Staking is an excellent way to generate passive income as a retail investor. Especially with Cardano, staking is worthwhile in the long term because the network has proven to be sustainable and reliable. We recommend trying Cardano Staking if you want to dive into the world of staking.

In this article, we explain how staking works in general, how you can start with Cardano staking, and where you should start Cardano staking. What are the best platforms and how do they work? Let's dive right in.

When it comes to staking, we are talking about a process in which you use tokens from a crypto network (e.g. Cardano’s ADA token) to validate transactions within the network. The basis for staking is the Proof-of-Stake (PoS) consensus mechanism. This is an alternative to Proof-of-Work (PoW) used in Bitcoin. Modern cryptocurrencies like Cardano, Solana, or Algorand use this consensus.

All owners of the network token can participate in the PoS. You deposit tokens into a staking pool. Then a random selection is made as to which participant validates the transaction. The probability increases with the number of tokens used. The PoS has the advantage that it is much more energy-efficient and involves the entire community of a blockchain network more equally than PoW.

Of course, users who make their tokens available to a staking pool receive rewards in return, mostly in the form of new coins, when they choose to validate them. This allows these users to regularly earn new coins through staking and thus build up a passive income.

Cardano is a cryptocurrency founded by Ethereum co-founder Charles Hoskinson. The project started in 2017 and since then has almost always been among the 10 most valuable cryptocurrencies by market capitalization. 

Cardano has set itself the goal of researching the vulnerabilities of other blockchain networks, fixing them and thus creating an optimized network that is decentralized, secure and highly scalable. Cardano's network token is the ADA and is used for transactions on the Cardano blockchain. The blockchain uses the proof-of-stake consensus mechanism.

Cardano features a long-term development plan divided into 5 major phases. These phases are:

• Byron: Foundation
• Shelley: Decentralization 
• GoguenSmart Contracts
• Basho: Scaling
• VoltaireGovernance

Here you can find more information about the Cardano Roadmap. 

At the moment Cardano is in the basho phase and the developers are working on making Cardano highly scalable and achieving extremely fast transaction speeds.

As already mentioned, Cardano uses the efficient Proof-of-Stake consensus mechanism, which not only keeps transaction costs low, but also invites users to stake. The users who are in possession of ADA tokens can stake them and thus participate in the validation process of the Cardano blockchain. 

The special thing about Cardano is that the network has the highest staking quota of all known blockchain networks. Up until last year, around 70% of all ADA tokens in circulation were staked. 

There are basically 2 ways to operate Cardano staking:

1. Stake yourself
2. Staking through an exchange or broker

Let's briefly describe what both can do.

In order to operate Cardano staking yourself, you need a suitable Cardano wallet and must delegate your ADA tokens to a staking pool from this wallet. There are two different ways to do this:

• Daedalus is a desktop wallet and is recommended for more advanced Cardano users.
• Yoroi is more geared towards beginners. You can use the wallet as an extension for your browser.

The process for both wallets for Cardano staking is similar. Here's a guide to setting up and staking. You can also find an overview of the Cardano staking pools to which you can delegate your ADA tokens here. 

If setting up the wallet and delegating to the Cardano staking pools is too complicated for you, you can use certain platforms on which you can do Cardano staking. Crypto exchanges specialize in cryptocurrencies, while brokers are mostly traditional platforms that also offer cryptocurrency trading.

Binance is the world's largest and most well-known crypto exchange. Cardano staking is possible on it without any problems. In addition to Cardano, Binance has around 30 other cryptocurrencies to choose from that you can stake. Overall, Binance offers over 100 cryptocurrencies that you can trade.

>>CLICK HERE TO STAKE AT BINANCE<<

Coinbase is another major exchange where you can stake Cardano. The company is listed on the American NASDAQ and offers an excellent selection of different cryptocurrencies.

>>CLICK HERE TO OPERATE AT COINBASE STAKING<<

Kraken is the third exchange in our selection. The platform offers a simple user interface and a total of 12 cryptocurrencies (including Cardano) that you can stake. 

>>CLICK HERE TO STAKE AT KRAKEN<<

The well-known broker eToro offers Cardano staking. As a user, you only have to open a trading position for the Cardano ADA token. You must then have the token in your portfolio for at least 9 days. After this time, eToro will automatically start staking for its users. At the end of the month, the platform distributes the rewards to its users.

When staking Cardano, the returns depend on a variety of factors. These include the size of the staking pool, the pool fees, or the platform fees. Most platforms give you 4-6% annual returns.

You can also use a staking calculator to calculate your return. You can use this link to easily calculate your average returns. 

The proof-of-stake consensus mechanism was a big leap forward in the field of cryptocurrencies. This makes transactions cheaper and more efficient. Furthermore, staking cryptocurrencies offers investors the opportunity to generate high returns. Let's talk about the best staking coins for the year 2022.

In the financial world, some investors seek high-risk investments because they also come with high returns. They also tend to mix those risky investments with safe ones, in order to minimize their risk. Traditionally, investors used to have saving accounts that yielded them interests. In today’s economies, advanced countries’ interest rates average around 2% per year. You can forget about thinking to invest in risky countries that are either corrupt, poor, or that have been sanctioned.

Enter cryptocurrency staking, which is the exact same thing people do in the “traditional financial world”. Instead of locking money with banks, they lock an amount in a cryptocurrency wallet and earn high yields. In turn, they participate in the operation of a Proof-of-Staking-based blockchain system. Different cryptos have different yields and maturities.

Anything that yields high is risky. When staking cryptos, there are many risk factors that might affect your staking experience:

• Slashing problems: when your validator is being punished by the network for abnormal behaviors (ie. technical problems occur)
• Crypto price depreciation: When you stake, you lock cryptos. Let’s say you froze 100$ worth of X, to yield 10%. Sweet, 10$ profits! Then because of cryptocurrency volatility, the worth of X becomes 10$, yielding in turn 1$…NOT SWEET!
• Lost accounts: Yes, this might occur as many hackers are on the hunt for weak security standards. Recently, an exchange got hacked and you can read about it here.
• Network Centralization: aka the 51% attack, which takes ahold of the whole blockchain.
• Validators “forgetting” to pay rewards: Just like you would follow up on your bank fees, you should follow up on when your interest is paid up, as sometimes technical glitches might happen.

Nevertheless, some exchanges did prove to be worthy of investors’ trust and solid businesses. You should always be on the lookout for companies that listen to their customers, have awesome customer support, and are expanding regularly. Binance is one example of such reputable exchanges, and that’s why we’re going to show you a step-by-step guide on how to stake with them.

Algorand is another modern cryptocurrency and one of the best staking coins. Due to increased adoption and awareness, the ALGO token has increased by over 600% in the last 12 months. For many, Algorand is the next "Ethereum Killer".

Algorand offers annual returns averaging 4.7%. However, staking is still relatively cheap and the upside at Algorand is currently much higher than with the aforementioned staking coins.

Solana (SOL) experienced massive hype in 2021. As a "younger and more modern" version of Ethereum and Cardano, the network made itself popular with numerous investors. Above all, Solana scores with an extremely high transaction speed of up to 50,000 transactions per second. 

The modern proof-of-history consensus mechanism makes these speeds possible. But Solana is also a solid option for staking. The annual rate of return is 6.6 percent. The “lock-in period” is only 5 days. Furthermore, there is no minimum limit for staked tokens, which makes the SOL token one of the best staking coins.

Cardano has long been referred to as the "Ethereum Killer". Improving the Ethereum network was also the declared goal behind the development of Cardano. In contrast to ETH, Cardano has been using proof-of-stake for a long time. This year, the value of the native ADA token increases massively, especially in autumn.

The annual return at Cardano Staking averages 6%. In addition, Cardano scores with the lack of a mandatory “lock-in period”, during which the staked tokens cannot be mobilized.

Binance is the largest crypto exchange in the world. Their own platform Token Binance Coin was a huge success and is now the third-largest cryptocurrency by market capitalization. The Binance ecosystem will benefit from the increased trading activities on the entire crypto market in the future.

The minimum use of tokens for staking is extremely small and the Binance offers very high staking returns. BNB is one of the best options among staking coins, especially for investors who are new to staking. You can get to Binance here.

Ethereum is the second-largest cryptocurrency after Bitcoin and the largest network for decentralized applications. In the future, it has the potential to become the dominant network for staking. Investors have already deposited $ 21 billion worth of coins into the Ethereum 2.0 staking pool. 

ETH still has a few question marks among staking coins. The transition from proof-of-work to proof-of-stake only started in the last few months. Nevertheless, the network offers huge potential for high staking returns through its already existing enormous amount of adoption.