The best place to stake crypto depends on a few key factors. This article will help you determine which place is best for you!
Staking crypto is a great way to participate in the ecosystem and also put your coins to work for you! Finding the best place to stake crypto, ideally somewhere you feel comfortable and safe earning rewards, is one of the first and most important steps in your crypto journey.
Staking refers to "locking up" your tokens with a validator to help secure the blockchain. The more tokens a validator has, the more rewards they will earn. In return for locking your tokens with a validator, you receive a portion of the rewards that the validator earns for securing the network.
It's important to note that staking is not risk-free! For example, if you lock your tokens up with a validator that goes offline frequently, you will miss out on earning rewards. Worse, if the validator you lock your tokens with acts maliciously and tries to pass bad transactions, you could lose some of your tokens due to a penalty called “slashing.”
When it comes to staking crypto, there is no shortage of options, but it's essential to stake with a reliable validator.
So how do you find the best place to stake?
Every major exchange offers staking services, but each has unique features. For example, most charge fees and some offer special features, such as instant unlocking.
While centralized exchanges have the best user experience, they also require users to pay fees and come with security risks. Therefore, most users should instead opt for a private wallet to earn more rewards and qualify for airdrops.
This article covers the best places to stake crypto for beginner, intermediate, and advanced users.
Let's dive in!
If you're a beginner looking to dip your toes into DeFi before taking a full dive, the most accessible place to stake is a centralized exchange. The main benefit of staking on an exchange is the ease of use. All you need to do is click the 'stake' button.
The main drawback to staking on an exchange - and why you should eventually graduate to a private wallet - is that the exchange takes a large cut of your rewards for doing very little.
While it can make sense for a beginner to stake a small amount of crypto on an exchange, ultimately, centralized exchanges are not the best place to stake crypto. Therefore, if you do stake on an exchange, only stake a little, and plan to move on to a better solution as soon as you feel more comfortable.
Among exchanges, Kraken is our top exchange on the list of best places to stake crypto for three important reasons:
While Binance's rates are not quite on par with Kraken's, it is the largest crypto exchange in the world and deserves a spot on the list of best places to stake crypto.
The main advantage of staking on Binance is flexible lockup periods. When staking on Binance, users can decide how long they want their tokens to be locked. Users can earn higher staking rewards by choosing a longer unbonding period. They can also choose to have faster and even instant unbonding periods for a lower return.
Two drawbacks of staking on Binance include:
Uphold is one of the best places to stake crypto simply because it has more options than any other exchange. Uphold offers staking of 23 cryptocurrencies far outpacing more prominent exchanges like Coinbase and Binance.
Uphold offers competitive rates that have their fees built in.
However, we recommend using caution when it comes to exchanges like Uphold that offer so many coins, especially if they offer incredibly high staking reward rates.
Uphold, for example, allows users to earn as much as 25% on some tokens. When rates are that high, it usually means that the network has high inflation, and the value of the tokens is likely to decrease, negating what you earn via staking.
Once users are ready for a self-custody solution for storing and staking crypto, the easiest step is to use a software wallet. Software wallets are applications you can install on your computer or mobile device. They're free to use, easy to set up, and allow users to retain full custody of their crypto.
The main drawback to a software wallet is that it is vulnerable to phishing attacks. If a hacker gains access to your computer, they could steal your crypto. Software wallets also give users less control than hardware wallets.
The Trust Wallet is available on desktop computers and mobile devices. It allows staking in 12 different crypto assets, with more coming soon.
The Trust Wallet was acquired by Binance in 2018 and allows users to integrate with the exchange easily. In addition, users can also connect directly to multiple blockchain-based applications like lending protocols and decentralized exchanges.
The Exodus Wallet comes in three versions: a software application on your desktop computer, a browser extension, and a mobile application. It also allows users to integrate easily with Trezor hardware to have the highest level of security.
Exodus is one of the best places to stake crypto because it supports staking in 7 different cryptocurrencies. In addition, users can stake and unstake at the tap of a button. This feature makes Exodus extremely easy to use, allows users to retain full custody of their crypto, and doesn't require users to pay additional fees.
Another nice feature of the Exodus Wallet is a built-in exchange that allows users to swap one token for another without leaving the app.
One drawback to the Exodus Wallet is that, as of November 2022, it does not support staking Ethereum.
If you're ready to take the full plunge into DeFi, the best place to stake crypto is a hardware wallet. Hardware wallets offer the highest level of security while also giving users complete control of their digital assets, including NFTs.
Hardware wallets are small devices that store your private keys securely offline, making them nearly impenetrable to hackers. If your device gets lost or damaged, you can restore your wallet on another device using your private seed phrase.
They also allow users to connect to DeFi-based applications such as lending protocols and decentralized exchanges.
The two most popular hardware wallets are the Ledger Nano and Trezor wallets. Let's take a look at both!
The Ledger Nano may be the most popular hardware wallet in the world, and it is one of the best places to stake crypto.
Staking with a Ledger Nano is relatively simple. It supports multiple cryptocurrencies, including Ethereum, Solana, Atom, and Polkadot, and allows users to choose their validator.
Another critical advantage of Ledger hardware wallets is mobile and desktop applications. Ledger wallets give users the ease of use of a software wallet and the security of a hardware wallet. In addition, they can connect to your mobile device via Bluetooth, letting users handle staking through their smartphone.
The Trezor Wallet is the second most popular hardware wallet. Unfortunately, it does not allow staking natively, so users need to connect their wallet directly to a staking provider to stake. However, Trezor is considered by many to be the most secure hardware wallet (slightly beating out Ledger), so it deserves a spot on the list of best places to stake.
Trezor users can stake by connecting directly to a staking provider such as Allnodes or a hot wallet like MetaMask or Exodus.
Notable differences between Ledger and Trezor include the following:
When you are ready to buy a hardware wallet, you should only order them directly from the manufacturer (i.e., not Amazon or any other 3rd party).
Deciding which is the best place to stake crypto for you comes down to a few essential factors. First, how much crypto are you investing in and staking? Are you in this for the long haul, or are you just experimenting?
For most people, it's advisable to begin with small amounts of crypto. Downloading a software wallet is easy, so most people can skip exchanges and go straight to software wallets.
However, if you want to invest a significant amount of money and stick around for the long haul, a hardware wallet is the best place to stake crypto. For ease of use, we recommend the Ledger, but if you are a stickler who wants the absolute highest level of security, Trezor is the best place to stake crypto.