(1) Learn more about cryptocurrencies that offer staking
To start participating, you must own a proof-of-stake cryptocurrency. These are the only cryptocurrencies you can stake. Luckily, the proof-of-stake model is growing in popularity due to its efficiency. Choosing the right crypto is the most important part of the staking process. A common mistake here is to choose a cryptocurrency just because it offers huge rewards. It's always tempting to buy when you see a cryptocurrency offering 100% or more in annual staking rewards, but many of these are bad investments that will fall in price.
You should only buy cryptocurrency if you are sure it is a good long-term investment. Think of staking as the icing on the cake and don't make it the only reason to buy. There are many proof-of-stake cryptocurrencies that you can consider.
Here are some of the biggest:
Cardano (ADA)
Solana (SOL)
Polkadot (DOT)
Terra (LUNA)
Tezos (XTZ)
Ethereum (ETH) is also in the process of transitioning to the proof-of-stake model. It's not 100% there yet, but it can be staked.
(2) Buy the cryptocurrency you want
Now that you've learned about cryptos you can stake, the next step is to pick one and buy it. This may seem straightforward, but it's important to consider where you'll make the purchase. The simplest option is to choose one of the cryptocurrency exchanges with a built in staking feature. The reason to take your time here is because not every cryptocurrency platform lets you stake crypto. At the moment, most of the stock brokers and payment apps that sell crypto don't offer staking. They also won't let you transfer the crypto you buy off their platforms. So, let's say you buy crypto from one of those places. You won't be able to stake it on the platform or transfer it to another wallet or exchange where you can stake it.
So, let's assume you purchase crypto from one of these places. You may not be capable of stake it at the platform or switch it to some other wallet or exchange in which you could stake it. That's why you need to persist with exchanges that give you full control of your crypto.
Some of the top options include:
Binance
Coinbase
Kraken
Each of those exchanges gives staking with a number of their cryptocurrencies, so that you can stake what you purchase in some clicks. You'll additionally have the choice of moving your crypto in case you need to stake it someplace else.
(3) Staking your cryptocurrencies through an exchange or pool
This part of the staking process depends on the cryptocurrencies you bought and the exchange where you bought them. If you have used an exchange that allows you to stake these cryptocurrencies, it likely has a staking page or option in your wallet. Check the exchange's help section if you're not sure how to do this. Another option with many cryptocurrencies is to use a staking pool. When staking through a pool, you usually first need to transfer your crypto to a crypto wallet. You can then select a staking pool and send the cryptos to it via your wallet. Placing crypto bets is a fairly straightforward process, especially now that multiple exchanges are offering it. Once you've figured out what you're going to buy, it's a good idea to research how staking works for that particular cryptocurrency. This helps you to select the staking method that works best for you and offers most rewards.
