Use the world’s biggest cryptocurrency exchange to stake your crypto
Staking cryptocurrency + Binance Exchange = Convenience and Income Opportunities
Binance 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.
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.
Ethereum 2.0 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, 48,000 different funds, groups, and pools have staked ETH 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.
You can stake other cryptocurrencies too.
Staking Options on Binance
With your Binance account, you can stake in one of 4 ways:
- Staking a High-Value Market Cap Crypto
- Staking a Lower Value coin
- Stake and Earn Daily with Fixed or Flexible Savings
- Stake the BNB Vault
Staking a High-Value Market Cap Crypto
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.
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.
With DASH, a popular payments blockchain especially in South America, you can earn 7.39% annually for every 30 days that you stake it.
With ALGO, a growing blockchain for developing DeFi and other decentralized apps, you can earn 7.91% 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 Staking Rewards, this is a case where you earn more on Binance than doing for yourself.
Staking a Lower Value Coin
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.
For example, LSK (Lisk) 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% interest based on the timeframe you choose.
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.
Stake and Earn Daily with Fixed or Flexible Savings
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.
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 PancakeSwap (CAKE) 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.
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.
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.
Stake the BNB Vault
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 BNB Vault 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.
But Binance isn’t the only place you can stake, although they don’t charge any fees for staking. Others do.
Staking on Other Exchanges
Other exchanges offer staking too. Two of the most popular are Coinbase and Kraken so we are going to look at those.
Staking on Coinbase
Coinbase is one of the world’s most popular exchanges. Currently, you can stake 4 cryptocurrencies on Coinbase. They are:
Coinbase 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.
Staking on Kraken
Kraken 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 up to 15% in fees to stake.
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.
But maybe you don’t have (or don’t want) to open accounts with many exchanges.
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.
Staking As a Service
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.
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).
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.
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.
Figment, 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.
A partial list of Cryptos to Stake on Figment
Staking Directly Yourself
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.
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.
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 Staking Rewards.
|Tezos||6.74%||4.63%||5.5%||Up to 5.34%||5.92%|
|Algorand||7.91%||4%||N/A||Up to 5.54%||5.54%|
|Cosmos||9.47%||5%||7%||Up to 9.27%||10.32%|
|ETH 2.0||Minimum 4.9% up to 20%||5%||5-7%||Up to 5.53%||6.21%|
|Solana||9.20%||N/A||6.5%||Up to 6.35%||7.05%|
|Polkadot||11.51%||N/A||12%||Up to 13.19%||13.89%|
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.
So you can see from the combination of:
- No or very low fees
- By far the best selection of cryptos to stake
- Ease of Use and
- Flexiblity with staking or fixed or flexible savings plans
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.
If you don’t have an account at Binance, click this link 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.