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If you are a long-term investor, trader, or just a cryptocurrency enthusiast looking to learn about the world of cryptocurrencies, this article talks about an interesting concept – crypto staking – that will help you make extra income even when you are sleeping.

For those who are not aware about crypto staking, we will first learn what is crypto staking, which blockchain networks can offer such a feature, and what are the average yields on crypto staking. Furthermore, we will conclude our discussion by talking about the pro’s and con’s of availing such a feature and if we were to stake a cryptocurrency then, how should one select the best cryptocurrency exchange in India that is offering such a feature.

Earlier, blockchain networks functioned on a proof of work ( W) model that required long hours to solve mathematical equations to verify transactions on a blockchain network. Such long hours meant abundant use of computational energy that negatively affected the environment. To solve this issue, blockchain network providers started adopting an advanced proof of stake (PoS) model that not only preserves the environment but gives cryptocurrency investors a passive income stream.

With the proof of stake model, one can verify blockchain transactions by staking their cryptocurrency instead of solving complex mathematical equations. When you stake your cryptocurrency, network providers award you with more coins as rewards, and that is how one can earn an extra income on their idle investments via staking their cryptocurrency. For one to stake its cryptocurrency, the coin has to run a proof of stake network. Crypto coins such as Ethereum, Cardano, Polkadot and Solana are currently operated on proof of stake n and can be used for staking purposes.

An investor can either participate in crypto staking directly or via cryptocurrency exchanges in India. For an investor to directly participate in crypto staking, one has to first buy crypto coins that use a proof of stake network and move it to a blockchain wallet, after which a pool of crypto traders can combine their funds and earn coins in exchange for their crypto staking. Usually staking pools require a lot of time and skills and the rewards are higher on networks that have high barriers to entry. Majority of the staking pools have a minimum investment requirement.

However, many cryptocurrency exchanges in India, such as Zebpay, offer staking options to their investors through Zebpay Earn and Zebpay Lend programs. An investor has to block its investment in coins for a period of time for which they are rewarded a fixed interest rate up to 10% p.a.

An investor’s crypto coins are in possession of the investor when the coins are staked, however at the time of staking they can’t be sold. Only when an investor unstakes the coin can the investor sell or trade on those coins. Usually the longer you keep your coin at stake the better return you are promised by the cryptocurrency exchange. Now that we have understood what crypto staking is and how it works let us look at some average yields on staking cryptocurrencies.

In addition to the normal price appreciation on cryptocurrencies, India’s cryptocurrency exchange – Zebpay offers daily fixed returns on selected cryptocurrencies. Coins such as Bitcoin, Ethereum, Polygon (MATIC) and  Binance USD give daily fixed yields between 0.5% to 4%. More than INR 2 crores has been distributed through ‘Zebpay Earn and Lend’ program.

Like any other investment, there are positives and negatives. Similarly, crypto staking has two sides to it. One, as an investor, you get a chance to earn extra income on your idle investments. The second side is, since crypto coin prices are volatile, one can get stuck on a coin whose prices might fall, and its price fall might outweigh its gain in interests earned. Therefore, as an investor, one should look at staking cryptocurrencies only when you are looking to hold your investments for a long period of time.

For investors who are not planning to trade their cryptocurrencies constantly, crypto staking can be a profitable way to earn extra income for them. However, for investors that are trading and have idle coins left on the days that they are not trading they can earn extra income in the form of yields. There are several cryptocurrencies that use proof of stake models and can be used to earn a return on crypto staking. As an investor, one should not get swayed by the coin that offers the highest returns on crypto staking, but look at coins that are fundamentally sound and have a strong business model and team to support it.

Furthermore, as an investor, one should also keep in mind that the cryptocurrency wallet they choose should be secured from any third party frauds. For that, one should choose the right cryptocurrency exchange that is secured. Zebpay – India’s leading cryptocurrency exchange provides top of the edge, secured wallets that allow investors to not only conduct crypto trading and investments but also allows crypto staking through their Zebpay Lend  scheme.

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