Solana is in the top five cryptocurrency by market capitalization and saw an increase of about 12,000% last year attracting more and more investors to the coin. Based on functions and utility, it is a strong competitor with Ethereum which has recently been experiencing a price downfall. Solana has been labeled as the Ethereum killer because of its smart contract utilities and its blockchain features for decentralized applications.
While buying Solana and HODLing it until the price goes up is a great option for turning a profit, it requires a lot of time and work. A better way to turn a profit would be by earning interest. Earning interest in cryptocurrency can be done through various mediums but since staking is the most popular, we would explain how to earn good interest on Solana based on that. Staking is a way to put your crypto to work and earn rewards on it. Staking cryptocurrency is a process that involves committing your crypto assets to support a blockchain network and confirm transactions. Staking can be a great way to use your crypto to generate passive income, especially because some cryptocurrencies offer high-interest rates for staking. Staking isn’t an option with all types of cryptocurrency as many cryptos use the proof of work model to add blocks to their blockchains. The proof of stake model on the other hand has been beneficial for both cryptocurrencies and crypto investors. Cryptocurrencies can use proof of stake to process large numbers of transactions at minimal costs. Crypto investors also get the opportunity to collect passive income from their holdings. With that, if you are a new investor, there are cryptocurrency scams investors should know.
There are many benefits you stand to gain from staking Solana. Apart from it being an easy way to earn interest on your cryptocurrency holdings, you don’t need any equipment for crypto staking like you would for crypto mining. You also get to take an active part in the management of the blockchain because by staking your Solana, you help maintain the security of the blockchain and it is way more environmental friendly than crypto mining.
Here’s how staking works.
Coins are pledged to the cryptocurrency protocol and the protocol chooses validators from the list of traders or investors who have pledged their coin to confirm blocks of transactions on the network. The more coins you pledge, the likely you are to be chosen as a validator. So how does being a validator benefit you? Every time a block is added to the blockchain, new cryptocurrencies are minted and distributed as staking rewards to that block’s validator. That’s how you stake and earn.
There are various apps you can utilize for the purpose of staking Solana and they have different perks and interest rates.
Nexo. With Nexo, you can earn up to 8% on Solana, the interest is compounded daily, there are no hidden fees or commission and you have full control over your assets. Your staked crypto is also insured for up to 375 million USD. All you have to do is open the Nexo platform (nexo.io) or the Nexo app, register with your email address, click on the “settings” menu in the “my profile” section, and activate the option to earn in nexo.
Binance. Binance staking has launched a new high-yield activity. Stake your SOL to earn up to 43.79% annual percentage yield (APY). The locked staking feature is on a first come, first served basis, and the maximum staking limits as well as the standard annualized interest rate based on the duration.
FTX. With FTX, you just go on the invest tab, once you’re enabled for trading on FTX US, tap stake. Tap the button that says stake your crypto then tap start staking.
Another way to earn good interest on Solana is crypto lending, you could earn up to a 15% APY, and platforms that offer this service include Celsius, CoinDCX, and Coin Loan. Earning interest on Solana is obviously better than leaving cash in your traditional bank account. By staking your SOL and earning interests, you have sent your money to work for you. You can also decide to compound the interest by continually reinvesting it. Now you can sit back and enjoy your passive income.