Staking is one of the most profitable ways to make more with your crypto. With the resources available online and blockchain protocols allowing investors to stake in small amounts, anyone can participate in staking, even beginner investors. There’s no technical skill needed to make money on crypto staking.
The rules for every staking project are different, but to highlight one of the more popular coins out there, we take a look at Polkadot.
Explaining Polkadot
The Polkadot (DOT) protocol connects several unique blockchains into one unified network. Polkadot was created as part of a wide-ranging online initiative aimed at decentralizing internet monopolies by giving people back control of their information. As of this writing, DOT is at $23.68 with a one-day trading volume of $1,603,034,535.
Based on Polkadot’s official website, the protocol has fundamental advantages—scalability, specialization, working together, self-govern, and easily upgradeable. In the context of their own environments, some blockchain networks are restricted in terms of the quantity of traffic they can handle.
Polkadot is different as it is a sharded multichain— a blockchain network that can handle several transactions on multiple chains simultaneously, allowing it to avoid the block-processing bottlenecks that occur on traditional networks that perform single transactions sequentially. This is just one of the many reasons why Polkadot is an excellent protocol to watch out for.
What is Polkadot staking?
There are many ways to earn from Polkadot. You can buy and sell the coins or stake your existing DOT to generate profits. Buying and selling DOT is a no-brainer process. With user-friendly exchange platforms out there, you can easily click “Buy” and have your money invested in this specific crypto. Polkadot staking is another easy-to-manage money-making scheme on the blockchain. It’s different from trading in a way that staking doesn’t require you to monitor your investment from time to time. Plus, you earn from getting more coins, not from the price changes.
Polkadot staking is as easy as locking up your digital assets and then getting paid for it. The only challenge you will encounter is waiting for the lock-up period to pass before you can withdraw your investments. Before, some blockchain protocols require investors to lock up their coins for 24 months, but the rules have changed. For example, in Binance, you can stake your coins for at least 15 days.
Polkadot staking rewards
What you get from Polkadot staking are extra DOT tokens. If you stake 15 DOT, for instance, you will obtain decimals of DOT as an interest income depending on the annual return rate. Blockchain protocols and exchange platforms have different ways of determining the rate of return. This is why you should also invest in acquiring knowledge of the best platforms where you can stake.
Where can you stake Polkadot?
There are several blockchain platforms where you can stake Polkadot. Just recently, Binance added a staking feature on its platform where investors can engage in locked staking and Defi staking. However, there are only a few selections of coins where you can stake.
Staking as a service platform also offers unlimited opportunities for investors, and they choose the most rewarding coins. As of this writing, DOT has a 10.7% estimated annual yield on Rockx.
How to stake DOT?
Now, let’s get to the procedural process. Polkadot staking is meant for everyone, whether you’re someone who has experience already or a complete beginner. Here’s a step-by-step guide to help you get started.
Step 1: Create an exchange wallet.
Digital wallets are the most common crypto storage used by investors when staking. Most blockchain protocols offering to stake don’t require investors to undergo the KYC process. The only thing they need is a digital wallet to be connected to the platform. Some of the famous wallets used in staking are MetaMask and Trust Wallet.
To start creating your wallet, go to the official website of your chosen wallet. Register or sign up as a user. Most exchange wallets have a Google Chrome Extension and It will be easier to access the wallet if you install the extension.
To keep your crypto wallet secured, make sure to use a strong password and save your seed phrases. Don’t tell anyone about your password unless you trust the person completely.
Step 2: Choose the right staking as a service platform.
Your earnings depend on how rewarding the coin is and the return rate of the service platform you choose. Go for a platform that rewards investors well. To select the right Polkadot staking platform wisely, start by making a list of available networks and compare their annual rates and features. Don’t settle for less. You have plenty of options to choose from.
Consider the staking fees, coins you can stake, and the friendliness of the interface. The lower the costs, the better. You don’t need to look for a platform that has all the cryptocurrencies. You need a place where the good coins are staked.
Step 3: Set your initial investment.
You might also ask how much is the minimum when staking DOT. Well, the answer depends on your financial goal. How much are you willing to lose? How much are you trying to reach for a month? How much profit would you like to receive? If you are a beginner, start with the smallest investment a staking platform requires. You can take things slowly by gradually increasing your investment.
Step 4: Choose the lock-up period.
The next step is choosing your lock-up period. Staking platforms have different rules. There are 15, 60, and 90-day periods. You will also come across networks with a longer period requirement. If you want to get your investment as early as possible, then choose the shortest period. However, keep in mind that the shorter the staking period, the lower the rewards are. If you want to make more coins and don’t plan to use your investment yet in the next 30 days, you can opt for the longest term.
Step 5: Wait, earn, repeat.
Staking is addicting for investors who have little time to monitor their investments. You can maximize your rewards by simply choosing the longest period and repeating the same process. If you are not planning to use your coins after the lock-up period lapses, you can use them again to stake DOT. You wouldn’t want to miss a good opportunity in the market, especially now that competition is stiff, and many cryptos are performing well.
Takeaways
Overall, DOT staking is easy to do and rewarding. You can start earning by doing the five simple steps mentioned above. Remember to set your staking goals so you can tailor your strategies to what you want to achieve. So far, Polkadot has been stable as it remains in the top 10 cryptocurrencies with the highest market cap. If you wish to learn more about this coin, visit its official website here.
