Cryptocurrency staking: what it is, how to use it and the risks

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The alternative to traditional mining has long since reached maturity. Cryptocurrency betting is a way to earn money by locking assets on the blockchain. The platform uses financial resources to manage the network, and the owner receives a reward. This staking format replaced bulky equipment and energy-intensive Proof of Work (Pow) algorithms. By simplifying access, we were able to expand the circle of participants and bring the technology closer to mainstream investors.

How cryptocurrency staking works: from coins to percentages

The process begins with locking tokens on a network using Proof of Stake (PoS) or variations thereof. A participant delegates funds to a validator, who confirms transactions and forms blocks. For successful work, the system receives a reward: a share of the order and the issuance of a new coin. The higher the validator’s balance, the higher the chance of obtaining a block. In practice, it seems simple. The user logs into the wallet or exchange and selects the asset, term, and format. After locking, the coins are deployed, and the coins are received on a schedule. Some platforms use auto-staking with daily compounding.

Types of cryptocurrency staking: open, fixed, and DeFi formats

The market offers different participation options. Important:

Fixed: The asset is locked for a fixed period, usually 7 to 365 days. Early withdrawal is not allowed. The performance is higher.
Flexible (open): Coins can be withdrawn at any time. The reward is built up daily or weekly.
DeFi Staking: Works via smart contracts without intermediaries. The user communicates with the protocol themselves. Aggregation of income is possible.
Liquid staking: The token remains available in circulation. The participant receives a ‘wrapper’ (for example, stETH) that can be used in DeFi.

Each format solves its own problems, from passive storage to active trading. The income level, risks and complexity also vary.

Proof of Stake (PoS) versus Proof of Work (PoW): a technological shift

Classic mining requires equipment and energy. The PoW algorithm uses computer power to find a hash. With PoS, the number of tokens on the balance is decisive. The validator does not use electricity, but provides a “collateral” that incentivizes honest work. The PoS mechanism lowers the barrier to entry and makes the network green. This is especially important in 2025, in the context of carbon footprint regulations. Ethereum has already migrated to PoS. Other major blockchains, including Cardano, Solana, Polkadot, and Tezos, were originally built with a staking architecture.

Cryptocurrency Staking Rewards: What They Are, Percentages, Schedule, and Nuances

Fees depend on the currency, term, type of platform, and the level of competition between validators. The average fee is between 3% and 15% per year. Some DeFi protocols offer a return of 50% or more, but come with high risk. Imputations can be daily, weekly, or at the end of the term. Some systems use compound interest: capitalization magnifies the final benefit. The calculation uses APR (simple annual percentage rate) or APY (compound interest included). The actual returns depend on the volatility of the cryptocurrency. An increase in the rate can increase profits, a decrease can decrease profits. Therefore, it is important to look not only at the interest rates, but also at the market cycle.

Staking tokens: which coins participate in the ecosystem?

Cryptocurrency staking is participating in the life of the blockchain by owning certain tokens. Not all currencies are suitable. The conditions are determined by the protocol itself. It is based on the PoS consensus and its modifications: DPoS (delegated), LPoS (leasing), NPoS (nominated).

The most popular tokens for staking are:

Ethereum (ETH): After the transition to Ethereum 2.0 and PoS consensus, validators block a minimum of 32 ETH. With pools, you can stake less. Fee: 4–7% per year.
Solana (SOL) is a fast network with low fees. Delegation is possible from any wallet, the yield is about 6%.
Polkadot (DOT): uses NPoS. The nominators select the validators. The average yield is 12%.
Tezos (XTZ) is one of the first PoS projects. Supports dynamic issuance and automatic participation. Profitability: 5–7%.
Cardano (ADA) is a platform designed for long-term stability. Profitability: 3–5%.
Avalanche (AVAX), Cosmos (ATOM), NEAR, Algorand (ALGO) and others also actively participate in the system.

Mapping profitability: calculations, realities and pitfalls

Cryptocurrency staking is an investment with variable returns. The following must be taken into account when calculating:

nominal interest rate (APR or APY);
Length of the block;
Platform type (exchange, wallet, DeFi protocol);
Tax characteristics;
Token price dynamics.

Exchanges often quote higher prices to attract attention, but actual values may be lower. In addition, automatic capitalization is not always possible. Profitability often depends on network activity and the number of competing validators.

For example, staking 1000 USDT at 8% per annum on a daily compounding platform generates approximately 83.28 USDT after 12 months. However, if the token is volatile, the end result may be negative. Being able to combine interest rate analysis with technical and fundamental analysis of a token is an essential skill in 2025.

Cryptocurrency Volatility and Its Impact on Staking

Staking provides a fixed income in tokens, but the price of those tokens is variable. If a coin loses value, even a high stake cannot compensate for the loss. In a bear market, the portfolio loses capitalization, despite the accumulation.

The solution is to choose stable tokens, use stablecoins or diversify. High volatility, especially in the case of new or illiquid assets, makes staking a speculative strategy. Therefore, an expert analysis of the coin, its tokenomics, the project’s prospects and its role in the ecosystem should precede the blocking of funds.

Staking platforms

The list includes both centralized and decentralized solutions:

Binance Earn is the largest exchange offering dozens of assets. User-friendly interface, automatic renewal, fixed and flexible rates. Support for ETH 2.0.
Kraken Staking is a regulated platform that focuses on security. Clear terms and fast setup.
Ledger Live is a cold wallet with staking functionality. Security is maximum. Supports Tezos, Cosmos and others.
Lido Finance is a leader among DeFi solutions. It allows you to receive liquid tokens, such as stETH, stSOL, etc. Compatible with other protocols.
Trust Wallet is a mobile wallet with support for PoS coins. User-friendly for beginners, Binance integration.
Exodus Wallet is a desktop application with a simple interface. Staking with one click.
Coinbase Earn is popular in the US. Official status and minimal risks, but limited asset selection.
Atomic Wallet: multi-currency support, flexible fees. Regularly updated.
MetaMask + StakeWise: an advanced bundle for DeFi enthusiasts. Supports ETH and other assets.
Rocket Pool – ETH Staking without 32 ETH. Suitable for small amounts.

Conclusion

Cryptocurrency gambling is not just a way to make money, but an essential part of a complex system. PoS protocols replace energy-intensive algorithms, open up access to passive income, lower the barrier to entry, and increase decentralization. Demand for PoS assets is growing. The number of DeFi products with staking functionality is growing. New generations of tokens are emerging that can adapt to volatility. Legal frameworks are also gradually emerging in the US and EU.

The future is not only determined by developers, but also by those involved in validation, delegation, and distribution. This means that an expert approach to choosing a token, platform, and strategy is now key to achieving stable income and digital sustainability in 2025 and beyond.

Where is the best place to store cryptocurrency: a review of wallet types

With the spread of digital assets, investors are increasingly faced with the question of where to store cryptocurrency to ensure both convenience and security. Regardless of the balance amount — whether it’s a few dollars in bitcoins or an impressive portfolio with ether and tokens — a smart choice of wallet remains a key decision.

In this article, we will look at the main types of crypto wallets, compare their characteristics, identify pros and cons, and also discuss which scenarios are suitable for specific options — from active trading to long-term storage.

Where to Store Cryptocurrency: Brief Overview of Approaches and Criteria

The choice of storage location depends on the user’s level of knowledge, the amount of funds, transaction frequency, and risk tolerance. All cryptocurrency wallets are divided into hot (connected to the internet) and cold (offline). There are also software, hardware, paper, custodial, and non-custodial solutions.

Each type has features that affect security, convenience, and access to assets. Understanding the nuances is critical when choosing a tool.

Software Wallets: Speed and Convenience

Software solutions are applications for smartphones and computers that provide quick access to funds. They can be desktop (e.g., Exodus, Electrum) and mobile (Trust Wallet, MetaMask).

This format is popular among active users who make frequent transactions with bitcoin, ethereum, and other coins. It is important to note that private keys are stored directly on the device, and recovery is impossible without a seed phrase. Therefore, when choosing where to store cryptocurrency, remember: security depends not only on the type but also on the reliability of the operating system and the user’s digital hygiene.

Hardware Wallets: Maximum Offline Protection

Hardware options are devices that store private keys offline. Bright examples include Ledger Nano, Trezor. They provide a high level of security as they are not susceptible to viruses and phishing.

This option is considered the best way to store cryptocurrency for long-term investors and holders. It is particularly relevant when dealing with large sums. The downside is the high price of the device and not the fastest access speed. But when it comes to security, there are no compromises.

Paper Storage Methods: Simplicity with Risks

Paper wallets are printed QR codes and keys. Their main advantage is autonomy and complete isolation from network threats. However, physical vulnerability, the risk of loss, or damage make this method outdated for most users.

Nevertheless, a paper wallet can be useful as a backup or temporary solution — especially if you are looking for a non-standard way to store cryptocurrency, outside the digital environment and without internet access.

Custodial and Non-Custodial Wallets: Who Do We Trust with Keys?

Custodial wallets are where keys are held by a third party (usually exchanges or services). Such solutions are convenient, especially for beginners, as they do not require knowledge of technical details. An example is accounts on Binance or Coinbase.

While non-custodial wallets provide full control over funds, the responsibility for security lies with the user. This is a more “advanced” method suitable for those who want to manage their asset themselves.

Hot and Cold Wallets: Difference in Security Approach

Hot and cold options differ in terms of accessibility and security. The former are constantly connected to the network — mobile applications, online services, and exchange accounts. They are suitable for frequent operations but are vulnerable to attacks. The latter are offline solutions: hardware devices or paper media that provide a high level of security but require more time to access funds.

Therefore, when deciding where to store cryptocurrency, it is important to consider both the intended use and readiness to compromise between convenience and security. Understanding the difference between hot and cold wallets helps build a smart storage system by combining both types depending on the tasks.

Advantages of Hot and Cold Solutions: How to Use Effectively

For those who want to combine convenience and security, it is optimal to use multiple options. This approach allows for flexible asset allocation between hot and cold solutions depending on goals and storage volumes. Let’s consider the main recommendations:

use a hot wallet for daily operations and small amounts;
keep large assets on cold devices to protect against hacking;
enable two-factor authentication and encrypt access;
regularly back up seed phrases and record them offline;
do not store private keys in the “cloud” or on public devices.

Combining different solutions reduces risks and allows for more flexible management of digital assets.

How to Choose a Secure Crypto Wallet: Practical Recommendations

Before deciding on a solution, assess your level of digital literacy, device availability, and storage goals.

hardware devices with reliable protection are suitable for long-term investments;
if you frequently use DeFi or NFT, choose mobile non-custodial applications;
for beginners, it is advisable to use exchange custodial accounts with a good reputation;
paper wallets are a backup but insecure storage method;
apply different formats to distribute risks (e.g., part of the funds on a mobile device, part in “cold storage”).

Following these tips will help avoid losses and establish a balanced approach to asset protection.

Where to Store Cryptocurrency: Conclusions

The question of “where to store cryptocurrency” is not only about choosing a format but also about personal responsibility. Whether assets are placed on an exchange or a hardware device, it is important to understand how a private key works, what a seed phrase means, and how to handle a storage address.

Even small mistakes — sending to the wrong address or losing access — can lead to a complete loss of funds. Consider all the nuances: security, support for necessary assets, differences between types of storage methods.

This approach not only minimizes risks but also forms a smart strategy for managing cryptocurrency in the long term.

May 7, 2025

Top 10 ways to earn on crypto in 2025

Technologies do not wait. The top ways to earn on cryptocurrency are constantly evolving: strategies that worked last year become outdated within a quarter. New opportunities come like thunder among DeFi. Financial flows are redistributed not because of promises, but thanks to algorithms and actions.

Each method is based on real data and supported by practice. They demonstrate how exactly you can use the top ways to earn on crypto — without clichés and myths.

1. Exchange Trading

By 2025, the exchange ceased to be a game for loners. The average daily trading volume on Binance reached $70 billion. Automated bots react faster than traders. Nevertheless, classic trading remains popular as one of the top ways to earn on crypto.

Fact: Algorithmic trading already accounts for up to 40% of all trades on major platforms.

Chart analysis, technical analysis, liquidity study — basic actions. Strategies like scalping or swing trading work. Trading requires time, nerves, and quick decision-making. Support from analytical platforms like TradingView helps avoid blind market entries.

2. Copy Trading

Against the backdrop of market growth, interest in copy trading has increased by 80%. Platforms like Bybit or Phemex offer the opportunity to replicate professionals’ trades. One of the top ways to earn on crypto for beginners.

Platforms automatically mirror trades. It is important to choose a reputable strategy provider — reputation and transparent statistics are critical. This tool reduces the entry threshold and minimizes the risk of errors.

3. Airdrops

Earning in crypto without investments? Airdrop provides exactly this format. Startups distribute tokens in exchange for simple actions: subscription, retweet, activity in the testnet.

This method is among the top ways to earn on crypto due to its simplicity of participation and high profitability. It is important to track projects with potential and participate at an early stage. Using services like Earnifi speeds up the search for relevant campaigns.

4. Arbitrage

A classic with engineering precision — cryptocurrency arbitrage. The essence is simple: buy on one exchange, sell on another. Delays between platforms provide a window of 1–3%, and large volumes turn it into a stable source of income.

Fact: In high-frequency trading, arbitrage brings in 0.5% profit per day with a turnover of over $50,000.

Platforms like Coinigy and Blackbird automatically track price differences. Arbitrage works only with fast execution of trades and sufficient liquidity at both ends of the chain.

5. Staking

This method has become common for earning passive income in cryptocurrency. The process involves freezing coins to support the network and receive rewards.

It works like a bank deposit, but with higher returns and flexibility. One of the top ways to earn on crypto — especially when combined with reinvestment and DeFi integration.

6. DeFi Lending

Platforms like Aave or Compound allow earning by issuing loans. It works simply: the asset enters a pool, the borrower takes a loan with collateral, and the lender receives interest.

This method combines reliability, liquidity, and automation. Projects regularly conduct audits of smart contracts, reducing risks.

7. Investing in Early-Stage Crypto Projects

Cryptocurrency, often associated with hype, is a source of income for beginners. But smart investing is a strategic game. Investing in early rounds ensures returns in tens of multiples.

One of the top ways to earn on crypto. It requires project selection: studying whitepapers, teams, tokenomics. Platforms like Seedify or Coinlist are used for access.

8. Mining in 2025

Mining has shifted from home format to industrial. Equipment profitability depends on electricity prices, hash rate, and exchange rate. In 2025, the ASIC Antminer S21 brings in up to $6 per day with a consumption of 3.5 kW.

Fact: With electricity cost at $0.06 per kW, profit remains above $150 per month from a single device.

It suits newcomers as a way to earn on cryptocurrency, especially when using cloud services: NiceHash, Genesis Mining. Energy efficiency and income stability have made mining part of earning on crypto.

9. Faucets: Micro-rewards with Macro-effect upon Accumulation

Faucets are a sustainable model for earning crypto for actions that require no investment. Projects like Firefaucet and Freebitcoin give out satoshis for captcha, surfing, and tests. An active user can collect up to $25 per month without spending. In 2025, the mechanics have become more complex — platforms have integrated gaming elements and educational modules.

This tool is among the top ways to earn on crypto, especially for participants from countries with low entry thresholds. Task automation and simultaneous participation in multiple faucets increase efficiency by 3–4 times.

10. Strategies on DeFi and NFT Frameworks

DeFi projects in 2025 have expanded functionality. Complex income strategies include liquidity farming, investments in pools with multiple assets, and NFT frameworks as a way to “wrap” an asset into a profit-generating tool.

Fact: The GMX protocol provided an average annual return of up to 22% in pools with USDC/ETH assets in the last quarter of 2024.

The top ways to earn on crypto now include custom strategies: asset movement between protocols, use of insurance pools, farming with automatic rebalancing. It’s not just about actions but about the ability to arrange them correctly — like a chess game where each move affects the outcome.

Real Actions to Start in Crypto

The path in crypto begins not with theory but with specific actions — from opening a wallet to choosing strategies. Real steps provide an understanding of processes and form the first profit.

Practical actions include:

Choosing a direction. Setting priorities: active trading, passive models, or arbitrage.
Opening a wallet. Registering on an exchange (Binance, OKX) and installing a DeFi wallet (MetaMask).
Education. Minimum of 10 hours studying trading and DeFi video tutorials (YouTube, Cryptohub).
Practice platforms. Using testnets and demo accounts (Binance Futures Testnet, Avalanche Fuji).
Monitoring airdrops. Subscribing to aggregators: DappRadar, Airdrops.io, Earnifi.
Participating in faucets. Working on Firefaucet and CoinPayu for 20 minutes a day.
Copy trading. Setting up on the exchange, tracking trader profitability.
Arbitrage scripts. Using tools like Blackbird.
Lending. Depositing in Aave, selecting a rate, monitoring collateralization.
Reinvestment. Reinvesting profits, creating compound interest effect.

Each action increases involvement, improves skills, and raises profit levels. These steps form the foundation for stable income and development in the crypto market.

Top Ways to Earn on Crypto: Conclusions

The top ways to earn on crypto in 2025 are not just a set of ideas but a clear income model. Platforms, tools, and technologies work towards results, where each step brings profit. Airdrops, faucets, trading, DeFi, and staking form an accessible ecosystem. Starting is possible without investments — the result depends on actions, not on initial capital.

May 7, 2025