Looking for the best cryptocurrencies to stake? In this guide, we’ll walk through the best options to help you earn a passive income!
Many cryptocurrency staking guides promote unknown cryptocurrencies with high token inflation — which means the staking rewards you receive are lower than the stated value. Our experts put together this list to help investors find reputable projects with high real reward rates.
Disclaimer: This blog does not constitute investment advice. Please do your own research and talk to your financial advisor before buying and/or staking any crypto-asset.
Quick Look
- BNB: Real reward rate: 7.43%
- Cosmos: Real reward rate: 6.95%
- Polkadot: Real reward rate: 6.11%
- CRO: Real reward rate: 5.24%
- Algorand: Real reward rate: 4.5%
- Ethereum: Real reward rate: 4.11%
- Polygon: Real reward rate: 2.58%
- Avalanche: Real reward rate: 2.47%
- Tezos: Real reward rate: 1.58%
- Cardano: Real reward rate: 0.55%
Methodology
Our panel of experts picked the following cryptocurrencies on a variety of factors — such as reputation, trust, and real reward rate.
We chose projects that have been successful in the past and offer positive ROI to investors after adjusting for token inflation.
Remember, inflation can decrease the value of your staking rewards. Unlike other guides that rank projects by nominal reward rate, we took token inflation into account to give readers a more accurate understanding of the rewards they’ll be receiving.
The 10 Best Cryptocurrencies for Staking
The cryptocurrencies below are ranked by real reward rate at the time of writing.
BNB
Real reward rate: 7.43%
BNB is the Binance exchange’s native cryptocurrency. Holding BNB on Binance comes with numerous benefits — such as an up to 25% discount on spot trading fees.
The Binance exchange offers the ability to stake BNB on the BNB vault — which combines rewards from multiple different sources!
If you’re thinking of investing in BNB, you should keep an eye on news developments. In November 2023, Binance came under scrutiny following the arrest of former CEO Changpeng Zhao. It’s possible that further developments in this story will lead to a decline in the price of BNB.
Cosmos
Real reward rate: 6.95%
Cosmos aims to create a network of blockchains that are able to communicate with each other in a decentralized fashion. When you stake ATOM, Cosmos’s native cryptocurrency, you can earn rewards and power this Internet of blockchains!
You can stake ATOM directly using decentralized wallets like Keplr.
Polkadot
Real reward rate: 6.11%
Polkadot is a blockchain designed to facilitate cross-blockchain transfers of data and assets. The blockchain also offers generous staking rewards to users!
Experienced investors can stake cryptocurrency on Polkadot.js — however, the minimum to get started is 10 DOT. Alternatively, you can stake Polkadot using nomination pools on the Polkadot staking dashboard — where the minimum staking requirement is 1 DOT.
CRO
Real reward rate: 5.24%
CRO is Crypto.com’s native cryptocurrency. CRO offers high staking rewards — as well as additional benefits like higher cashback rewards for Crypto.com debit card users.
You can get started staking CRO on Crypto.com.
Algorand
Real reward rate: 4.5%
Algorand is a blockchain platform designed to process transactions instantly.
Algorand uses a unique consensus mechanism known as pure proof-of-stake (PPoS). That means you don’t need to stake ALGO with a validator or a staking pool to get started earning rewards — you can earn rewards simply by holding ALGO on a wallet like MyAlgo!
However, you’ll earn much higher rewards by connecting a supported wallet to the Algorand Governance platform, staking Algorand, and participating in the governance process.
Ethereum
Real reward rate: 4.11%
Ethereum is the world’s most popular Proof-of-Stake (PoS). While other cryptocurrencies offer higher staking rewards, staking ETH is a great option for investors who are comfortable with a well-known and popular cryptocurrency.
To get started with a validator node for staking, you’ll need 32 ETH. Luckily, there are alternatives for investors who don’t have this amount of cryptocurrency.
One option is to use a staking service like Coinbase to stake Ethereum. Alternatively, you can use a pooled staking protocol like Lido.
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Polygon
Real reward rate: 2.58%
Polygon is a Layer 2 solution for the Ethereum blockchain offering low fees and fast transaction times.
You can stake Polygon through your MetaMask wallet on the blockchain’s official staking platform.
Avalanche
Real reward rate: 2.47%
Avalanche is a smart contract blockchain that uses the Avalanche consensus mechanism to offer low fees and fast transaction times. Currently, there is more than 4 billion worth of AVAX staked by users!
You can stake your AVAX directly through the Avalanche wallet. At this time, the minimum stake is 25 AVAX.
Tezos
Real reward rate: 1.58%
Tezos is an open-source blockchain originally launched in 2017. While the blockchain’s native cryptocurrency has a relatively high inflation rate, Tezos staking still offers positive real rewards.
You can get started staking Tezos on wallets like Atomic Wallet and Guarda.
Cardano
Real reward rate: 0.55%
Cardano is one of the most popular smart contract blockchains. While Cardano offers a relatively low real rewards rate, staking is still a great option for existing Cardano holders to earn passive income.
You can stake Cardano on wallets like Daedalus and Yaroi. For more information, check out our guide to the best Cardano staking platforms.
Are high staking rewards too good to be true?
While there are plenty of reputable coins and projects that offer staking rewards, it’s important to be cautious before getting started with staking.
Many cryptocurrency projects that offer high staking rewards often have high levels of inflation — meaning that the ‘real’ value of the cryptocurrency you’re receiving is lower than the stated reward rate.
It’s important to do research on the cryptocurrency you are staking before getting started. In the past, some cryptocurrency projects that have offered high staking rewards have suffered large collapses. Examples include Terra/Luna and OlympusDAO.
Is Solana good for staking?
Solana is an established project and a popular option for staking. While the project offers a 7% interest rate at the time of writing, the real interest rate is -0.05%! Because of the negative real reward rate, Solana did not make the cut for recommended cryptocurrencies for staking.
How does cryptocurrency staking work?
Proof of Stake (PoS) is a consensus mechanism used by certain cryptocurrencies to validate transactions and add new blocks to the blockchain. Here's a simplified version of how staking works:
- Stake Crypto: Users lock up a certain amount of cryptocurrency as their stake.
- Validate Transactions: Stakers are chosen to validate transactions and create new blocks based on the size of their stake and other factors.
- Earn Rewards: Validators earn rewards for their contribution to network security.
The Pros and Cons of Staking Crypto
Let’s walk through some of the pros and cons of cryptocurrency staking.
Pros
- Passive Income: Staking provides a way to earn rewards from your existing holdings.
- Stable Earnings: Compared to other forms of crypto income, staking often offers more stable and predictable returns.
- Compound Interest: Many staking platforms allow your earnings to compound, potentially increasing your returns over time.
Cons
- Protocol penalties: Some blockchains have slashing penalties for stakers who violate the blockchain’s rules.
- Lock-up Periods: Staking often requires locking up assets — which means that you may be unable to sell off your crypto during a downturn.
- Risk of Loss: The value of your staked cryptocurrency may collapse — especially if you’re investing in a less reputable project. Unfortunately, investors who staked Terra and Luna lost millions of dollars.
How is cryptocurrency staking taxed?
Cryptocurrency staking is taxed as income based on the fair market value of your crypto at the time of receipt.
If you dispose of your staking rewards in the future, you’ll incur a capital gain or loss depending on how the price of your crypto has changed since you originally received it.
For more information, check out our guide to cryptocurrency staking taxes.
Other Ways to Earn Crypto Passive Income
Looking for other ways to earn passive income from cryptocurrency? Here are a few more methods:
- Cryptocurrency Interest Rewards: Many exchanges offer interest rewards for simply holding certain cryptocurrencies. For example, Coinbase offers 5% rewards for simply holding USDC in the exchange.
- Crypto Lending: Some crypto lending platforms — such as Compound — allow you to earn money by lending cryptocurrency to borrowers. However, there are risks of platform bankruptcy, and funds can be illiquid.
- Play-to-Earn Games: Games like Axie Infinity allow users to earn crypto rewards. However, they often require an upfront investment and a significant time investment to earn major rewards.
- Crypto Affiliate Programs: By promoting crypto-related products or services, you can earn commissions. While affiliate programs are a great way to earn money, affiliate marketing is competitive!
Why is the US cracking down on staking platforms?
In recent years, the SEC has cracked down on cryptocurrency platforms offering staking in the United States. In 2023, Kraken settled with the SEC for $30 million and closed its staking services.
The SEC has argued that staking-as-a-service is an unregulated security. As a result, many investors are choosing to instead use decentralized wallets and exchanges to stake cryptocurrencies and earn rewards.
