Which 5 cryptocurrencies to stake in 2022? Find out the most used!
Staking is a typical feature of the crypto industry that involves locking up some coins or tokens for a certain period of time to obtain a reward. The actual purpose of this process is to participate in the Proof-of-Stake consensus mechanism of a blockchain. In fact, staking helps achieve network consensus and validate all transactions in a decentralised and secure manner. Everyone can stake cryptocurrencies and there are indeed many ways to do it – you can read the guide here. But which cryptos can you lock up? Here are 5 cryptocurrencies to stake in 2022.
1. Ethereum (ETH)
Ethereum is the leading network in terms of staking volumes, and after the definitive switch to a Proof-of-Stake consensus mechanism, ETH staking will become an increasingly important and widespread practice. As is often the case, ETH can be staked in various ways and with various aims. You can stake your ETH in four different ways: ‘solo home staking’, ‘staking as a service’, ‘pooled staking’ and ‘centralised exchange’.
- Solo home staking
You use your ETH to open a validator node yourself. This is the type of staking that requires more effort, some technical skills and full control of your own funds. It requires a minimum lockable amount of 32 ETH and a constant internet connection.
- Staking as a Service
You have 32 ETH available but do not want to manage a node on your own? You can delegate them to an existing validator node. Your ETH remain yours (and thus you earn staking rewards) but at the same time they are used by a node as a stake needed for the validation mechanism. This type of staking is not available directly within the Ethereum protocol, you need to use third party services.
- Pooled Staking
You can delegate your staked ETH to validator nodes also through dapps’ staking pools or protocols (decentralised or centralised). The difference with staking pools is that you can also delegate small amounts of crypto less than 32 ETH.
- Staking in centralised exchanges
You can stake ETH on centralised exchanges. This is one of the easiest ways to do it, and it’s suitable for inexperienced people as well. On Young Platform, you can try staking ETH through the Earning Wallet feature.
2. Polkadot (DOT)
Polkadot’s consensus mechanism is a variant of the standard PoS and is called Nominated Proof-of-Stake. On Polkadot, users who own DOT (called nominators) delegate their stakes to the nodes they deem most deserving and earn rewards based on the performance of the validator they have chosen. Validators and nominators receive equal rewards that are not proportional to the size of the stake, as in other protocols. On Polkadot, you can unlock your stake whenever you want, but your cryptos will be unlocked and return to your full possession after 28 days. This ‘nomination’ mechanism incentivises users and validators to behave honestly: users who behave well are rewarded, those who behave badly are turned away and the network remains secure.
3. Solana (SOL)
Among the top 5 cryptocurrencies to stake in 2022 is SOL, the Solana coin. This blockchain also makes use of a Proof-of-Stake mechanism – there are currently 1,746 validators on Solana to ensure the functioning and security of the network. If you want to stake SOL directly on the network, you can check out the rewards on their website. Rewards are calculated and distributed once per epoch (a period of about 2 days) and issued to all validators and delegators in the first block of the next epoch.
4. Avalanche (AVAX)
As time goes by, Avalanche is seemingly proving to be a viable alternative to Ethereum. Over the past year it has received a lot of funding from VCs and has not been afraid to use it to expand its ecosystem and improve its structure. The rewards for staking on Avalanche average 9.23% per year. In contrast to other platforms, staked tokens are never subject to the risk of slashing, i. e. the loss of the stake as a result of unfair actions against the network. You can check the total amount of AVAX in staking, rewards, validators and delegators.
5. Cardano (ADA)
Cardano has a constantly growing ecosystem and its native dapps are among the most innovative around. The network works thanks to ADA staking, through validator nodes and delegating users. Cardano’s Ouroboros protocol chooses a validator based on the size of the stake it holds. Therefore, nodes with more staked ADA will have more chances to add a new block to Cardano and obtain the rewards. You can work out your staking rewards. Remember, though, that the rewards depend on many factors such as the validators performance, the number of validated blocks and, in general, possible changes in the network.
The most popular cryptos for staking in 2022
Ethereum, Solana, Cardano, Avalanche and Polkadot are therefore the most widely used cryptocurrencies for staking in 2022. Specifically, Ethereum has a staking marketcap (i.e. the dollar value of all its staked tokens) of 22 billion USD, Cardano and Solana of 15 billion, Avalanche of 6 billion and Polkadot of 5 billion. This tells us about how widely these blockchains are used, but the most interesting data is the estimated percentage of rewards that can be received by staking directly on the relevant blockchain (the data is variable – these percentages are relevant to the time the article was written). Among these 5 cryptos, the highest percentage is achieved by Polkadot (13.98%), then Avalanche (8.8%), Cardano (4.98%), Solana (4.73%) and Ethereum (4.14%). The list of the top 5 cryptocurrencies for staking in 2022 ends here, now find out about all the relevant opportunities on Young Platform!
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