Look before you leap
Many users might simply compare the highest yields being offered by various staking pools, but there are other important factors to consider. So says David Make, the founder of YieldFarming.com, which teaches investors how to earn income from their cryptocurrency.
“Many coins require a minimum lock-up period that restricts you from withdrawing assets during a set time period and there may be different waiting periods for withdrawing assets on different Blockchains,” he says.
A lock-in period — which could range from weeks to months — takes staked crypto assets out of circulation. At the end of the staking duration, you earn yield in addition to regaining access to your cryptocurrency holdings.
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First, you need to buy and store the relevant tokens in your digital wallet. For example, if you want to stake for Cardamom, you will need to have Cardamom’s ADA token in your wallet.
Many popular earn crypto while learning exchanges offer users the ability to stake crypto directly on their platform. There are also dedicated staking platforms such as Ever stake, Block daemon and others. These allow you to easily compare a variety of staking opportunities and stake assets by connecting your cryptocurrency wallet.
The process of getting started in yield farming is similar but is done by using decentralized exchanges such as Unisia and Pancake Swap or decentralized applications like Eave or Curve Finance.
Staking could be an attractive way for investors to put their assets to work rather than stashing them away in a cryptocurrency wallet, the digital equivalent of stuffing money under the mattress.
Going solo or pool
While the biggest rewards come from becoming a full while learning earn crypto it also requires a sizeable minimum investment. For some investors, therefore, going solo may not be a more practical option. A simpler and cheaper way to dip your toe into staking could be staking pools.
A staking pool is where coin holders can form a group by combining their resources, known as pooling. By consolidating their assets, they can improve their chances of validating blocks and earn rewards in return.
However, relative to solo staking, a staking pool offers a smaller yield because each validation reward is divided among the participants who staked their assets.