Staking has become the new normal in the crypto space. You can earn rewards while supporting the security and maintenance of blockchain networks. In this roundup, we'll look at 3 top staking projects investors should look out for in 2024.
What is Staking?
In simple terms, staking is when users lock up their tokens to help secure the blockchain network. It also allows crypto holders to earn passive income by using their digital assets without selling them. It’s like the crypto version of a high-interest savings account.
When you put money in a savings account, the bank uses your funds to lend out and, in return, gives you a small share of the interest they earn—though, let’s be real, that interest rate is usually pretty low.
Staking is similar but with much higher returns. You lock up your crypto to help run the blockchain network and keep it secure. In return, you earn rewards, usually through more crypto. These rewards are calculated as percentage yields much higher than what you’d get from a bank account.
Staking is now a way for people to make money in crypto without having to trade or sell their coins. You’re not just holding onto your assets but working them.
Kelp DAO
Kelp DAO is a decentralized platform designed to help users maximize their staking rewards through liquid restaking, specifically on the Ethereum network. Developed by the team behind Stader Labs, Kelp DAO allows you to restake your Ethereum or Liquid Staking Tokens (LSTs) to earn additional rewards by securing other decentralized services on the network.
Traditionally, staking involves locking up your assets for a set period, which means you can’t access or use them until the period ends. Kelp DAO changes this by offering liquidity through its token, rsETH. When you stake your assets with Kelp DAO, you receive rsETH, a token representing your staked assets. This allows you to trade, invest, or use the token in decentralized finance (DeFi) applications while your original assets remain staked and you continue earning rewards.
Kelp DAO streamlines the staking process by selecting and whitelisting high-quality services on your behalf, saving you the effort of researching where to stake. The platform also automates reward management, allowing you to easily access the rewards you earn without manually handling multiple services.
Additionally, the rsETH token can be exchanged or swapped for other cryptocurrencies, such as Ethereum or Bitcoin, providing even more flexibility. By using Kelp DAO, users not only benefit from the security of staking but also enjoy liquidity and ease of use, making it an efficient solution for maximizing returns on staked assets without sacrificing access to funds.
Lido
Lido is one of the most popular liquid staking platforms, where you can stake your assets on multiple blockchain networks like Ethereum, Solana and Polygon while keeping your liquidity. With traditional staking, your assets are locked for a fixed period, and you can’t use or trade them. Lido changes this by issuing liquid staking tokens representing your staked assets, like stETH for Ethereum.
When you stake with Lido, you get stETH in return. These tokens let you keep your assets liquid, meaning you can trade, invest or use them in DeFi applications while still earning staking rewards. The staked assets continue to support the network and you get regular rewards that reflect the performance of your staked tokens.
Lido automates the staking process. Rewards are sent directly to you without the need to claim, and the platform handles everything related to the staked assets. With support across multiple networks, Lido is a great way to stake for those who want to earn passive income without giving up liquidity.
However, be aware of the risks, like price divergence between stETH and ETH during market volatility. Lido doesn’t charge a staking fee but takes a small percentage of the staking rewards as a service fee.
Rocket Pool
Rocket Pool is a decentralised staking platform that focuses on Ethereum staking, allowing users to stake their ETH in a flexible and decentralised way. What sets Rocket Pool apart from other platforms is that it allows users to not only stake their ETH but also become node operators with a lower entry point than most other Ethereum staking setups.
Typically, you need 32 ETH to run a node, but with Rocket Pool, you can do it with 16 ETH, making it more accessible for individual users. If you don’t want to run a node, Rocket Pool also allows you to stake as little as 0.01 ETH. In return, you get rETH, a liquid staking token that represents your staked ETH, which can be traded, used in DeFi, or held while earning rewards.
When you stake with Rocket Pool the platform manages the technical aspects of running a node or staking your ETH, so you don’t have to.
The platform takes a fee on rewards generated through staking but these fees are competitive within the industry. Rocket Pool prioritizes decentralization and gives you flexibility with your staked assets through the liquid rETH token.
Conclusion
Staking lets you earn rewards while supporting blockchain networks. With options like liquid staking, you can keep your assets flexible and still collect returns. The best choice depends on your goals—liquidity, higher rewards, or simplicity. Knowing what each option offers lets you make the most of your crypto.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
