Is Crypto Staking Profitable?
December 21, 2021 (Investorideas.com Newswire) Everyone is talking about crypto staking as a source of passive income. So, if you are new to the crypto world or simply want to make more returns, one of the questions running through the mind might be, "is it profitable?" This is a good question because you are committing your coins, and we are going to answer it in detail.
A quick answer to the question is that staking is a profitable undertaking. So, let's start by digging deeper to understand how staking works.
What is Crypto Staking?
Staking is the process of buying crypto coins and holding (locking) them to the respective blockchain network to help with confirming transactions. We must indicate that simply buying the coins and leaving them to lie in your wallet is not staking. Yes, you will have your coins, but they will not be generating passive income.
Crypto staking is only possible when you buy coins based on blockchain that uses proof of stake (POS) consensus protocol. Unlike proof of work (POW) blockchains that require nodes to solve complex mathematical problems to get a chance of forging the next block, POS only requires one to have a stake (own some coins). Indeed, you do not even have to buy a powerful computer to start staking. Simply identify a good decentralized finance platform to join a pool. Some good POS-based coins are:
- Ethereum (moving from POW to POS).
- Flow Token.
Benefits of Crypto Staking that Show it is Profitable
Here are the main benefits of crypto staking that you should anticipate:
- You Stake Your Coin for Passive Income
Once you stake your coins, all that you need to do is wait for passive income. Remember that you will not need to sell your coin the way it happens with crypto traders. This also means that you do not have to leave your job to get engaged in crypto staking.
- You Get to Enjoy the Coin's Value Growth
Currently, the interest in cryptocurrencies has been increasing, and this means one thing: the chances of crypto coin values going up are very high. So, crypto staking around this time can be highly beneficial because you expect to enjoy higher value when the coins are finally returned to your wallet.
- You Do not Need to Buy Specialized Equipment
If you want to be a miner in cryptocurrencies that rely on proof of work (POW) protocol, such as Bitcoin, you are required to start by purchasing expensive equipment such as ASIC miners. Well, you can say goodbye to these additional costs because all you need to start staking is your POS-based coins. Also, you will not incur extensive power bills that are common with mining platforms. Indeed, even getting started is simple, and it only requires minutes.
As we look at the benefits that come with crypto staking, it is also important to appreciate that it is not without some cons. The most notable of them is that the coins you have staked can lose their value during the staking period. However, the value could still have changed even if you had held the coins in your wallet. Therefore, staking is a risk worth undertaking.
As you can see, crypto staking comes with dozens of benefits that make it highly profitable. The lovely thing about it is that you are not losing your coins, but only committing them for some time before getting them back, plus the rewards. The best way to stake your crypto coins is by working with a decentralized finance (DeFi) platform, such as Mantra Dao. They have all the answers that you might have about staking, and you can count on them to optimize your passive income.
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