The pros and cons of staking cryptocurrencies

A viable option for long-term crypto token holders, staking pools offer the promise of generating returns alongside the capital gains from token appreciation.

One can invest in a stake pool with a fraction of the number of tokens required to become a validator on a PoS blockchain, while the staking pool rewards users on a daily, weekly, or quarterly basis, depending on the cryptocurrency is staked. For example, investors can stake their ETH tokens in a staking pool on Coinbase for daily rewards and no minimum balance requirement.

Another popular blockchain for staking tokens is Cosmos, the second largest ecosystem on the blockchain. Investors can also stake their tokens on many chains available in the Cosmos ecosystem via various validators.

The choice of staking pool depends on a number of factors, including commission rates, which typically range from 5% to 6%, and how they contribute to the ecosystem, such as: B. Creating code for the projects they validate. The annual percentage rate (APR) varies from chain to chain, with Cosmos Hub offering 15% APR, while Osmosis offers 60% and Juno offers 150%, which is significantly higher.

Aside from these factors, many staking pool operators offer unique value propositions that can make them attractive to potential stakeholders. A relevant example here is Cosmos Antimatter, a new emerging Cosmos ecosystem validator that encourages decentralization within the validator network. The main goal is to ensure that no validation cartels are formed while giving away 100% of their profits to the stakeholder ecosystem.