Cryptocurrency staking is a passive form of income. It is available to coin owners who work on platforms that support the Proof of Stake (PoS) algorithm. Staking returns fluctuate widely.

Some coins bring 3% per annum (for example, Bitcoin), others – more than 150%. Some cryptocurrency deposits are considered more reliable than others. Based on this, the interest rate is formed. However, due to the high volatility of cryptocurrencies, the risks of loss are always present.

Bitcoin staking

Like other staking platforms, Binance offers a 3% annual interest rate for BTC.

The high demand for BTC is explained by the fact that:

  • on popular crypto exchanges and p2p platforms, it is easy to find an offer to sell/buy BTC for USD or another fiat, while sometimes there is no demand for new coins at all;
  • The price of the coin is growing rapidly. This is due to the limited number of coins of 21 million, which creates an organic deficit;
  • there are many ways to cash out for fiat currencies: crypto ATMs, Telegram bots, etc.

Binance offers an unlimited deposit with a minimum deposit of 0.001 BTC. The depositor has the right to withdraw coins from the site at any time.

For example, you can shack bitcoin on the WhyBit and Pancakeswap exchanges. The first offers up to 13% per annum on a deposit for a period of 180 days, and the second – up to 5.68% paired with ETH on an unlimited basis.

How to make a CAKE

When deciding how to choose a coin to stake, CAKE is usually mentioned right after BTC; the main token of the Pancakeswap decentralized exchange. The user is provided with 3 ways to create a deposit:

  • IFO;
  • auto;
  • manual mode.

The IFO method involves reinvesting profits from staking into new projects. This can bring both profit and loss. The IFO CAKE yield is 69.47% per annum. The deposit is unlimited, and coins from the deposit can be withdrawn at any time.

Auto CAKE provides a slightly higher rate – 69.53% per year. Profit is automatically reinvested in staking and increases the profitability of the user’s deposit. The method is suitable for long-term investments.

The manual CAKE staking mode brings profit up to 53.62% per annum. The income goes to the MetaMask or TrustWallet wallet. The received coins can be used at will: convert to fiat, change or hodle.

Staking returns as a high-risk instrument

There are dozens of assets on the Pancakeswap exchange with a return of over 120% per annum. These include the XWG token with an annual return of 173.19% recorded in December 2021 and THG with a rate of 138.56%. The staking of these coins is similar to other coins.

How to compare projects?

It should be understood that one superficial understanding of what staking is is not enough for profitable investment, staking cryptocurrencies. Almost every exchange has offers with a yield of 100% per annum. To minimize risks, it is recommended before investing:

  • read WhitePaper;
  • get acquainted with the development strategy of the project and its team;
  • analyze trading volumes and interest in each of the coins in the community;
  • evaluate the significance of developers’ ideas.

This approach can help mitigate the risks, but certainly does not eliminate them completely.