Activity in digital currency markets is not only limited to buying and selling digital currency or investing in them. Rather, the methods of earning DeFi income are of high variety, and one of these methods that we are going to discuss in the rest of this article is digital currency staking. It is better to know that the digital currency staking method is one of the oldest methods of passive income in the digital currency market. To make money from this method, we must first talk a little about making money by staking digital currency, and then we will refer to the training of digital currency staking.
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What is digital currency staking?
Before we start teaching digital currency staking, we need to look at community protocols in the blockchain network to get information about the relationship between these two. These protocols are used to increase security in the blockchain network. For example, in the Bitcoin blockchain network, the proof-of-work consensus protocol or pow is used for security. To mount this protocol on the network, digital currency mining is required. Also, to extract digital currency, a system with high processing power and high hardware power is needed, and the cost of obtaining such a system is very high.
In some other blockchain networks, Proof of Stake consensus protocol is used to maintain network security and improve its performance. This protocol is done along with the deposit of network users or DeFi decentralized platform. Also, if you are looking for the best ways to generate income from decentralized assets, you can refer to the article on making money in DeFi. Its function is that users lock some of their assets in a special gif money. Therefore, as much as the amount of locked assets of these users is greater, they have the right to participate in network validation more than the rest of the people.
To know why people do this cryptocurrency staking? It is better to know that the more assets are locked in the network, the more rewards are given to the user. Also, the amount of bonus that is awarded to these people depends on the duration of the deposit, the type of network and the amount of assets.
Read more: Validation Algorithm
The best digital currencies for staking
The number of digital currency stinkers is countless, but for many of them, they are not very reliable and may not be a good option to start depositing on them. In the following, we will mention some of the best digital currency staking to generate income by staking digital currency.
After Bitcoin, the most popular and best digital currency is Ethereum. In its initial version, this digital currency was based on the proof-of-work protocol. But in its updated version, it has changed its protocol with proof of stake. For staking digital currency in the Ethereum network, you need to lock at least 23 Ethereum in the network.
Tezos follows the Proof-of-Stake consensus protocol with XTZ cryptocurrency. Digital currency staking in this blockchain network has no restrictions. It means that you can start depositing in this network with an XTZ digital currency. Profitability in this network is usually done in a period of 35 to 40 days, and the annual staking rate of the Tzoosh blockchain network is 6.75 to 10.6 percent.
Another popular digital currency that you will not face any restrictions for staking in its network is Binance Coin. In this network, the profit rate is available every 7 days, and the annual deposit interest rate is from 6 to 9 percent. This exchange is one of the platforms that offers traditional crypto loans to its users.
Cake is the exclusive digital currency of Pancake Swap decentralized exchange. It is better to know that for staking of this exchange, you must connect your digital wallet of TrustVault, Metamsk and Yinance Wallet of China to this decentralized exchange. Also, the annual deposit interest rate of this network is 14%.
This token is known as the native token of this exchange in the Palikan blockchain network. It is better to know that it is one of the main competitors of the Ethereum network. To participate in the validation, you must first connect your Metamask wallet to Palikan network and you must have at least 2 Metic tokens in this wallet. The annual profit rate of this network is 14%.
Read more: Fork in digital currency
Digital currency staking training in different ways
In the continuation of this article on staking digital currency in different ways, we want to discuss several staking methods such as cold staking, locked staking and finally flexible staking.
This method is mainly used for large capitals. This is how you lock your capital in your offline or cold wallets, and their profits remain as long as this capital is in your wallet. Whenever you intend to withdraw your assets from your wallet, the interest will be calculated for a period of time and then deposited into your account. It is better to know that this method has high security and therefore it is mostly used for many assets.
Sticking is locked
In this deposit method, you stake your assets in your exchange wallet. After that, your profit will be calculated daily. In any period of time that you intended, you can withdraw your capital from the deposit mode and see the total profit of your deposit days. Keep in mind that in some digital wallets, they have a specified period of time for depositing and It is not possible to withdraw before that time.
In this article, we explained depositing or staking to you and said that by locking their assets in a special wallet, users can receive rewards for the locked time of this asset, which, of course, depends on the type of network and the amount of assets that you deposit. It is related. In the following, we named the currencies for you, such as: Ethereum, Tezos, Binance Coin, Kik and Metic, which are the best currencies for staking, and we also explained the different methods of staking.