When choosing a crypto staking platform, it is important to understand what your needs are as a user. Obviously, the amount of yield you can earn from staking will be an important part of the overall selection criteria but there are other factors to consider as well.
For example, all of the sites covered in this article make it easy for you to participate in crypto staking without the need for technical knowledge to stake your own funds directly. All the other crypto staking platforms also provide this same convenience. However, Coinbase also offers the option for you to participate in their staking pool directly from an external wallet. This keeps you in control of your funds, which is an important aspect of cryptocurrency ownership for many who believe that “Not your keys, not your crypto”.
You can learn more about cryptocurrency ownership
in this Learn Crypto article about the concept of
crypto custody and why it’s important in crypto. The factors covered in this article to differentiate the different crypto exchanges in terms of their staking options cover the staking yields, payout frequencies, lock-up terms, and the number of supported tokens. Another thing to think about is the security of your funds – from the perspective of whether or not the platform has a regulatory license. This is because a licensed exchange presumes that they have enough asset security and protection measures in place to keep investor funds safe.
In summary, you should always consider these key factors when choosing the best crypto staking platform to stake crypto on your behalf:
1. What is the staking returns offered, in terms of APY or percentage share?
Passive income returns are quite straightforward. The higher, the more profitable. But be wary if the APY offered is much higher than others. Try and find out why they pay more. Do they take riskier approaches? Perhaps the platform is not regulated?
2. How flexible are the staking periods?
Staking requires locking in your crypto assets for a certain period of time. This is usually referred to as the lock-up period. In the event of an emergency, you will appreciate being able to retrieve your tokens at any time.
If you require more flexible staking, you might prefer a site that allows you to unstake at any time, or to cancel the lock-up period when needed.
3. Does the crypto staking platform offer many types of tokens for staking?
Naturally, you might want to stake in several tokens to spread out your risk or simply to diversify your portfolio. You may even want to trade or exchange tokens to have different tokens to ensure you have the best crypto to stake. Some platforms only focus on a handful of tokens so you might end up staking on a platform with multiple options.
On the other hand, it is generally riskier to stake on new projects or unproven crypto. Coins like Ethereum are seen as safer as they are more decentralised, making them far less vulnerable to hacking or failure than cryptocurrencies that don’t have a strong network of validators securing them.
4. Is the crypto staking platform regulated?
A regulated crypto exchange means that it meets the requirements for the security and business measures required by the particular license it holds.
In general, licenses from larger and more established jurisdictions are more difficult to obtain, indicating a higher level of regulatory compliance for sites that hold them. So a site holding a US, UK or EU license suggests it is more secure than one holding an offshore license.
Of course, no license guarantees safety of funds, so you should always look for other measures in place such as deposit guarantees or cold wallet storage.
5. How long has the crypto staking platform been in business?
A site that has been in business for years is likely to have more experience with crypto and has spent years building up a reputation, either in security, reliability or even customer support.
Be careful not to stake at newer sites promising incredible staking rewards or you might end up losing your money in a fly-by-night scam.
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