choice for you. You can select from almost all of the cryptocurrencies available and save and earn interest for as long as you hold that cryptocurrency. The only difference between the fixed and the flexible is that fixed, like the staking examples above, requires you to hold that crypto for a fixed period like 30 days. </p>



<p>Flexible means you can earn in BTC today, ETH tomorrow, and USDT over the weekend if you want by moving around different cryptos as much as you want. For example, USDT pays 1.20% annually in its flexible savings. Your interest is compounded daily. You can earn one day (1/360th) worth of interest on Tuesday, and then on Wednesday move your coins to <a href="https://www.stakingrewards.com/earn/pancakeswap/" target="_blank" rel="noreferrer noopener">PancakeSwap (CAKE)</a> and earn either 20% with the fixed savings for 15 days or 5% with the flexible savings meaning you can move your coins at any time.&nbsp;</p>



<figure class="wp-block-image"><img src="https://lh6.googleusercontent.com/Ej6PuWkReHOwHKh8nE5r3c2eep-Qf_SgxNXu5Zf1fJZSxoo9o6xUu1l-80-Baut224CuWPnVQLGGeE9_hThwEDck8CZKMSi22Y5tL3umgVZ5UJEyLtFMhlvNL41VGsv4hg=s0" alt="CAKE Staking"/></figure>



<p>CAKE runs on the Binance Smart Chain (BSC) so Binance has lots of ways to promote using it. This is something you should be aware of as this can be seen as good for offering flexibility or as bad as they are shilling their partner tokens where their network benefits. If you have confidence in Binance, then there are ways you can use this to your advantage by looking at apps and tokens on the Binance Smart Chain.</p>



<h3><strong>Stablecoins</strong></h3>



<p>Stablecoin interest rates, which are a great way to save within the cryptoeconomy, are much higher on other platforms than on Binance. That includes both other centralized options and DeFi options. We recommend you only seek to earn interest with stablecoins on Binance if you intend to use your coins in the short term on Binance for trading or other purposes available on the platform like futures, options, staking and pooling, or p2p trading.</p>



<h3>Stake the BNB Vault</h3>



<p>This is a special case as BNB is Binance’s own coin. Vault is the common term in the cryptoeconomy for either cold storage or high grade security storage of coins. The <a href="https://www.binance.com/en/bnbmining" target="_blank" rel="noreferrer noopener">BNB Vault</a> is the ability to stake the coin (like ETH 2.0 above) or provide liquidity to a DeFi app on the Binance Chain by staking it in a liquidity pool for yield as many yield farmers do.</p>



<p>But Binance isn’t the only place you can stake, although they don’t charge any fees for staking. Others do.</p>



<h2>Staking on Other Exchanges</h2>



<p>Other exchanges offer staking too. Two of the most popular are Coinbase and Kraken so we are going to look at those.</p>



<h3>Staking on Coinbase</h3>



<p>Coinbase is one of the world’s most popular exchanges. Currently, you can stake 4 cryptocurrencies on Coinbase. They are:</p>



<ol><li>Algorand</li><li><a href="https://www.stakingrewards.com/earn/tezos/" target="_blank" rel="noreferrer noopener">Tezos</a></li><li><a href="https://www.stakingrewards.com/earn/cosmos/" target="_blank" rel="noreferrer noopener">Cosmos</a></li><li>Ethereum 2.0</li></ol>



<p><a href="https://decrypt.co/66839/ethereum-2-staking-rewards-coinbase" target="_blank" rel="noreferrer noopener">Coinbase</a> says you can earn up to 5% on the first 3 and up to 6% on Ethereum. This is compared to 6.74% for Tezos or 7.91% for ALGO on Binance and the fact you can stake many more than these 4 on Binance if you want. Coinbase charges 20-25% for staking meaning if you earn 8% staking, you only get 6% of it.</p>



<h3>Staking on Kraken</h3>



<p><a href="https://www.kraken.com/features/staking-coins" target="_blank" rel="noreferrer noopener">Kraken</a> allows staking in 9 assets on-chain and 3 that they call off-chain which is basically just storage at Kraken and earning a passive interest rate on it. The 3 off-chain assets are USD, EUR, and BTC earning you 0.25% for BTC and 1.5% and 2% respectively for EUR and USD. The on-chain assets are in the image below and range from 4.5% to 12% with one asset KAVA paying 20% to stake it. Kraken charges <a href="https://www.blocksocial.com/top-staking-as-a-service-platforms-to-stake-crypto/" target="_blank" rel="noreferrer noopener">up to 15% in fees to stake</a>.</p>



<figure class="wp-block-image"><img src="https://lh6.googleusercontent.com/PTVInr8QgfcFH4SnxoJU3mLjoaC8flntj_3wG8pCZ0lkjzoA-Dr5vifRyX3t3IRA_bfc0P7R_2NUXZQz3Y-TNZIzt4yaqQwiiz_6mKUIap-L0WNuE7CrCV7IWKuwrSuYAQ=s0" alt="Kraken Staking"/></figure>



<p>You can see by the combination of higher fees and lesser selection that other exchanges are not as good as choice as Binance for staking your coins.</p>



<p>But maybe you don’t have (or don’t want) to open accounts with many exchanges.</p>



<h2>Staking Yourself</h2>



<p>You can stake for a POS blockchain without needing an exchange account. In fact, you can do it 2 ways: Staking as a Service or Direct Staking. The biggest risk is with direct staking because you need to understand the software and programs a blockchain uses or you can risk slashing. More on that below.</p>



<h3>Staking As a Service</h3>



<p>One way you can stake without keeping your money at the exchange (Binance, Kraken, Coinbase) is by using a ‘staking as a service’ type business to help you stake for yourself. These are also known as non-custodial staking providers.</p>



<p>Why would you want to use staking as a service? You keep control of your funds and receive funds directly from the blockchain (not over a third-party like Binance).</p>



<p>But Staking requires technical knowledge of both hardware and software. You need dedicated hardware which could mean 1 or 2 computers or could mean a small server farm like co-location/cloud facilities use. You also need to understand the software your chain of choice uses, and you need to be able to maintain the hardware and software for when updates come as well as provide security.</p>



<p>OR</p>



<p>You can pay a Staking as a Service business to do these things if you don’t have the expertise. Then you pay them monthly or as a % of the staking fees that you earn like the exchange staking fees. You use their infrastructure to stake. Two of the most popular staking as a service firms are Figment and Staking Facilities.</p>



<p><a href="https://figment.io/" target="_blank" rel="noreferrer noopener">Figment</a>, based in Canada, lets you stake 31 cryptocurrencies and charges anywhere from 0 up to 15% in fees for you to stake there. You maintain custody. Staking Facilities from Germany lets you stake 9 cryptocurrencies and charges anywhere from 5 up to 20% in staking fees.</p>



<figure class="wp-block-image"><img src="https://lh3.googleusercontent.com/1E-OAummw7CsC9oct0fh0RhZX7S5dYh2yLO774jhv0aTcpMeLHAlm9ILIgXhAfnUqg4E9KOYBE6a2XRYH43tcVbPEZIbdd8i1_Eo7-Fgiai-_B8j5Xw8H21hpWsQIHvK5Q=s0" alt="Figment Staking"/></figure>



<p>A partial list of Cryptos to Stake on Figment</p>



<h3>Staking Directly Yourself</h3>



<p>You can also stake for yourself by investing in the infrastructure (both hardware and software) and running a validator yourself. They are called validators because one main role they play is verifying and validating transactions. Understanding the chain you are using and their software plays an important role here because when you stake yourself, you put your coins at risk for slashing. Slashing is when you verify a false or fraudulent transaction by double signing a block or have too much downtime to verify transactions. You can lose your coins if you do this. In fact, it’s such a big risk, this is the primary reason other than hardware expertise that people don’t run their own validators. </p>



<p>Other risks include high minimum staking requirements, a physically secure setup for your servers and more specific hardware expertise and maintenance requirements. Instead, they assign that role to someone like Binance or the staking as a service company to do while you maintain control of your funds. The full expertise required to stake on your own is well beyond the scope of this article. If you want to stake to earn money on your crypto for investment purposes, then you are unlikely to want to stake for yourself even if your rates that you earn would be slightly higher for doing so. The risk is just too great.</p>



<h3>Comparison</h3>



<p>Here’s a comparison of some common cryptos you can stake in the places we’ve discussed in the article. The self staking numbers come from us at <a href="https://www.stakingrewards.com/" target="_blank" rel="noreferrer noopener">Staking Rewards</a>.</p>



<figure class="wp-block-table"><table><tbody><tr><td>Crypto</td><td>Binance</td><td>Coinbase</td><td>Kraken</td><td>Figment</td><td>Self Staking</td></tr><tr><td>Tezos</td><td>6.74%</td><td>4.63%</td><td>5.5%</td><td>Up to 5.34%</td><td>5.92%</td></tr><tr><td>Algorand</td><td>7.91%</td><td>4%</td><td>N/A</td><td>Up to 5.54%</td><td>5.54%</td></tr><tr><td>Cosmos</td><td>9.47%</td><td>5%</td><td>7%</td><td>Up to 9.27%</td><td>10.32%</td></tr><tr><td>ETH 2.0</td><td>Minimum 4.9% up to 20%</td><td>5%</td><td>5-7%</td><td>Up to 5.53%</td><td>6.21%</td></tr><tr><td>Solana</td><td>9.20%</td><td>N/A</td><td>6.5%</td><td>Up to 6.35%</td><td>7.05%</td></tr><tr><td>Polkadot</td><td>11.51%</td><td>N/A</td><td>12%</td><td>Up to 13.19%</td><td>13.89%</td></tr></tbody></table></figure>



<p>Binance has higher rates than self staking for Tezos and Algorand. The downside is you have to lock your crypto at Binance for the fixed rates while when you self-stake, you can move your coins whenever you want.</p>



<h2>Conclusion</h2>



<p>So you can see from the combination of:</p>



<ul><li>No or very low fees</li><li>By far the best selection of cryptos to stake</li><li>Ease of Use and</li><li>Flexiblity with staking or fixed or flexible savings plans</li></ul>



<p>That Binance is one of the best options for staking that’s out there and, by far, the best staking option offered from an exchange. And if you happen to have an account there already, everything is enabled for your use so you can stake today.</p>



<p>If you don’t have an account at Binance, <a href="https://accounts.binance.com/en/register?ref=38719582" target="_blank" rel="noreferrer noopener">click this link</a> and sign up for one today free. Then let our free research here at Staking Rewards help guide you to making the right choices for which cryptocurrencies you should stake now and for the long term.</p>


How to Stake Your Cryptocurrency on Binance &#8211; Beginner&#8217;s Guide


<h2>How to stake cryptocurrencies to earn yield safely</h2>



<p>Staking? When you look at the possible options for investment in cryptocurrencies, lending is one of the top options that come to mind. Some platforms pay you just like a savings account and others pay you interest in specific crypto for lending specific crypto. The two main lending options are:</p>



<ul><li>DeFi or CeFi</li></ul>



<p>DeFi, short for decentralized finance, is the single biggest trend in the cryptoeconomy right now. Platforms like Uniswap and Compound have billions of dollars of crypto locked into their apps as collateral for borrowing.</p>



<p>And CeFi, centralized finance apps, like BlockFi or Celsius, are seeing record volumes too. With these, you can lend your crypto out to earn interest. On these apps, you have the company involved, too. Some see the centralized company support as a good thing, and others as a bad thing.</p>



<p>And yet, for some reason, one of the safest options available in the cryptoeconomy is hardly ever talked about for generating a yield on your crypto assets. That option is staking. When you stake a POS blockchain, you are helping it operate, stay secure, and confirming transactions. It’s the ultimate insider position. And you are not dependent on crypto prices or a centralized third party to be sure you get your money.</p>



<h2>Stablecoins: Often Considered the Lowest Risk</h2>



<p>Stablecoins, whose objective is to maintain price stability, are usually considered the lowest risk savings option in the cryptoeconomy. And it is pretty low risk since the asset these coins usually try to maintain stability with is the USD. That means that many are removing the risk of currency fluctuations in the price of crypto to earn some interest. To these savers, it’s just a digital dollar they are lending and earning interest on. And that’s okay. Let’s see what rates you can earn on <a href="https://www.stakingrewards.com/earn/tether/" target="_blank" rel="noreferrer noopener">USDT (Tether)</a> in some of these different places.</p>



<p><em>Spoiler Alert: these rates, on average, will crush the bank savings deposit rates they offer the public.</em></p>



<figure class="wp-block-table"><table><tbody><tr><td>Platform</td><td>DeFi or CeFi or Other</td><td>Interest Rate on USDT</td></tr><tr><td><a href="https://compound.finance/markets" target="_blank" rel="noreferrer noopener">Compound</a></td><td>DeFi</td><td>2.34%</td></tr><tr><td><a href="https://venus.io/" target="_blank" rel="noreferrer noopener">Venus</a></td><td>DeFi</td><td>7.82%</td></tr><tr><td><a href="https://blockfi.com/rates" target="_blank" rel="noreferrer noopener">BlockFi</a></td><td>CeFi</td><td>8%</td></tr><tr><td><a href="https://nexo.io/earn-crypto" target="_blank" rel="noreferrer noopener">Nexo</a></td><td>CeFi</td><td>10%</td></tr><tr><td><a href="https://celsius.network/earn-rewards-on-your-crypto" target="_blank" rel="noreferrer noopener">Celsius</a></td><td>CeFi</td><td>8.88%</td></tr><tr><td><a href="https://www.binance.com/en/earn" target="_blank" rel="noreferrer noopener">Bina</a><a href="https://www.binance.com/en/earn">nce</a></td><td>CeFi</td><td>1.2%</td></tr></tbody></table></figure>



<p>Click the links for sources for these Interest Rates on these platforms.</p>



<h3>Custody</h3>



<p>Custody of your funds answers the question of who controls your money? In a CeFi platform like BlockFi, you don’t control your money. You custody your funds with them. The same is true for every other CeFi platform. Part of the centralization is that control over the funds. The company also can step in and negate transactions or help enforce a collection. Honestly, that’s what legacy financial institutions do, just available now in the cryptoeconomy.</p>



<p>Some investors in crypto are dead set against custody of their funds with someone else. To them, the true believers, it goes against the ethos of investing in cryptos in the first place. For them, DeFi where you custody your funds and keep them in your wallet while you lend is the only way to go.</p>



<p>While some people care about this deeply, others don’t care at all. It’s up to you to decide if this is important.</p>



<p>The idea of price stability and many times what you can earn in a bank makes these options attractive. That’s especially true for newer investors.</p>



<p>Yet, they are missing out on staking, which can be even safer than stablecoins.</p>



<h2>Staking: The Ultimate Insider Position</h2>



<p>One reason legacy banks make so much money is that they are in the best position to benefit from changes in the market or new financial products. They are the link between you and the financial markets.</p>



<p>‘You want to use the new financial product X? Great, just pay us 1% and we will let you use that product.’ The bank is the ultimate financial insider. With staking, that’s no longer true.&nbsp;</p>



<p>The bank isn’t the insider. <strong>You are</strong>.&nbsp;</p>



<p>The bank is not earning a portion of the fee every time someone uses the network. <strong>You are</strong>.</p>



<p>The bank is not securing the network making it safe to use by holding onto some of its coins. <strong>You are</strong>.</p>



<p>The bank (or the platform) doesn’t give you the option of non-custody. But you have that choice.</p>



<p>The bank is not making these choices for you. <strong>You are</strong>.</p>



<p>Instead of buying dollars or a dollar-based stablecoin like USDT, with staking you are buying some of the crypto of your choice and staking it to help the network run.</p>



<h2>Opportunities with Staking</h2>



<p>Staking your cryptocurrency means you will be:</p>



<ol><li>Buying a cryptocurrency</li><li>Staking it with a custodial or non-custodial provider</li><li>Earning interest from fees generated on the network</li></ol>



<h3>Buying a Cryptocurrency</h3>



<p>When you stake you start by buying the crypto of your choice. You want a network that is active and running and generating fees. More transactions equal more fees equal more return on your investment.</p>



<p>Seems simple enough, yet there is wide variation in rates and fees you can earn. On our front page here at <a href="https://www.stakingrewards.com/" target="_blank" rel="noreferrer noopener">Staking Rewards</a>, this is just a snapshot of some of the different rates you can earn. Remember these rates change slightly all the time as investors stake and unstake their crypto.</p>



<figure class="wp-block-image"><img src="https://lh3.googleusercontent.com/cfWogZ9FZ2eqAX4lLVe8aPk9n7SYHJCkzVCVn9EVgClz0O18wmM4gaChWJnGdOa8z_s7N6gRzUbxjWCHWw05I3hcQepB8_Iz7HaQFb6VU6WhvhhyYSF_ZclGFreTg5QjdA=s0" alt="Staking Rewards"/></figure>



<p>Asset #1 Cardano pays 6.22% in this snapshot while asset #5 Terra pays 5.4% and asset #3 Polkadot pays 13.21%. The rates vary widely.</p>



<p>One reason rates vary like this is supply and demand. Some chains offer higher rates to attract more funds. Another reason is how much is staked already. Cardano has 69.75% of its eligible tokens staked already. This means that while more staked coins from different parties benefit them for security, they are well taken care of right now. They don’t need your coins as much so they don’t have to offer large rewards for them.</p>



<h3>Staking Your Crypto with a Custodial or Non-Custodial Provider</h3>



<p>Here you have a decision to make. Like with DeFi or CeFi for lending, you can choose to custody or not custody the crypto that you stake. We can help make this decision easier for you. It’s one of our missions at Staking Rewards. Let’s take a look at how you can decide.</p>



<p>Pick your crypto. In this case, we chose Cosmos (ATOM) from the front page of the website just under the listed staked assets.&nbsp;  </p>



<p><img loading="lazy" src="https://lh5.googleusercontent.com/fMy3YdZKdWos38d0izk9T38DYLGDAtZQqx_kKXReVY4LtGr6PlyeusykHhCzkn_Z4kUNhj1UiberF2M0olif52rGDpvW-sWj2QnSUJ3I1djbvqh8DRPeayuogoYLsrBdTA=s0" width="555" height="512"></p>



<p>And there are two options here: Decentralized or Custodial. Remember custody means control so you are giving up some control if you choose it. Decentralized means you maintain control of your funds while staking by connecting your wallet into their system.</p>



<p>Search the Custodial options. With a Binance account, you can immediately start staking ATOM or many other cryptocurrencies. If you want this option but don’t have a Binance account, then you can go <a href="https://accounts.binance.com/en/register?ref=38719582" target="_blank" rel="noreferrer noopener">open your account</a> here.</p>



<p>Search the Decentralized options. These options like Figment and Stakezone give you more control. We see with Figment we can earn 9.47%. Another nice benefit of our analysis of providers is that if you find a provider you like then you can see what other cryptos they also stake. Here is Figment’s page on our site.</p>



<p><img loading="lazy" src="https://lh5.googleusercontent.com/DIWHswSNfuLEDnLQBNqbyEq1G7CQHfxBDzo57fu8j8XS_utY_zCkY-Fz6AJVWw8f7iDbCvSLz9DObNbECtcLGegnLL7XwzSCoY9MLXR6LdyTkPf__bBkBPqqlMb0eYZCzA=s0" width="624" height="205"></p>



<p>And there’s good information here too of fees and number of stakers using their platform. Here’s what Stakezone looks like for 10.69%. </p>



<p><img loading="lazy" src="https://lh3.googleusercontent.com/xXLOhU-RJyN3-Swh7_0djwyPmN4NlgOBhkw-lCsDqZECelsKxrkoVj0D8imPn5xnWgivOZviNHTeZwXt2seDbJRt8In83jLgE51rb4Tb_eBl9nw2PxLatA5utGKE0sw4WQ=s0" width="624" height="228"></p>



<p>The platforms have different offerings from each other and different fees that you want to know in advance. So we’ve found the box listing for ATOM and clicked on it. This is from the ATOM listing.</p>



<p><img loading="lazy" src="https://lh5.googleusercontent.com/DBcCdHJpcx1awGyFx-UIYL51ERLUPL-59lF2owTkms-P2oDY992jyziBM_TfHxh8QCiStczOkXUZklHHxf5mIiM7B_Z2qtwhH0rNuNLmm-IHBQISUoynwkqMthbqLj4FRw=s0" width="624" height="119"></p>



<h3>Validator</h3>



<p>A validator is the one who validates the transactions in a POS network. When you stake you can run a validator yourself if you have the tech expertise or you can assign/delegate your coins to a validator solely for the purposes of validating transactions and pooling your votes together for governance questions. It sounds confusing but don’t worry. If you pick a provider like Figment or Stakezone, then they are doing the validator work for you. You only have to select if you stake for yourself from your own servers.</p>



<p>On our ATOM listing, down at the bottom, you can see places to delegate your coins for validation and voting that include Binance and Coinbase. Our decentralized options are here too.</p>



<h3>Earn Interest from Fees generated on the network</h3>



<p>Your interest and your ROI come from fees generated on the network from transactions. Those fees are in the same crypto you are staking. This means you have the option of holding more of that crypto, trading it out for another crypto, or exchanging it out for fiat. The choice is yours with the only possible exception being some cryptos have a lockup period where you can’t move the currency for a few days. That should be clearly outlined and understood before you start staking.</p>



<p>You can see that from these listings there are many blockchain projects that are large and stable but still pay more than 10% for you to stake your coins there. Many would make for good investments but they are not without risk.</p>



<h2>Risks with Staking</h2>



<p>Staking your coins is a lower risk than many people think at first. But there are risks.</p>



<p>You face two major risks staking:</p>



<ol><li>The underlying crypto declines in value</li><li>The underlying network becomes less popular</li></ol>



<h3>Underlying Crypto declines in value</h3>



<p>Your biggest risk with staking is that the underlying crypto declines in value. Crypto is volatile. Some will look at this risk like a dividend-paying stock and say that the underlying asset is less relevant than its continuous payments. That’s partly true. The bigger problem with a decline in the crypto’s value is that you are receiving your rewards (a portion of the fees) in the same crypto that you stake. So they will be worth less too bringing your ROI down. Also, other reasons that cause the underlying crypto to decline could make it a less attractive investment overall. One example of this would be an expensive and long-running lawsuit like XRP has with the SEC in the US.</p>



<p>So you need to watch what your crypto does and not be afraid to move from one project to another if you’ve lost confidence in it as an investment.</p>



<h3>Underlying Network becomes less popular</h3>



<p>While this risk would tend to get reflected in a declining price (our first risk above), the risk of the underlying network becoming less popular is a separate risk unto itself. This can happen for many reasons including technological obsolescence, losing ground to a competing blockchain, or other reasons.</p>



<p>But the bottom line is this. If the network becomes less popular, then it generates fewer fees. If it generates fewer fees, then they have to pay you less. Transaction volumes and sizes, as well as developer interest in the network, are both good ways to see if the blockchain for your crypto is growing, maintaining, or losing popularity with its users.</p>



<h2>Staking combines low risk with many options</h2>



<p>With stablecoins, there are only a few, and almost all are tied to the USD. With staking, you combine the low risk of stablecoins with many more choices. Fees that custodial or decentralized platforms charge are transparent giving you a good idea of exactly how much you will earn. You can then decide if you are comfortable with ATOM, or ADA, or ETH, or Kusama and the rates of return that they offer. With this number of choices, it’s easier to find something that fits your level of risk.</p>


Staking Rewards

Ethereum and the 7 Challengers – Part 1: Does ETH 2.0 ward them off?

Why Traditional Finance Cannot Compete with Crypto

2021 Staking Ecosystem Report

Solana Deep Dive Part 2: A Guide to Navigating a Booming Ecosystem

The Mythical Beast that is Compounding

The Newsletter

Reviews

Ethereum and the 7 Challengers – Part 1: Does ETH 2.0 ward them off?

Solana Deep Dive Part 2: A Guide to Navigating a Booming Ecosystem

An introduction to Gemini Earn – Beginner’s Guide

How to Stake Your Cryptocurrency on Binance – Beginner’s Guide

Research

Why Traditional Finance Cannot Compete with Crypto

2021 Staking Ecosystem Report

The Mythical Beast that is Compounding

Staking – How to Earn Yield Safely with Crypto