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It’s already December, and the holiday season will soon be upon us. Is there a better time to make plans for the next year and round up what was achieved this year? This time, the ChangeHero team would like to present you with a list of the best staking coins to earn staking rewards in 2024.
Key Takeaways
- Crypto staking is the activity of locking up a certain amount of crypto tokens in the protocol as a pledge to ensure the network’s integrity and earn staking rewards in the process.
- Staking can be considered a way to earn passive income but one that still requires participation. You will need to check the status of the validator node that holds your stake or claim the rewards once in a while to manually compound the deposit.
- The ChangeHero team reviewed the PoS coins and came up with a list of the ten best staking coins. In our opinion, they can blow up in 2024 or have healthy staking mechanisms that multiplied gains or dampened losses in 2023.
Short Primer on Crypto Staking
What is staking?
Staking in crypto is a part of the mechanism responsible for network integrity and security: consensus. Proof-of-Stake (PoS) is a consensus mechanism in blockchain networks, including Ethereum 2.0. Unlike Proof-of-Work (PoW), which relies on miners solving complex mathematical puzzles to validate transactions and create new blocks, PoS selects validators based on the amount of cryptocurrency they hold and are willing to “stake” as collateral. Validators are chosen to create new blocks and validate transactions based on their stake, with rewards proportional to it. PoS aims to be more energy-efficient and secure by reducing the computational power required, making it a greener alternative to PoW, among other things.
Are staking rewards really passive income?
Staking is often talked about as a way to earn passive income, or money that you earn without actively working for it. It is a way to generate income on an ongoing basis with minimal effort or time commitment. Instead of trading your time for money, passive income allows you to make money even when you’re not actively working. Examples of passive income include rental income from properties, dividends from stocks, interest from savings accounts, or royalties from creative works like books or music.
Crypto staking is often presented as a similar method of earning money virtually without any work. You make a transaction and then reap the rewards — what could be easier, right? Of course, this would be too good to be true, and in reality, there are caveats.
Solo staking is certainly a more hands-off approach than day trading on a crypto exchange, for example. However, to start staking coins solo, you will most likely need dedicated hardware, which you will need to keep up and running. Stakers running a validator node will also be expected to keep up with the community and participate in the governance process by regularly voting.
But you can delegate your coins or join a staking pool, can’t you? Sure, you are doing exactly that if you are staking via a crypto wallet or using the exchange staking feature. In this case, you are still expected to check your staked coins and validator: are they online? Did they update their fees or voting policies? Is their network dominance share adequate — not too large and not too small? A lot of crypto coins do not even compound the stake on their own, so you most likely will need to check it yourself once in a while.
Depending on how you view it, you can see staking cryptocurrency as a way to earn passive income. There is a common misconception that staking crypto does not require any effort at all, but there is prior research to be undertaken and risks that you should constantly keep in check.
Does staking have any risks?
Staking coins is by no means a risk-free way to get free money. It is a mechanism that rewards honest validators but in most cases, also punishes misbehaving ones. Stake slashing can be caused by the node going offline even temporarily, a miscalculation or misconfiguration that leads to double-signing, and neglecting to vote. As a result, as much as the entire stake can get taken away or burned, even if the staked funds were delegated.
It also needs to be mentioned that staking coins is not a remedy for market volatility. Value losses can also wipe out any profit made with staking. This can be especially hurtful considering that usually, you can’t withdraw staked assets right away.
Last but not least, while not exactly a risk but rather a feature of some protocols, you should check the supply dynamics of the particular crypto and where do the staking rewards come from. If they come from newly minted coins, it should set off alarms: unless the APR realistically exceeds the inflation rate, you are actually losing on investment due to token supply dilation.
Most Promising Staking Coins According to the ChangeHero Team
Now that we have briefly talked about what staking is and what it isn’t, let’s move on to our team’s list of the best staking coins for 2024. They are not necessarily the ones that promise the highest staking benefits or even the ones that finish 2023 with a profit. Instead, we focused on the top staking coins that we think have the potential to perform well in 2024.
Secret Network (SCRT)
Staking Secret Network in 2023 was not enough to alleviate the brutal price drop. We still consider it a cryptocurrency with potential that can make a comeback in 2024.
Secret Network, also known as Secret, is a blockchain platform that focuses on privacy-preserving smart contracts and decentralized applications (dApps). It achieves this by utilizing secure and encrypted computation techniques. By enabling developers to build privacy-focused applications, Secret Network aims to protect sensitive data and provide users with enhanced privacy and control over their personal information.
Secret Network uses a flexible inflation and rewards system that adjusts the staking rewards rate according to how many validators are online. According to Staking Rewards, at the time of writing the APR is 27.57% but this is before adjusting for the 17.4% inflation rate. This makes the real reward rate closer to 8.66%. In 2023, Secret (SCRT) in comparison to a year ago lost 56.6% in price but if you had these tokens staked, the loss is slightly smaller: only 44.7%.
Algorand (ALGO)
Algorand is not among the crypto staking coins with flashy rewards. However, due to its tokenomics, it deserves consideration for a modest annual percentage yield (APY).
Algorand (ALGO) is a decentralized blockchain platform that aims to provide a scalable and secure infrastructure for developing decentralized applications (dApps) and financial systems. Built using a pure proof-of-stake consensus algorithm, Algorand ensures fast and efficient transaction processing while maintaining decentralization and security. With its focus on scalability, low transaction fees, and strong security measures, Algorand aims to address the challenges faced by traditional blockchain networks and accelerate the adoption of decentralized technologies.
Algorand in 2023 uses Governance Rewards to incentivize users who choose to engage in governing the Algorand protocol. Simply holding ALGO is not enough now to be eligible for staking rewards but the new program essentially works as other staking systems, allowing one to earn rewards passively. The rewards come from a vested supply of ALGO, meaning that even though currently there is a 1.59% inflation rate, it is set to stop once the circulating supply of Algorand reaches 10 billion. With this in mind, at the time of writing the real reward rate for delegating ALGO is 4.59%.
Cosmos (ATOM)
With the Cosmos Ecosystem positively booming in 2023, Cosmos Hub itself is primed for a decent run in 2024. ATOM’s milquetoast price performance soured the satisfaction of growing token holders’ bags but in the end, they are still in the black.
Cosmos (ATOM) is an interoperable blockchain platform that facilitates communication and interaction between different blockchain networks. Cosmos aims to enable the seamless transfer of assets and data across multiple chains by providing a framework for building interconnected blockchains. With its focus on scalability, security, and flexibility, Cosmos aims to overcome the limitations of individual blockchains and create a decentralized network of interconnected blockchains, fostering innovation and collaboration in the blockchain ecosystem.
Even after a disastrous 2022 which wiped out almost half of the value of the Cosmos ecosystem through the Terra (LUNA) crash, in 2023 it was on the mend. New projects entered the spotlight: Cronos, Kava, and THORChain being the top three. The native token of the central blockchain connecting them all, ATOM, is a popular and promising staking coin.
ATOM is also one of the examples showing why staking crypto is worth it. If one year ago you had a certain amount of ATOM but didn’t stake it, today it would be worth 7.49% less. If you staked tokens, however, the total would be worth 12.3% more today. Cosmos (ATOM) also has inflation, and a rather high one at that (9.5%), but thanks to high network activity, the rate of staking rewards coming from network fees brings the real reward rate up to 4.64%.
Ontology (ONT)
In terms of ROI for both staking and holding, Ontology holders profited in 2023. This was possible thanks to a uniquely high real reward rate with supply dilution offset to the companion asset.
Ontology (ONT) is a high-performance blockchain platform that aims to bridge the gap between traditional systems and the decentralized world. It provides a comprehensive infrastructure for building and deploying decentralized applications (dApps) and smart contracts. With a focus on privacy, identity, and data management, Ontology aims to enable secure and trusted interactions between individuals, businesses, and institutions.
The Ontology network rewards stakers with the gas token ONG and some ONT from the Ontology Foundation bonus, if eligible. The best results will be achieved by running a node yourself and not delegating, since the node operators take a cut from all rewards from staking. When recounting the ONG rewards plus the ONT rewards from staking, the total can come up to 27.19% APR and the yearly ROI from both activities is at the time of writing 43.1%.
Band Protocol (BAND)
Oracles remain a viable use case for blockchain protocols, and especially so for the growing Cosmos ecosystem. Provided Band Protocol does better in 2024, staking BAND has all the chances to bring profit.
Band Protocol (BAND) is a decentralized oracle platform that aims to bring real-world data and APIs to the blockchain. By connecting smart contracts with external data sources, Band Protocol enables the development of decentralized applications (dApps) that can securely access and utilize off-chain information. With its focus on reliability, scalability, and interoperability, Band Protocol aims to provide a robust infrastructure for the creation of dApps across finance, gaming, and supply chain management.
Staking BAND works a lot like ATOM, which we have covered already: its block reward ratio is also dynamic at 7–20% depending on the number of staked coins. At the time of writing, according to Cosmoscan, the inflation rate is 7.7% and staking APR is 11.41%. This makes the real reward rate about 2.61% but due to its dynamic nature, users who staked BAND a year ago get 11.2% ROI extra. Unfortunately, the poor price performance exceeded these gains but thus BAND shows that even though crypto staking is not always profitable, it can serve to soften the blow.
Solana (SOL)
Once an Ethereum killer, in 2023 Solana is still alive and kicking and shows no signs of slowing down come 2024. Users wishing to stake Solana have good chances of ending up with profit but should keep an eye on the inflation rate.
Solana (SOL) is a high-performance blockchain platform designed for fast and secure decentralized applications and cryptocurrencies. Built with innovative technology, Solana aims to overcome scalability limitations by employing a unique combination of Proof-of-History (PoH) and Proof-of-Stake (PoS) consensus mechanisms. With its high throughput and low transaction fees, Solana provides a reliable infrastructure for developers to build and scale decentralized applications across various industries, such as decentralized finance (DeFi), gaming, and decentralized exchanges (DEXs).
To a tech-oriented project like Solana, staking is not a marketing stunt to attract more users but a real safety measure, so they never promise unsustainable returns. The staking rewards validators get come from new coins but their issuance rate is decreasing by 15% each year. In 2023, it is 6.97%, and in 2024 it is going to decrease even further.
Solana auto-compounds the stake innately, so you do not have to use any third-party staking platform. The hardware requirements for running a Solana validator node are steep so joining a staking pool is also a valid alternative. In any case, most of the 2023 ROI in Solana (SOL) came from its 329% appreciation, and the 9.18% ROI on staking SOL is just a nice bonus.
MultiversX (EGLD)
The appreciation fuelled by a rebrand together with a smart staking program made a profit for EGLD stakers in 2023. The new name and extended scope promise even more rewards and big things for MultiverX in 2024.
EGLD is a cryptocurrency that powers the MultiversX (previously Elrond) platform, a blockchain-based ecosystem designed to provide secure and scalable solutions for decentralized applications. Using a combination of innovative technologies, including sharding and a secure proof-of-stake consensus mechanism, MultiversX aims to offer high throughput and low latency for seamless user experiences.
Depending on how much time, research, and resources you are willing to dedicate to staking EGLD, you can choose from simply delegating to running a validator node. The current real reward rate with a 7.42% inflation rate is about 1.84% but in July 2024, the inflation will further decrease to 6.27%. Even in 2023, the ROI from both price and staking add up to 23%, and if MultiversX can deliver on its ambitious goals, together with reduced inflation, 2024 looks even more promising.
Avalanche (AVAX)
Anyone following the Avalanche-related news knows that in 2023 this L1 achieved new heights even while being out of the spotlight. This quiet builder is already one of the leaders in the L1 race and is on a great track into 2024.
Avalanche (AVAX) is a decentralized platform that aims to provide a secure and scalable ecosystem for the creation and execution of decentralized applications (dApps) and enterprise blockchain solutions. Powered by a Proof-of-Stake consensus protocol of the same name, the platform offers high transaction throughput, low latency, and customizable governance features.
It won’t be until 2030 that inflation will be out of the picture for AVAX. At the time of writing, it floats around 5.3%, bringing the real reward rate to a modest 3.21% APY. Nevertheless, the price of AVAX has risen over 2023, making AVAX staking profitable.
Polygon (MATIC)
As popular as Polygon is, staking MATIC is hardly a way to earn tangible passive income. Nevertheless, it is still one of the best PoS coins with a solid use case, and staking MATIC is a win-win for everyone.
Polygon (long ago known as Matic Network) is a Layer 2 scaling solution for Ethereum that aims to improve scalability, interoperability, and user experience on the Ethereum network. By using sidechains, Plasma frameworks, and a decentralized network of validators, Polygon enables faster and cheaper transactions while maintaining a high level of security.
Being secured by Proof-of-Stake, Polygon lets any MATIC holder earn staking rewards by delegating a stake or running a validator node. Since MATIC is a utility token of Polygon, it compensates validators for running nodes and gives an incentive to participate rather than entices token holders with a way to boost their crypto holdings. As a result, its reward rate is relatively low — 4.3% — and adjusted for inflation is only 2.5%.
In 2023, despite all the positive developments, Polygon (MATIC) ended up worth 15% less than a year ago. Staking rewards bring this down to 10.5%, provided it has been compounded. So why do we believe Polygon (MATIC) is one of the best staking tokens? Polygon is among the leading Ethereum scaling solutions, showing no signs of stopping in 2024, and MATIC is about to enter circulation fully, meaning no more inflation.
Ethereum (ETH)
At the end of the day, you can’t go wrong with Ethereum! On the surface, it is not the most accessible crypto to stake and certainly not the one promising the best profits. Regardless, as the leader of the Proof-of-Stake coins, in 2023 it demonstrated great results and is not planning to unwind anytime soon.
Ethereum (ETH) is a decentralized, open-source blockchain platform that enables the creation and execution of smart contracts and decentralized applications (dApps). It was proposed by Vitalik Buterin in 2013 and launched in 2015. Ethereum’s native cryptocurrency, Ether (ETH), is used for incentivizing participants and powering the network. With its robust infrastructure and programmable capabilities, Ethereum has become the foundation for a wide range of innovative projects, including decentralized finance (DeFi), non-fungible tokens (NFTs), and decentralized exchanges (DEXs).
ETH is also the largest Proof-of-Stake coin by market capitalization at the moment. In our previous guide, we talked at length about the best ways to stake ETH and boost the Ethereum staking rewards. Long story short, one can earn about 4–5% annually staking with virtually no lower limit. On top of that, Ethereum (ETH) by itself has the combination of a strong value proposition and practical acknowledgment of it, which makes it not just one of the good staking coins but one of the must-have crypto assets. Don’t take our word for it: if you staked Ether a year ago, today your position has gained 81.46%.
Conclusion
The entirety of our best crypto staking coins list is here to tell you: in most cases, you are better off staking coins than not. It can multiply your profits in the best-case scenario, and in the worst case, you will lose much less than simply holding.
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Frequently Asked Questions
Which crypto is best for staking?
When it comes to staking cryptocurrencies, there are several options to consider. Some of the popular choices for staking include Ontology (ONT), Secret Network (SCRT), and Ethereum (ETH). Each of these cryptocurrencies has its unique features and potential rewards, so it’s important to research and evaluate which one aligns best with your investment goals and risk tolerance.
Which coin is best to stake on now?
At the time of writing, the best staking coin in terms of real reward rate is Ontology (ONT). It should be noted that this staking protocol gives another asset, ONG instead of rewarding users with the same token, as other staking coins do.
Which crypto gives the highest staking rewards?
According to Staking Rewards, in terms of raw reward rate (108%), AssetMantle (MNTL) is the best staking crypto. However, its inflation wipes off most of the gains. In terms of real reward rate, Ontology (ONT) is one of the best staking options.
