Staking is a more efficient and eco-friendly alternative to mining. It is based on the progressive Proof-of-Stake (PoS) consensus mechanism and is well-suited for passive crypto earnings. Let's discuss which PoS cryptocurrencies are best to choose in 2024 to maximize profit with minimal risks.
Staking, profit, Proof-of-Stake: what's the connection?
The mechanics of staking involve users earning passive income by storing their funds in a crypto wallet or on a specialized platform, thereby providing activity and security to the blockchain network.
Cryptocurrency is necessary for the blockchain to maintain stable operation. The influx of it can be ensured by holders of crypto assets, and of course, not on a gratuitous basis. Smart contracts lock a certain amount of coins, and the choice of whose coins will be locked and subsequently compensated with rewards is random. The only thing that can influence it is the total amount of crypto assets in the user's account. The more they have, the higher the likelihood that they will participate in the operation. The PoS algorithm in this case becomes the most convenient solution.
Which PoS crypto is considered the most popular in 2024?
There are currently several dozen PoS assets on the market with great potential. The leaders in terms of market capitalization at the moment are as follows:
-
Ethereum (ETH)
The second most popular blockchain platform in the world and one of the leading platforms for creating decentralized applications. The market capitalization of ETH coins currently exceeds $276.5 billion.
In 2022, a major network upgrade of Ethereum occurred – The Merge, which involved transitioning from PoW to PoS mechanisms. The conditions for staking have changed with it. In 2023, the Shapella upgrade was successfully activated, creating convenient conditions for withdrawing funds from the deposit contract.
To become a validator on the Ethereum platform, a user needs to:
- Have at least 32 ETH in their account for deposit into a smart contract;
- Ensure round-the-clock connection of their hardware to the network.
Ethereum's prospects:
- Over 29.1 million ETH is locked in the deposit contract;
- 914,828 validators are operating on the blockchain;
- Staking rewards amount to 3.6% annually;
- Reward payouts are completely stable.
-
Solana (SOL)
This open-source blockchain platform outperforms its competitors due to its high performance. The network's functionality is supported by users holding the native SOL token.
Solana operates on the DPoS consensus algorithm. This means that anyone can participate in staking by delegating their tokens to a delegate. Statistics for Solana at the beginning of 2024 are more than promising:
- Approximately 385 million native SOL tokens are locked in the deposit contract;
- 1782 validators are involved in blockchain operation;
- Staking rewards for users amount to 7.85% annually;
- Reward payouts are estimated to be stable in 98% of cases.
-
Cardano (ADA)
The Cardano blockchain platform operates on the Haskell programming language. Among its main advantages are reduced program memory load, high computational speeds, and code simplification.
The Cardano network is suitable for staking for everyone, any network participant can take part in staking and earn from it. Cardano allows to create staking pools and to delegate shares for income and duty distribution. To get started, users need to have 500 ADA native tokens in their account, as well as funds to pay initial fees.
Cardano's prospects:
- There are currently over 3000 staking pools in operation;
- The staking reward is estimated to be around 3% annually;
- Reward payout stability is 94.4%.
-
Polygon (MATIC)
Polygon is a network for L2 solutions on the Ethereum platform. Initially, it was developed to solve scalability issues in the network. Users have access to delegated staking. There is no minimum entry threshold on the platform, meaning anyone can participate in it.
In 2023, the number of Polygon users approached the number of Ethereum users. As of the beginning of 2024, Polygon has these prospects:
- Over 3.6 billion MATIC tokens are locked in the deposit contract;
- 105 validators support blockchain operation;
- Users are rewarded with 4.95% annually for staking;
- Reward payouts are completely stable.
-
The Open Network (TON)
The Open Network is a decentralized network with the internal cryptocurrency Toncoin. In the summer of 2022, the network fully transitioned to PoS algorithms. Compared to Solana and Polygon, not every user can engage in staking on The Open Network. To become a validator, one must have at least 300,000 TON native tokens in their account and high-performance equipment.
Prospects of The Open Network at the time of writing:
- Over 437.5 million TON is locked in the deposit contract;
- More than 300 validators are involved in blockchain operation;
- The staking reward is estimated at 7% annually.
Conclusion
The landscape of staking in the cryptocurrency market for 2024 appears incredibly promising, offering numerous opportunities for investors to generate passive income. The transition to Proof-of-Stake (PoS) consensus mechanisms has revolutionized the way blockchain networks operate, making staking an efficient and eco-friendly alternative to traditional mining.
Among the top PoS cryptocurrencies for staking in 2024, Ethereum, Solana, Cardano, Polygon, and The Open Network stand out as leaders in terms of market capitalization, network performance, and staking rewards. Each of these platforms offers unique features and advantages, catering to a diverse range of investors and stakers.
If you want to learn more interesting facts about crypto then check out our blog! You might like our articles “Liquid Restaking Protocols: the New DeFi Primitive” and “Authorization vs. Success Rates”.
