Staking cryptocurrencies can be done in different ways, using different networks, and for different goals. However, they all have one thing in common: Staking tokens will recurrently reward their holders for a proportional share of each of their stakes on the network or application.
This happens because investors trade their liquidity — by locking their tokens under specific rules set by the protocol they are staking at — for the right to directly participate in the system, which can be as validators of a Proof of Stake (PoS) consensus, a protocol’s governance or even by providing liquidity to a decentralized exchange, a lending platform, or to a collateralized asset. Moreover, liquidity has a cost, that is translated into the so-called ‘passive income’.
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Ethereum (ETH) staking stats. Source: StakingRewards.com
Notably, there is a total of $44.57 billion staked on Ethereum at the time of publication, which equals 22.15% of ETH’s market cap of $200.74 billion. In the last 24 hours, there was a surge of close to 14% in the amount of staked tokens in the network.
Tezos (XTZ)
“Tezos is a blockchain platform that uses a PoS consensus mechanism. XTZ holders can stake their tokens and participate in the network’s governance while earning staking rewards. Tezos is known for its on-chain governance and the ability for token holders to vote on protocol upgrades.”
— ChatGPT-4By staking XTZ, investors are expected to earn a yearly rate of 5.18% over the staked amount, in the current state of the network. Nevertheless, the ‘real reward rate’ calculated by StakingRewards.com shows that the yield is actually 0.92% after discounting the token inflation.
Tezos (XTZ) staking stats. Source: StakingRewards.com
Meanwhile, Tezos holders have been unstaking their tokens by 17.17% in the last 24 hours. It is also important to note that despite having a market cap of $644.87 million by press time, 71.79% of that accrues for staked XTZ, for a total staked value of $476.16 million.
Cardano (ADA)
“Cardano is another popular cryptocurrency that uses a PoS consensus mechanism. ADA holders can stake their tokens in the Cardano network and participate in the process of block validation and creation. Staking ADA allows participants to earn rewards.”
— ChatGPT-4As of October 7, the Cardano network is rewarding close to 3% per year to its stakers, also according to StakingRewards.com data gathered by Finbold. This represents the lower yield among these three picks by ChatGPT-4, which gets even lower when adjusted with ADA’s token inflation, for an expected reward of 0.39% in the long run.
Cardano (ADA) staking stats. Source: StakingRewards.com
With a staking market cap of $6.08 billion in ADA, Cardano stakeholders represent a share of 63.32% of the total market cap for its native token. At the time of publication, the staking trend is also negative, like Tezos, with a 12.9% outflow.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
