Staking cryptocurrency is a common method for individuals to delegate their coins to earn additional income. Similar to a traditional fixed deposit at a bank, individuals can delegate funds to earn a return on their investment. In a world of negative interest rates, the benefit of staking is a positive yield that can be compounded daily.
In fact, the entire staking industry is currently worth approximately 18 Billion, which makes up nearly half of the entire crypto market cap. Several Proof-of-Stake (PoS) coins attract huge staked volumes among investors and serious crypto enthusiasts for their attractive yields and long-term growth. One of the top staking coins with more than $4 billion staked is Algorand (ALGO). This article will describe what staking Algorand means and compare the best places to stake ALGO.
Algorand is a popular digital ecosystem that was designed to provide fast, secure and decentralized transactions to solve the real-world challenges faced in the traditional finance industry. It is an open and public network that is focused on security, scalability and smart contract functionality to create and operate decentralized applications (dApps).
At the time of writing, the native coin of the Algorand protocol (ALGO) is the 22nd largest cryptocurrency with a market capitalization of 9.74 Billion with a 24-hour trading volume of 397 Million. The blockchain platform uses a Pure Proof-of-Stake (PPoS) network validation process that distributes ALGO coins into circulation. Addressed that hold at least 1 ALGO within a non-custodial wallet are entitled to staking rewards.
Algorand can be securely stored and staked on the official Algorand Wallet to earn rewards up to 6% APY. ALGO coins held within the wallet will begin to automatically accrue staking rewards which can be viewed at any time on a iOS or Android device. Other ways to stake Algorand include centralized crypto exchanges and wallets such as Binance, Coinbase, Crypto.com and Ledger Wallet. These platforms are popular with individuals that stake multiple coins or frequently trade between other coins.
Algorand holders can stake ALGO coins to earn between 2% and 7.2% Annual Percentage Yield (APY) depending on the wallet, exchange and validators. The staking APY does not take into account network inflation metrics and is currently closer to 0.74% APY according to on-chain data. Therefore, supported wallet and exchange ALGO staking rewards are not guaranteed and can be adjusted daily.
These are the best wallets and exchanges for staking Algorand to earn passive ALGO rewards based on our reviews:
- Binance (best overall for staking)
- Ledger Wallet (best for security)
- Coinbase (best for beginners)
- Crypto.com (best for flexible staking)
- Atomic Wallet (best staking wallet)
- Bitfinex (best for ease of use)
Select cryptocurrency wallets and trading with soft staking features to allow individuals to delegate Algorand to earn a passive income. The following table is a comparison of the top wallets and exchanges that support ALGO staking. The information below are estimates only and therefore subject to change without notice depending on the provider, validators and network.
Binance is a world-leading digital currency exchange with millions of users worldwide. Based on trading volume and liquidity, Binance is also the biggest exchange in the world that offers a variety of financial products and services such as Binance Earn. This part of the exchange gives the ability to earn interest on crypto assets or be rewarded with additional tokens through its one-click staking platform. Staking Algorand is even available for US residents through the Binance.US website.
ALGO owners have the option of 'Locked Staking' for a duration of 30, 60 or 90 days. The latter provides the highest staking yield of 5.80% at the time of writing and is often sold out due to its popularity. The 30 and 60 duration periods offer an estimated staking pay-out of 4.50% and 4.90% APY. Participation in the ALGO staking pools offered by Binance are based on a first-come, first-serve basis.
To be eligible for staking Algorand on Binance, individuals must hold a minimum amount of ALGO within their wallets. The minimum staking amount of 10 ALGO for the 30, 60 and 90 day locked terms. The staking reward is paid out daily and can be viewed in the "Earn" section of the account. The subscription date, accumulative amount, number of staked days, pay-out frequency and redemption date are shown for transparency. There is the option to redeem the amount of Algorand coins staked, however, this will result in the loss of the staked amount earned.
While there is high demand for Binance staking pools such as Algorand, a benefit of using Binance's 1-click staking platform is the low entry barrier and high yield which is suitable for beginners. Similar to a traditional fixed-term deposit at a bank, Binance's fixed staking allows users to lock in their ALGO tokens and earn a passive income.
In short, Binance is one of the best staking platforms for Algorand that will suit beginners and experienced investors alike. The staking pay-out is daily, the estimated rewards are competitive and there are zero Binance staking fees.
Coinbase is one of the world's most well-known exchanges in the world that supports ALGO to buy, trade, sell and stake to earn rewards. The exchange is one of the most popular for ALGO staking due to its simplicity and ease of use. Coinbase supported Algorand staking on its exchange on December 17, 2020 and is a useful feature for existing Coinbase users that own Algorand to stake their assets.
However, Coinbase is not available in all countries as there are specific region restrictions. For example, ALGO staking is not supported in North America, South America, Australia, Europe, Middle East, Asia and Africa. Therefore, residents in these regions that have a Coinbase account and own Algorand will not be eligible for ALGO staking rewards which is a major negative.
|Minimum Amount||Pay-out Frequency|
For investors outside these regions, users on the exchange that purchase or transfer ALGO tokens can earn up to 4% APY. Compared to Binance, the staking reward on Coinbase is much lower. One positive with Algorand staking on Coinbase is the minimum amount required of 0.01 ALGO. This is a very low barrier for entry that will be accessible for many investors. Furthermore, staked ALGO tokens are not locked in for a specific duration. Individuals are free to redeem ALGO tokens at any time to withdraw or trade for other digital coins.
Overall, Coinbase is a trustworthy, beginner-friendly and secure platform for staking Algorand. However, the benefit of staking ALGO tokens is limited compared to the best exchanges for crypto. For instance, Coinbase does not support several countries to stake ALGO, has a low APY staking reward and a 25% staking fee or commission.
Ledger is a hardware wallet company that specializes in the storage of digital currencies including Algorand. The tokens are held offline on a storage device that can be carried by the rightful owner. Ledger also supports staking of ALGO tokens held on the wallet to earn rewards.
The best part about staking Algorand on a Ledger wallet apart from its bank-like security is the ability to choose a preferred validator. For experienced users, this option can be beneficial to hand-pick a staking pool with desirable staking APY and validator information. Although, there are staking risks to be considered to avoid validators with a poor track record and excessive commissions.
To stake Algorand with a Ledger, there is a minimum amount of 1 ALGO required that must be stored on the hardware wallet. The rewards are calculated and distributed to the network which are passed onto the user approximately every 20 minutes. However, the individual will need to manually claim the ALGO staking rewards using the Ledger Live software. This can become a tedious task for Algorand investors that want to maximize the compounding of their assets frequently (i.e. daily). Therefore, the Ledger Wallet is best suited for serious Algorand stakers.
Another disadvantage with staking Algorand on the Ledger Wallet is the up-front cost to purchase the hardware wallet. In comparison, using a software wallet or crypto trading platform is free to use. Therefore, Algorand investors need to find a compromise between the security of the asset and the cost of a hardware wallet to stake ALGO.
Crypto.com Earn is a world-class service for investors to earn interest on digital assets using the popular Crypto.com App. Traders can earn staking rewards on 28 supported tokens held within the Exchange wallet. Users can create an account with Crypto.com Exchange to benefit from the soft-staking feature and link it to the Crypto.com App for buying and selling crypto with fiat currency.
Algorand staking was introduced to Crypto.com Exchange on July 17, 2020. Unlike Binance which offers fixed terms only, users that deposit Algorand to the Crypto.com Exchange staking wallet can earn ALGO rewards up to 1% without a commitment period. This is a benefit for individuals that prefer the flexibility to earn staking rewards and withdraw at any time without having to lock up the tokens for extended durations. However, the estimated staking rewards are reduced.
Crypto.com Exchange offers two staking rates depending on the amount of the platform's native CRO token staked. For individuals with less than 100,000 CRO staked on the App, the staking reward for Algorand is 0.5% APY. The reward can be increased to a maximum of 1% by staking more than 100,000 CRO tokens in addition to ALGO. This is the equivalent of USD 59,000 at the current prices and is not affordable for many investors to obtain the higher staking rate on the platform. Moreover, the highest staking reward for ALGO on Crypto.com Exchange is still lower compared to Binance and Coinbase.
|Minimum Amount||APY (<100,000 CRO Staked)||APY (> 100,000 CRO Staked)|
Staking CRO tokens does provide additional benefits on the platform, however, there is little incentive to stake CRO tokens to obtain the higher ALGO staking reward. For instance, the maximum ALGO staking reward on Crypto.com Exchange of 1% is less than Binance and Coinbase which are 4.5% to 5.8% and 4% respectively.
In summary, Crypto.com Exchange offers a simple and reliable platform to stake Algorand to earn up to 1% APY. The flexible staking terms are useful for investors, however, the reduced staking rewards and 650,000 minimum staking amount are negatives. Furthermore, the incentive to unlock the highest APY reward for staking 100,000 CRO tokens is not feasible for many investors.
Bitfinex features a sophisticated trading platform for speculating on the markets and is popular for its deep liquidity. The exchange is making waves in the staking industry with its no-hassle soft-staking program for 10 digital assets including Algorand. Similar to competing exchanges in this article, the benefit of using Bitfinex is the flexibility to stake and trade Algorand using a single platform.
The staking rewards for Algorand on Bitfinex range between 3% and 5% APY with the ALGO rewards paid out weekly with a mid-week snapshot. This is a disadvantage to other exchanges such as Binance, Crypto.com and Coinbase which distribute the staking rewards daily. Bitfinex does not take a fee but does hold a small amount of the reward, which is essentially a small commission for providing the staking service.
Bitfinex is a great option to stake Algorand for its security as the staked ALGO tokens are transferred to its cold wallet storage system. This protective measure significantly reduces the risk of hackers and slashing. However, the automatic weekly pay-outs is a disadvantage compared to other platforms which are daily. Therefore, Bitfinex users have to manually send a transaction with 0 ALGO to claim the rewards sooner.
Atomic Wallet is a decentralized online cryptocurrency wallet that is used by more than 3 million users worldwide and supports more than 500 coins and tokens. The wallet is suited to crypto investors looking for a simple, safe and convenient means to store and stake multiple digital assets such as Algorand.
The advertised staking reward for Algorand on the website is 7.2%, however, this is an estimate only. The actual reward can vary daily and depends on several factors such as the amount of ALGO coins staked on the network and the commission set by the selected validator for example.
A minimum of 1 ALGO must be held in the wallet to receive staking rewards up to 7.2%. The rewards are distributed as soon as a new block is added to the blockchain and held within the user's Algorand wallet address. The wallet can be installed on a desktop or mobile device to monitor the staking rewards and overall portfolio.
Atomic Wallet is a reliable and safe way for individuals to stake Algorand. However, an intermediate level of expertise is required to download, set up the wallet and select a validator. This is a negative when compared to soft staking exchanges which are better suited for beginners in our opinion.
KuCoin does not offer ALGO staking on its trading platform at the time of writing. There is the option to earn interest on Algorand through its Pool-X lending and borrowing platform which offers an estimated annual interest rate of 3% at the time of writing.
Algorand offers a positive return on investment, there will be profitable as long as the asset price does not decline below the purchase price. Moreover, the estimated staking returns of 2% to 7.2% are greater than earning interest in a traditional bank account or cryptocurrency mining which requires upfront capital for expensive equipment.
To wrap up this article on the best places for staking Algorand, using an exchange such as Binance, Coinbase or Crypto.com Exchange is a suitable method for investors with varying levels of expertise. The aforementioned providers are some of the best staking platforms due to their ease of use, accessibility, security, staking flexibility and features. For serious Algorand investors, the Ledger wallets or official Algorand Wallet would be a suitable option.
Kevin started in the cryptocurrency space in 2016 and began investing in Bitcoin before exclusively trading digital currencies on various brokers, exchanges and trading platforms. In 2019, he started HedgewithCrypto to publish informative guides about Bitcoin and share his experiences with using a variety of crypto exchanges around the world.