Since the emergence of cryptocurrencies and blockchain technology, the interest in the industry has only gone up and up and up. More and more investors, traders, and holders have emerged over the past few years. Analysts expect that this is only just the beginning.
At first, the only crypto blockchain was Bitcoin (BTC). This blockchain used a Proof-of-Work (PoW) consensus to confirm the transactions on its blockchain. PoW consisted of a lot of energy and proved a bit of a burden to its miners. Not to mention, the equipment needed to mine Bitcoin with PoW was another hurdle on its own.
This is where Proof-of-Stake (PoS) consensus came in, it offered a much cheaper and sustainable way of confirming transactions on the blockchain. Additionally, users can earn passive income with this algorithm as well. Thus, holders can participate in crypto staking to become active members of the crypto community.
Staking could also give hodlers many other additional benefits. For instance, this could include governance. All in all, stakers can stake part of their crypto assets to earn more cryptos in return. The more they stake, the more they earn and the more say they have in the blockchain’s decisions for its own future.
Top 5 Best Coins for Staking in 2021
Now that we know what staking is and what it can do for the blockchain and its users, let’s have a look at which cryptos are the likely option for staking in 2021.
This project is one of the crypto community’s favorites. Cardano (ADA) aims to be the best smart contract platform. It is an open-sourced, decentralized, public blockchain. Additionally, it runs on the Proof-of-Stake algorithm. Also, its native cryptocurrency — ADA, facilitates peer-to-peer transactions on the Cardano blockchain.
The project is led by Charles Hoskinson, a visionary leader who is also the co-founder of Ethereum. Due to differing ideologies, Hoskinson set off to create Cardano. After laying its foundation in 2017, the platform has been rapidly gaining momentum.
Cardano’s roadmap has five stages known as Eras. Currently, on its road to completion, the blockchain is in its third era — Goguen. This era confirms smart contracts functionality. In detail, it is in thanks to the Alonzo hard fork.
After a series of testnet launches, the Cardano Alonzo mainnet finally went live just recently. Hoskinson and his dedicated community are now looking forward to the next phases. The Cardano community has much faith in this project, by the time the last era — Voltaire, rolls around, the community should have full control over the blockchain.
Cardano’s steady growth and expanding community make it one of the best options for staking. With a simple series of testnet launches alone, the price of Cardano hit a new all-time high. Imagine the possibilities as the network completes all of the milestones on its roadmap!
Staking Cardano (ADA) can happen via many crypto exchanges like Crypto.com and Binance. Although for those looking for a more isolated place for staking can give Yoroi Wallet or Daedalus Wallet a shot.
This project has yet another similar tale. Polkadot (DOT) also comes from the mind of another Ethereum co-founder — Gavin Wood. The Polkadot Protocol aims to fix Bitcoin’s limitations such as interoperability and scalability.
The underlying problem with all the new blockchains popping up was the fact that they could not communicate with one another. Polkadot solves this issue. With its Relay Chains, Parachains, Parathreads, and Bridges, Polkadot truly offers an astounding solution of interoperability. Users from different blockchains can now complete transactions with Polkadot playing the mediator.
Meanwhile, the platform’s native currency — DOT, plays very many important roles on the blockchain. These roles include governance, staking, and bonding. With governance, users can vote, with staking users can earn a passive income and confirm transactions, with bonding, they can connect their platform to Polkadot.
Polkadot is also home to many DeFi projects. Most of these are very notable and helps bring more users and activity onto Polkadot’s platform. Some of the more prominent projects include Acala, Phala, Centrifuge, Akropolis, and Kusama.
As these projects grow popular, so do their native tokens, and eventually — DOT. The price of DOT shot up when Polkadot’s Rococo testnet went live a few months ago. At the moment, Polkadot is currently on its Parachain rollout phase.
Just recently, Acala Parachain went live. Next on the list is the Kusama rollout and slot auctions. So forth, the roadmap will go on. One thing is for certain, DOT’s potential is immense and it still has a long way to go. Staking this asset can be a great option as the platform will continue to expand as more projects enter its space.
VET or VeChainThor is a public blockchain. VeChain’s vision is to enable establishments and businesses to adopt blockchain. In fact, it is one of the first blockchains built to exclusively cater to the needs of enterprises. VeChainThor aims to use DLT or distributed ledger technology in improving supply chain and product lifecycle management.
VeChain uses a wide range of technologies to streamline the supply chain sector. A good sample for this is VeChain’s RFID tags and sensors in monitoring critical data during shipment. This information is broadcasted in real-time, across the blockchain.
Although, VeChain did borrow a thing from Ethereum — the dual token strategy. This kind of blockchain ecosystem has two tokens. One for public investment and/or digital cash, and the other for programming and smart contract execution.
The VeChain token or VET is the cryptocurrency needed for investing in the exchange. Users use this token to transfer values, for transactions, and to trigger smart contracts. Moreover, the second token used in VeChain is the VTHO or VeChainThor Energy. This token functions as gas and powers smart contract transactions. However, VTHO is not open to the public. Only developers use it to cover their contract execution costs.
VeChain ensures timely and secure consensus. It has a proprietary consensus mechanism called Proof-of-Authority (PoA) which provides efficient means to maintain system continuity. It is built to improve the shortcomings in Proof-of-Work (PoW), Proof-of-Stake (PoS), and Delegated Proof-of-Stake (DPoS) mechanisms.
At present, VET ranks 23rd in CoinMarketCap with a value of over $0.09.
Solana is an open-source project relying on permissionless blockchain technologies to provide DeFi (decentralized finance) solutions. Founded in 2017 by Anatoly Yakovenko, SOL is a fourth-generation blockchain and cryptocurrency that gives greater scalability through leveraging an open infrastructure. Today, it is considered one of the fastest programmable blockchain in the crypto industry.
The objective of SOL is to enhance the scalability of the blockchain by combining Proof-of-History and Proof-of-Stake consensus. With this, it is said that SOL can actually assist nearly 50,000 transactions per second — without sacrificing decentralization.
Presently, Solana is considered one of the fastest programmable blockchains in the crypto industry, which also runs various decentralized applications. As a matter of fact, reports say that Solana rivals Ethereum. However, Solana has a larger theoretical throughput than Ethereum. Meaning, Solana can handle more transactions compared to Ethereum.
More so, in Solana, users use SOL to interact with decentralized apps. Most of these DApps are present in the finance sector — like crypto platforms and NFT platforms. Currently, it showed a rapid advancement in the cryptocurrency industry.
With this, experts conclude that the platform has decent yields for users who plan on holding them for the long term. Reports say it will continue to be among the top crypto rankings and that it might even replace Ethereum.
In simple terms, Cosmos is a network of blockchain networks. It is an ‘ever-expanding ecosystem of interconnected apps and services’. For developers, they refer to Cosmos as the ‘Internet of Blockchains’.
The apps and services in Cosmos are connected using the IBC — Inter-Blockchain Communication protocol. With this, users are allowed to exchange assets and data across decentralized blockchains, freely. More so, Cosmos uses the ATOM cryptocurrency.
For cosmos, its goal is to ‘allow separate blockchains to communicate with each other in a seamless manner’. In detail, to communicate means to share and transact data with each other. More so, Cosmos can transform friction in the market and make it a positive driving force for development.
However, Cosmos does more than just bridging blockchains. The platform also offers features and products that entice users in the market. More so, it has the capability to solve today’s challenges for blockchains like scalability and interoperability.
Along with this, the platform is also fully customizable. Meaning, developers can freely create and issue new blockchain apps and platforms easily. Furthermore, in the Cosmos ecosystem, each network is called ‘zone’ and the Cosmos Hub is where all the blockchains meet.
Additionally, the entire ecosystem has three layers — Application, Network, and Consensus. Along with this, Cosmos uses the Tendermint BFT engine, which is a Proof-of-Stake governance mechanism. Here, network users act as validators and can earn rewards by staking their crypto on Cosmos.
To conclude, the market needs some unification — which is exactly what Cosmos is built for. This kind of strategy will benefit the entire blockchain ecosystem greatly. Fostering the networks that can share data and tokens programmatically with no central facilitator is the goal of Cosmos.
In conclusion, Staking some crypto-assets can be a very rewarding decision. Either in terms of actual financial gain or in terms of being a part of something revolutionary that could change the world for the better. Certainly, staking coins is a big decision and should not be taken lightly.
Therefore, users should do their own research before choosing to buy or stake their cryptos in any scenario. The best advice would be to study the technology behind the platform, research the team and its leaders, and choose an asset with solid use cases.
Most crypto assets are created to fulfill a purpose. Choose one that you believe in, a project that holds the same values and is working towards the same goal as you. Overall, be vigilant and gather knowledge to make informed decisions. Happy Staking!
Disclaimer: The views and opinions expressed in this article are solely the author’s and do not necessarily reflect the views of CoinQuora. No information in this article should be interpreted as investment advice. CoinQuora encourages all users to do their own research before investing in cryptocurrencies.