Did you know your cryptocurrency can earn money for you while you sleep? This is called Staking. Instead of letting your coins sit idle in a wallet, you can lock them up to support a blockchain network and earn rewards in return.
How Staking Works Think of it like a Fixed Deposit (FD) in a bank. You lock your funds for a specific period, and the network pays you interest (APY).
Pros and Cons of Staking
- Pros:
- Passive Income: Earn anywhere from 5% to 20% APY depending on the coin.
- Network Support: You help secure the blockchain.
- Easy to Start: Many exchanges like Binance or Kraken offer one-click staking.
- Cons:
- Lock-up Periods: You cannot sell your coins while they are staked.
- Market Volatility: If the coin price drops significantly, your rewards might not cover the loss in value.
Is it Worth it? If you plan to hold a coin for the long term (HODL), staking is a no-brainer. It increases your coin count regardless of the market price.