Best Staking Coins for Maximum Passive Income

Benzinga’s top picks for the best staking coins are Ethereum and Cosmos. Earn high rewards by staking crypto with Binance, Coinbase or Kraken.

As Bitcoin continues to break all-time highs in 2024 and the success of the Bitcoin halving becomes more evident, cryptocurrency investing is once again in the limelight. For long-term crypto investors looking to maximize their returns, staking coins has emerged as a solid option to compound their initial capital.

While holding cryptocurrencies can generate returns from price volatility, staking offers investors a way to compound their returns on a unit basis by locking their tokens in exchange for passive income. Depending on the coin being staked, there may be varying minimum lockup times. Given the inherent volatility of cryptocurrency prices, it is crucial to understand the liquidity of your position before deciding whether staking aligns with your investment goals.

Now may be the right time to let your crypto assets work for you. Here are 10 of the best staking coins for maximum passive income.

Top 10 Best Crypto Coins to Stake in 2024

In 2024, staking coins in the cryptocurrency market presents lucrative opportunities. Below are the top picks to maximize your returns.

1. Ethereum (ETH)

Ethereum (ETH) remains a top choice for staking in 2024 given its widespread adoption and market position. With over 25% of ETH staked, billions of dollars are locked in Ethereum staking through independent nodes and LSTs like Lido Staked ETH and Rocket Pool ETH.

Ethereum is routinely number 2 of the top 10 cryptocurrencies, which means ether's price is often less volatile than other altcoin investments. Many investors own ETH for its potential price appreciation. Staking methods vary, including solo validation, delegation, pooling and centralized options. Expected annual percentage rate (APR) ranges from 2.25% to 5%, depending on the method chosen.

However, staking Ethereum requires a minimum deposit of 32 ETH for solo staking and ample technical know-how for running a node. Despite these requirements, users can opt to use a liquid staking token to get around the high capital requirements of solo staking.

2. Solana (SOL)

Solana is a high-performance blockchain network known for its speed and efficiency. It's designed to improve upon Ethereum with a hybrid consensus model including Proof-of-History (PoH) and Delegated Proof-of-Stake (DPoS), allowing for fast and scalable decentralized applications. The reward rate for staking SOL is around 7%. This competitive staking reward and Solana's innovative approach to blockchain technology earn it a reputation as one of the best coins for staking.

3. Cosmos (ATOM)

Cosmos’s focus is on creating an interoperable network of crypto ecosystems. With an estimated annual percentage rate of 25.2% for validators and 23.3% for delegators, it offers some of the highest reward rates. Validators need to hold more than the balance of the 175th active validator to earn rewards. Delegation options are available for those not running a node, allowing them to stake ATOM through non-custodial wallets. These factors, along with the high reward rates, make Cosmos one of the best choices for staking in 2024.

4. Algorand (ALGO)

Algorand network is designed to achieve high-speed transactions, security and decentralization. It makes crypto coin staking simple through its Governance Portal, using non-custodial wallets like Pera or MyAlgo. Depending on the staking platform, rewards can range from 1% to 14.47% APR. Staking directly avoids centralized exchanges, ensuring control over your ALGO. Rewards are decided before each active voting period of three months and paid out at the end of each period. Algorand's simple and accessible staking setup positions it as a top choice for passive income in 2024.

5. Avalanche (AVAX)

Avalanche is hailed as a top crypto for staking in 2024, with its high scalability, low fees and smart contract capabilities. Staking AVAX offers validators an estimated 7.65% APR. However, running an Avalanche node requires a substantial 2000 AVAX investment. Reward rates may change, so it's crucial to factor in inflation and deflation effects. Staking on Avalanche is simple, either through the Avalanche Wallet or centralized exchanges, though the latter may offer fewer rewards and loss of custody of your assets. 

6. Cardano (ADA)

With a strong market presence and passive income opportunities, Cardano is one of the best cryptocurrencies for staking. Staking options include direct staking through non-custodial wallets like Daedalus or Yoroi or via centralized platforms. The estimated APR for staking ADA ranges from 2% to 6%. Staking ADA is accessible with no minimum deposit required, though a small transaction fee applies. Cardano's user-friendly approach, combined with its potential for high rewards, makes it an appealing choice for investors of all levels. Remember, actual reward rates may vary based on market conditions.

7. Polygon (MATIC)

Polygon is renowned for its Layer 2 solutions for scaling Ethereum. It boosts Ethereum's efficiency with faster transactions and reduced fees. Crypto investors can stake MATIC by running a node or delegating to validators. Expected staking APR is up to 6%. Platforms like Lido offer liquid staking, providing stMATIC tokens for staked MATIC, enhancing liquidity. These features make Polygon attractive for passive income seekers. However, remember that reward rates are estimations and subject to change.

8. Polkadot (DOT)

Polkadot, a top 14 cryptocurrency, is praised for its multi-chain network design and pioneering blockchain technology that addresses Ethereum's scalability issues. Staking options include running a validator, joining nomination pools, or using exchanges. Estimated APR is 15.31% for validators, 14.34% for delegates and 7% to 14% on exchanges. Validator setup demands technical knowledge and a dynamic minimum DOT stake.

9. Tezos (XTZ)

Tezos is an open-source platform that addresses the main barriers to blockchain adoption faced by assets and applications. Thanks to its robust ecosystem, accessibility and attractive reward rates, Tezos’s utility coin XTZ is an excellent option for staking in 2024. With a market capitalization exceeding $700 million, Tezos enjoys a prominent position in the crypto market. You can stake Tezos by delegating your tokens or running a node (also known as baking), using non-custodial wallets like Ledger and Exodus. Baking requires a minimum of 6,000 XTZ (known as a roll) and a technical setup using Kiln. Bakers can expect an estimated APR of 5.89%, while delegates may receive around 5.31%. Centralized exchanges offer rates ranging from 3% to 7%. 

10. Near Protocol (NEAR)

NEAR Protocol, an operating system for the open web, is used to create and distribute decentralized apps on any blockchain with a blockchain operating system. It addresses crypto ecosystem issues like low transaction speed and poor interoperability with its layer-one blockchain. Stakers participate in the project's direction through NEAR Protocol's DAO and enjoy lucrative APYs, like a 10.04% APR on Coinbase. With governance involvement and high stake rewards, NEAR Protocol makes the list as one of the best staking coins for maximum passive income in 2024. 

What Is Crypto Staking?

Cryptocurrency staking involves locking digital assets to earn token rewards. Staked assets are often locked, enabling blockchains to use your stake as an incentive to prevent malicious actors from submitting false transactions. If a staked position acts maliciously, proof of stake protocols can slash their stake as a penalty. While rare, slashing works to make sure blockchains remain decentralized and censorship resistant.

Staking is a critical process for blockchains operating on the proof-of-stake consensus mechanism. Through staking, individuals can become network validators, earning rewards for their service. This mechanism allows for generating passive income from idle cryptocurrencies while maintaining ownership. Rewards are received in the form of interest accrued from staking the coins. Staking presents an opportunity to participate in network maintenance while earning returns on invested assets, offering an alternative to traditional banking interest on savings accounts.

How to Choose the Best Crypto to Stake

Choosing the best cryptocurrency to stake can make a significant difference in your investment outcomes. Key factors to consider include:

• Project team: Look into the experience and track record of the team behind the cryptocurrency. A strong team is often a good sign of the project's success.
• Technology and roadmap: Take a close look at the technology the cryptocurrency is built on and its future plans. Evaluating its roadmap can give you an idea of its potential for growth and sustainability.
• Community support: Check the level of engagement and support from the cryptocurrency community. A vibrant community can contribute to the network's strength and resilience.
• Historical price performance: Analyze the past price performance of the cryptocurrency to gauge its stability and potential for growth.
• Market trends: Stay updated on broader market trends that could affect the cryptocurrency you're considering.
• Security and regulatory compliance: To protect your investment, ensure that the platform you choose for staking prioritizes security and follows regulatory standards.

Where to Stake Crypto

You can stake your coins through various methods and platforms depending on your investment strategy and comfort level.

Directly on blockchains: Some cryptocurrencies allow direct staking through their native cryptocurrency wallets. Examples include Ethereum, Tezos, Cosmos, Solana and Cardano.

Staking pools: If you don't have enough holdings to stake independently or prefer not to manage a validator node, joining a staking pool could be a simpler option.

Cryptocurrency exchanges: Many exchanges offer staking services, making it easy to stake your crypto with a broker and earn rewards. Some popular ones include Coinbase, Kraken, Binance, Gemini and Crypto.com.

Is Crypto Staking Worth It?

Crypto staking can be a worthwhile way to earn passive income on your holdings. It often offers higher returns while you hold your position and secure the network. However, risks include market volatility and potential loss of staked assets from penalties or technical failures. So, you must thoroughly understand the specific staking process and associated risks before committing your crypto assets.

Frequently Asked Questions