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April 20, 2022

Which Exchange is the Best for Cryptocurrency Staking?

What is staking?

Staking refers to locking your cryptocurrency away in a proof of stake algorithm. By doing this, the blockchain will reward you with the currency over time while you help validate the system. You are essentially loaning your coins to the staking contract and being paid interest in return. Many blockchains are switching to the proof of stake algorithm as it is a more eco-friendly way to mine currency and validate the transactions. Currently, Cardano and Tezos are some of the biggest players in this protocol; however, with the switch to ethereum 2.0, users will soon be able to stake their ethereum for rewards.

What exchanges offer staking rewards?

To be able to stake your coins and take advantage of these relatively high interest rates on crypto, you must utilize a digital exchange to make this transaction. Most major crypto exchanges will offer staking at the base rate that the specific blockchain offers; however, other exchanges will offer an overall interest rate while they handle the staking on the backend themselves. Kraken, Binance, Coinbase, Crypto.com and FTX are all major exchanges that offer staking with yields all the way up into the double digits on your crypto. At a base-level, most exchanges will offer USDC staking, as that is one of the most widespread and lucrative opportunities in crypto staking, but certain exchanges will broaden this to many other coins.

The Differences

Coinbase and many other exchanges will offer staking rewards that are on-par with what the specific coin offers them. For example, you can expect to earn around a 6% annual yield on your Tezos coin while staking it on a major exchange. While this is great, USDC rates can even go upwards of 10% on some exchanges. For users who don’t want to deal with staking and re-staking their many coins within an exchange, FTX.US offers a unique solution.

While utilizing the FTX platform, you can switch on staking for all assets and they will give you 8% APY on all of your crypto, paid out by the minute. This means even coins that don’t utilize the proof staking algorithm are able to earn interest on their platform, from Bitcoin to dogecoin. This is a major advantage that can take a lot of micro-management away from the user. FTX also offers a free coin on every trade to help aid with the fees that are associated with trading.

Gemini earn is another crypto exchange with a slightly different solution. On their platform, users can lend their crypto to institutions for an agreed upon daily interest rate. These interest rates change based on demand, but can be a lucrative way to gain passive income through your free crypto. Kucoin has a similar model with peer-to-peer crypto lending that allows the user to set their preferred daily interest rate and wait for someone to come and take the offer.

Crypto Taxes

With all that being said, if you do decide to jump into this world of crypto and even pick yourself up some tokens or NFTs, you need to make sure that you have the proper tools on hand to help you manage your financial accounting needs. One of the best solutions for you will be Ledgible.

With Ledgible, you can report and keep track of your crypto transactions with the supported integrations as you dive into the crypto space with this new information. If you want to learn more about Ledgible and get started for free, click here.

Disclaimer: The author and Ledgible do not provide investment advice and nothing in this article is meant to be taken as such. This website is presented solely for informational and entertainment purposes and is not to be construed as a recommendation, solicitation, or an offer to buy or sell / long or short any securities, commodities, cryptocurrencies, or any related financial instruments.

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