How to stake crypto in 3 steps

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If you have decided to invest in crypto, staking is a great way to increase your returns. Many cryptocurrencies, especially the newer ones, validate transactions using a model called proof of stake. With this model, people who own the cryptocurrency can bet it. This means that they let their crypto be used by the blockchain to validate transactions.

In exchange for the crypto bet, participants receive rewards for what they have wagered. You could think of it as earning interest on what you have in a savings account. The big difference is that even though bank account interest rates tend to be very low, you can often earn 10% or more with crypto staking.

Like almost anything crypto related, staking can seem confusing at first. It’s easier to do than you might think, and you are free to withdraw your crypto if you wish to trade it later. Once you know how to bet on crypto, you can start earning passive income from it.

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1. Learn more about the cryptos that offer staking

To start staking, you must have proof of stake cryptocurrency. These are the only cryptocurrencies you can bet. Fortunately, the proof of stake model is becoming more and more popular due to its effectiveness.

Choosing the right crypto is the most important part of the staking process. A common mistake here is to choose a crypto just because it offers huge rewards. It’s always tempting to buy when you see a crypto offering 100% or more annual stake rewards, but many of them are bad investments that will drop in price.

You should only buy crypto if you are sure that it is a good long term investment. Think of staking as the icing on the cake and don’t make it the only reason you buy.

There are many proof-of-stake cryptocurrencies that you can consider. Here are some of the bigger ones:

Ethereum (ETH) is also moving to the proof of stake model. It’s not 100% yet, but it can be staked.

2. Buy the cryptocurrency you want

Now that you know what cryptos you can bet, the next step is to pick one and buy it. It may sound simple, but it’s important to consider where you will be making the purchase. The easiest option is to choose one of the cryptocurrency exchanges with a built-in staking feature.

The reason for taking your time here is that not all cryptocurrency platforms allow you to bet crypto. Currently, most stock brokers and payment apps that sell crypto do not offer staking. They also won’t let you transfer the crypto you buy on their platforms.

So let’s say you buy crypto in one of these places. You will not be able to wager it on the platform or transfer it to another wallet or exchange where you can wager it.

This is why you should stick to exchanges that give you full control over your crypto. Some of the best options include:

Each of these exchanges offers staking with some of their cryptocurrencies, so you can stake what you buy with just a few clicks. You will also have the option to transfer your crypto if you wish to put it elsewhere.

3. Bet your crypto through an exchange or a pool

This part of the staking process depends on the crypto you bought and the exchange where you bought it.

If you’ve used an exchange that allows you to stake this crypto, then it likely has a betting page or betting option on your wallet. Check out the exchange’s help section if you’re unsure how to do this.

Another option with many cryptos is to use a staking pool. These pools consist of crypto funds that investors have pooled to earn more wagering rewards. To bet on a pool, you usually first need to transfer your crypto to a crypto wallet. Then you can choose a staking pool and send the crypto there through your wallet.

Crypto staking is a fairly straightforward process, especially now that several exchanges offer it. Once you’ve determined what you’re going to buy, it’s a good idea to research how staking works for that specific cryptocurrency. This will help you choose the staking method that works best for you and offers the most rewards.

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