Earning Rewards with Staking Tokens
Stake your crypto to earn rewards.What is Staking?
Cryptocurrency has several methods by which it gains value. You are familiar with both of these methods. Think of a crypto coin as a stock. You purchase the stock at a low price and sell it at a higher price and you profit the difference. This is the same with cryptocurrency.
Another way to increase value of your cryptocurrency portfolio is through “staking”. There are complicated reasons that explain exactly what staking is and how it works. But they are not necessary to understand. Staking, simply stated, is earning interest on your cryptocurrency coins in account.
In order to earn interest you must “stake” your coins. This allows the coin’s finance network to use your money and they pay you interest in return. Some exchange do not require staking and pay rewards simply for maintaining certain coins in your wallet. The list below contains the current coins Broken Box Sanctuary maintains in its portfolio.
Cosmos (ATOM)
Cosmos also known as ATOM, was built on the idea of creating an internet of blockchain. It is a completely decentralized ecosystem of independent blockchains such as Byzantine Fault Tolerant and Tendermint algorithms. Cosmos is also known to be more scalable and customizable platform. It uses a Delegated Proof of Stake where there are delegators and validators. The delegators are the ones who decide who will participate in the validating the transactions and then those validators validate the transactions and add new blocks to the blockchain. Both the delegators and validators are paid in the form of ATOM tokens.
Cosmos earns rewards between 5%-11% depending on where they are staked. Currently the Atomic Staking Wallet pays the highest reward between 10%-11%. ATOM can also be staked via a Ledger hardware wallet. Cosmos can also be staked on Kraken.com and Binance.us.
Tezos (XTZ)
Tezos is the a blockchain project which launched in 2018. It is a multi-purpose platform which supports both dApps and Turing contracts. Tezos is powered by the XTZ cryptocurrency which leverages a process called baking which is like staking. So, in terms of staking, tezos works like baking where the bakers stake their coins to validate transactions and add new blocks. When a baker allows a fraudulent activity to happen just validate new block, he/she will lose their stake. To get a Tezos, a full roll of XTZ is required which is 8000 as the users are required to run their own full node. Some third-party platforms are aiding users, but they take 20% – 25% of the staking rewards which is not much feasible. But Tezos has become one of the most growing crypto platforms because of their high annual yields.
Tezos can be staked in many places including Kraken.com and Binance.us. Tezos may also be staked for a Ledger hardware wallet. Unlike most Proof-of-Stake tokens Tezos is a liquid POS. Tezos may be unstaked without a holding period, allowing it to be unstaked and sold immediately. Tezos rewards are between 5%–7%.
Algorand (ALGO)
Algorand was created as a decentralized and permissionless blockchain, the main goal was to make the cryptocurrency borderless and to solve the issues people face while buying and selling cryptocurrencies. The platform leverages Pure Proof of Staking(PPoS) algorithm which is unlike other Proof of Staking algorithms which have delegators and have power to avoid problems from a set of users. Algorand have tolerance for malicious users until a point where majority of blocks are being affected. The aim is to solve the problem of scalability and providing decentralization and security to the users. Users can also leverage its ability to create decentralized applications which can provide a reported throughput of 1000 transactions per second leaving the reason of using dApps and the developers are now more attracted to it. There is no need for users to run their own nodes, users only need hold some ALGO coins in a custodial wallet and they are eligible to the staking rewards every time a new block is added.
Algorand can be staked on Binance.us or via a Ledger hardware wallet. Algorand pays 5% rewards.