TOP 11 best cryptocurrencies for staking in 2021

With the advent of the Proof-of-Stake consensus algorithm, mining has changed – users no longer need itbuy expensive equipment for mining cryptocurrency, and to launch a node and receive rewards, it was enough to block the coins in the wallet.

In this article, you will learn about the best blockchain platforms for cryptocurrency staking.

What is staking and how does it work?

Staking (staking) came to replace mining onProof-of-Work (PoW), which requires a lot of computing power, hardware and maintenance costs. Instead of buying staking equipment, users buy the cryptocurrency itself and place a bet to be eligible to add blocks and claim rewards for their stake in the network.

The first PoS blockchains were establishedhigh staking limits: users had to freeze thousands or even tens of thousands of dollars in their crypto wallet in order to qualify for rewards, confirm transactions, and add new blocks to the network. This problem was fixed in the next generation blockchains, which switched to the Delegated Proof-of-Stake (DPoS) algorithm.

In DPoS networks, validators play the main rolenetworks, which are responsible for validating and adding new blocks, ensure the security of the network and keep it running. Validators compete with each other to be the first to add a block and receive a reward, and in order to become a validator it is necessary to block a large amount in the wallet, which is not available to most users. In addition, validators need to configure nodes (nodes) and monitor the operation of servers.

Holders who simply hold small amountscryptocurrencies and want to participate in staking, they can become delegators. This means that they delegate their coins to validators and claim rewards without directly participating in mining. But delegators pay a commission on the profit, which, as a rule, is set by the validators themselves in accordance with the protocol limits.

Note:despite the fact that in fact modern blockchain networks are based on DPoS, their characteristics are often simply written as PoS, which can confuse inexperienced users. To know for sure, you need to study in detail the description of the platform on which you want to delegate your assets.

TOP 11 best cryptocurrencies for staking in 2021

Here's a selection of the eleven best cryptoassets for staking, with a breakdown of the advantages and disadvantages of each token.

Ethereum

Ethereum is the second largest cryptocurrency in terms of capitalization andthe largest blockchain with smart contracts, with a huge infrastructure of decentralized applications. The platform leads in the number of apps and tokens released on it, and the network is supported by a large community.

Since its inception in 2013, Ethereum has attractedto itself the attention of crypto enthusiasts, since it had wider functionality in comparison with the first cryptocurrency bitcoin. The platform provides the Ethereum Virtual Machine (EVM) and Solidity language for building decentralized applications (DApps) based on the Ethereum blockchain.

The platform is currently running on the mechanismPoW, but Medalla's PoS testnet has already been launched, where staking of BETH coins is available, tokens replacing the equivalent amount of ETH. Holders can now stake Ethereum and receive income up to 20% per annum to their wallet, but the coins will be blocked for almost two years.

Why is Ethereum one of the best staking coins?

The cryptocurrency is supported by a large community, andthe platform itself has considerable prospects. Despite the fact that the network is now significantly inferior to modern platforms in terms of performance, the developers are working on improving the protocol to ensure the transition to Proof-of-Stake.

Hard fork "London" is coming out very soon, whichwill introduce a deflationary mechanism by burning part of the tokens that miners receive as a reward. And in the next phase of The merge, scheduled for release in late 2021 - early 2022, the current Ethereum mainnet will merge into the Beacon Chain, marking the final transition to PoS.

Disadvantages of Ethereum

This platform is one of the first in its field,therefore, it is not devoid of shortcomings, which the developers are striving to fix with the appearance of the Eth 2.0 update. The main problems with the current Ethereum network include low bandwidth, scalability issues, and slow and expensive transactions. These challenges stand out especially against the backdrop of strong demand for DeFi products and Yield Farming. Ethereum is capable of processing up to 15 transactions per second in total.

Another obvious problem with Ethereum is its narrow focusSDK for application development. The platform supports the only programming language, Solidity, written specifically for this blockchain. This limits developers who work with other programming languages ​​and prefer to write code in them.

Cosmos Network

Cosmos is a decentralized network oran ecosystem of parallel blockchains based on the Tendermint consensus algorithm, which are interconnected but can function independently of each other. The Cosmos network is also called the "Internet of blockchains".

Cosmos Network solves the isolation problemblockchains by providing a unified infrastructure that allows them to interact.In other words, users can easily transfer tokens from one blockchain to another. This property is called interoperability. To enable cross-chain communication, Inter Blockchain Communication (IBC) was developed, a protocol that enables strong communication between different blockchains.

What makes ATOM one of the best staking coins?

Like Ethereum, the Cosmos Network has a largeinfrastructure supported by a large community of investors and developers who are constantly working on platform updates. For example, in early 2021, the Cosmos developers presented an update to Stargate, which improved the platform's performance and combined blockchains based on the Cosmos SDK using the Inter Blockchain Communication protocol.

The Cosmos network can interoperate with large blockchains such as Binance Smart Chain, Band Protocol, IRISNet, Kava, Ki Chain, Oasis Protocol, OKEX Chain, Persistence, Polygon and many more.

One of the advantages of the Tendermint algorithm, onwhich the Cosmos network is based on - instant completeness. This means that users can be sure of the completion of the transaction as soon as a new block is mined, which is not the case in Bitcoin and Ethereum PoW blockchains.

Another advantage of the platform is the principlemodularity, making it easy to develop applications for specific tasks without having to write source code from scratch. It also speeds up the creation and deployment of applications.

Cosmos Network problems

The first disadvantage of Cosmos is high competitionamong the more famous platforms such as Polkadot, Polygon and Ethereum. Sidechains like Polygon are implementing solutions that take market share from the Cosmos network.

The second problem is related to low useractivity. The Cosmos IBC protocol was launched in February 2021, and the ecosystem has only about 40 zones (network validator nodes), with 95% of the activity happening in only two zones. In addition, the US Securities and Exchange Commission (SEC) has twice criticized the ICO of the project and believes that the platform does not meet security concerns.

Cardano

Cardano – первая в мире считающаяся a decentralized platform built on scientific research and empirical evidence. The platform is also known as the "Ethereum killer". This protocol allows you to create and run blockchain applications and smart contracts like Ethereum.

The Cardano platform was developed back in 2014, butUnlike the Ethereum developers, the team did not quickly launch the protocol, but focused on researching and solving the problems of the blockchain industry. In 2017, ADA tokens were released, which act as a native cryptocurrency.

The Cardano network is based on two levels or layers(layers): The first layer is responsible for processing ADA transactions, while the second is responsible for the operation of the smart contract. Cardano is able to become one of the main competitors of Ethereum, not only because it has high bandwidth and does not have such pronounced problems with scaling, but also because the entire ecosystem consumes only 6 GW / h of electricity, which is only 0.01% of consumption of the bitcoin network. This makes the platform greener and more sustainable.

An interesting fact: the platform was named after the Italian mathematician Gerolamo Cardano.

Benefits of Cardano

Against the background of Ethereum, the platform is distinguished by the highnetwork bandwidth and low cost of transactions. Ethereum belongs to the second generation of blockchains while Cardano belongs to the third. The two-tier architecture makes the network more secure and provides the ability to implement scalability solutions.

The Cardano protocol has mathematically proven security, and the University of Edinburgh, the University of Connecticut, and the Tokyo Institute of Technology have contributed to the code.

disadvantages

One of the main drawbacks of Cardano is the low staking yield - 5.3% per annum. This is due to the fact that many users have blocked their coins, due to which the profitability has decreased.

Another significant disadvantage is the complexitydevelopment and ambition of a team that put all the chips on the table at once. This leads to the risk of future problems, due to which the release of updates will not be prompt or even suspended for an indefinite period. Moreover, this shortcoming is manifested now, since the developers have not yet implemented many of the projects that they conceived, and it is unclear when these projects will be ready and at what stage they are.

ZHCash

Multifunctional platform based on the standardZRC20 with master contracts aimed at business modernization and digitalization. ZHCash provides an advanced SDK and intuitive tools to easily and quickly develop decentralized smart contract applications and create tokens. Thanks to the ZHCash SDK, developers do not need to code from scratch, and minimum requirements are set for the software.

The platform supports the third PoS algorithmgeneration (Proof-of-Stake 3.0). This means that users' wallets are full-fledged network nodes and can act as validators, receiving rewards depending on the share they own. ZHCash supports the DGP decentralized governance protocol, which defines blockchain parameters using a smart contract and seeks to keep the number of forks to a minimum. In other words, developers do not need to create a branch for a new network to change how the protocol works, which makes the ZHCash blockchain flexible for improvements.

For comparison, we will give as an exampleEthereum, which is not the original blockchain, but its hard fork. The original protocol was renamed Ethereum Classic. For further changes, the developers will combine Ethereum with the Beacon Chain to form a new platform. This approach makes blockchain development tough and only complicates the process. At the same time, the developers, in any case, have the right to create new branches if they want to create a new platform based on ZHCash.

Why is ZHCash one of the best PoS staking platforms?

One of the key features of ZHCash isin a combined approach to networking: the platform combines the UTXO model, as well as PoW, PoS and DPoS algorithms, which stands out from most other staking blockchains. Blocks in the ZHCash network are formed within 2 minutes, and the block reward is 800 ZHC.

Developers can use a wide range oftools for building decentralized applications: ZHCash supports almost all popular programming languages, including Java, C / C ++ / C #, Go, Rust, Python, and Solidity.

ZHCash platform introduced a unique algorithmInvest Proof-of-Stake (IPoS), which allows hodlers to lease their tokens to validators, receiving income for this without having to freeze tokens in the wallet. IPoS is no longer found on any of the well-known PoS-based platforms.

Disadvantages of ZHCash

Perhaps the only significant drawbackplatform is a small capitalization compared to the industry leaders, although in terms of characteristics ZHCash is not only not inferior to them, but also in many ways superior.

The point is that developers are channeling moreefforts to develop, improve the UX and functionality of the platform, and leave marketing in the background. Despite this, the ZHCash community is actively growing, which indicates the high value and usefulness of the platform.

Polygon

Polygon Network, formerly known as Matic -a scalable decentralized network that provides frameworks for building a multi-chain Ethereum-compatible blockchain ecosystem. The platform is also called the "Internet of Ethereum blockchains".

Polygon platform solves problemsscalability of blockchains, as well as slow and expensive transactions without compromising network security. The protocol works on the principle of modular "security-as-a-service" and resembles the structure of the Cosmos Network, since it is aimed at interoperability of blockchains, but on the Ethereum network.

Why is Polygon one of the best staking blockchains?

Polygon platform is based on Ethereum -the largest DeFi ecosystem backed by a large community of crypto enthusiasts. The developers are constantly working to improve the network and strive to provide a scalable solution that will allow instant and cheap transactions.

Disadvantages of Polygon

One of the main problems is related to competition:solutions like MATIC are currently being developed and may be a better alternative. The problem is that Polygon focuses on the Ethereum ecosystem and does not use sidechains, while other new platforms target more globally and provide solutions outside of a single blockchain. Crypto enthusiasts believe Polygon is a temporary solution until new platforms emerge.

Another disadvantage is associated with the large number ofblocked assets. In the event that new, more efficient and flexible platforms similar to Polygon appear, the MATIC token rate may suddenly collapse.

Tron

Tron is another serious competitor to Ethereum withits own developed ecosystem, but with higher bandwidth: the Tron network is capable of processing about 2000 transactions per second. Despite the fact that the Tron platform has not offered the blockchain community anything new after Ethereum, it has a developed infrastructure, and Ripple Labs participated in the development of its protocol.

Perhaps the difference between Tron and Ethereum isthat the platform focuses on the gaming industry. A large part of the Tron ecosystem is made up of decentralized games and casinos, which makes the blockchain more focused. This allows you to create apps that are free of commissions from stores like the App Store and Google Play.

What makes Tron one of the best staking platforms?

The Tron ecosystem includes video hosting,social network, streaming platform, gaming portal, online casino, payment platform and online publication. The platform helps the development of the entertainment industry and provides advanced tools for creating and promoting blockchain games based on developer incentives.

Tron problems

Low profitability of TRX staking is one of thethe main problems of cryptocurrency. The profitability barely exceeds 1% per annum, so staking is more suitable only for Tron hodlers. The TRX emission is 100 billion - almost 500 times more than that of Bitcoin, which is why one should hardly expect the coin's rate to rise to at least $ 10.

The second problem is that userscommunities accuse the platform of centralization, as about 50% of the available coins are stored in just 10 addresses, which makes the exchange rate vulnerable and may alienate new investors.

In addition, around the Tron ecosystem,a lot of scandals. The creator of the project, Justin Sun, in 2107-2018 announced major partnerships with giants of the Chinese market, such as Alibaba and Baofeng. These partnerships could have attracted more than 200 million new users, but the claims turned out to be wrong and this only negatively affected the ecosystem. In reality, it turned out that it was about blockchain units, and not the companies themselves.

Polkadot

Polkadot is perhaps Polygon's main competitor(MATIC). Like Polygon, the Polkadot platform aims to scale the Ethereum network. The ecosystem of the platform consists of subchains, also known as parachains. The main task of Polkadot is to create a network of Ethereum-compatible blockchains that could interact with each other, exchange transactions and data.

Polkadot provides blockchain developers with a modular Parity Technologies' Substrate framework that allows them to select the components that are best suited for developing specific applications.

Strengths of Polkadot

Polkadot, like similar platforms, developssolution for the largest protocol in the DeFi Ethereum ecosystem, so the project can attract tons of users. Blockchains and applications developed on the Polkadot network use a common security model, which eliminates the need for developers to keep the network validators running.

Polkadot parachains serve as bridges connectingblockchain with external networks like Bitcoin and Ethereum. The platform is one of the ten largest cryptocurrencies in terms of capitalization and is integrated with the Chainlink blockchain, the largest provider of blockchain oracles in the crypto industry.

Weak sides

Polkadot has many competitors chasingsimilar goals. Among them are such large platforms as Cosmos, Cardano, Tezos, and Polygon. In addition, vulnerabilities were found in the protocol, which have already been exploited twice by hackers who have managed to withdraw several million dollars worth of cryptocurrency.

The number of parachains is limited, which makes the platform scalability limited.

Tezos

Tezos is an open blockchain protocol forassets and applications, as follows from the platform's official website. The platform is based on the Proof-of-Stake consensus mechanism, which allows validators and their delegates to generate income from XTZ staking.

One of the important features of the Tezos blockchain isthe ability to self-adjust and change the structure of the protocol with the active participation of the community. In terms of functionality, Tezos is not much different from competitors Ethereum, Tron or Cosmos: the protocol supports smart contracts and allows you to develop blockchain applications (DApps) on top of it.

Why is Tezos one of the best staking platforms?

Tezos platform development is supported by largecommunity of blockchain researchers and developers. On a token sale (ICO), the team managed to raise more than $ 230 million, which makes Tezos one of the largest crowdfunding projects in the blockchain industry. However, it should be borne in mind that the public sale was carried out during the ICO boom, so one should not exclude the high speculative interest of investors.

Tezos addresses the issue of smart contract security and has a modular architecture that provides the flexibility to quickly change the protocol.

Disadvantages of Tezos

The first problem with the platform was the inflexible SDK:the native Michelson language is used to write smart contracts and applications, similar to how Ethereum uses Solidity. This limits the options for developers. In addition, to include developers in the whitelist, formal verification is required, as is done, for example, in the aerospace industry.

Independent developers have characterized Tezosas an "immature web" because its use is not yet so widespread, despite its large capitalization. It is also problematic to estimate how much transactions will cost and what problems with them may arise as the number of users grows.

Eos

EOS has become the largest ICO evercryptocurrency, which raised $ 4 billion at the stage of public sales, without even having a fully working product. It was believed that EOS would bypass and even destroy Ethereum, but in reality it failed. Despite this, the platform remains one of the most advanced in its field.

To solve the problem of slow and expensivetransactions, EOS proposed a fundamentally new economic model based on the use of CPU / NET resources. Users can rent computing power for a certain time, during which they can make an unlimited number of transactions instead of paying for each transaction separately. This, among other things, significantly speeds up the confirmation of transactions.

EOS advantages

The EOS protocol is designed in such a way thateliminate the risks of creating hard forks due to problems with the blockchain, as was the case with the DAI hack, as a result of which Ethereum was transferred to the new network. In the event that vulnerabilities are found in any application (DApps) or it is hacked, validators will simply freeze it and prevent transactions from entering the blockchain until the bug can be corrected and normal operation restored.

An interesting fact: EOS is the most popular cryptocurrency in China, having managed to bypass ETH and the "Chinese Ethereum" NEO.

Another advantage lies in EOS accounts:users can create bills by paying a one-time payment with cryptocurrency that use the Domain Name System (Domain Name System or DNS). This means that instead of complex addresses for sending tokens, account holders can use simple unique names (nicknames).

EOS problems

Through powerful positioning and marketingthe creators of EOS managed to become the leader in the cryptoindustry in terms of the amount of funds collected. But the network problems arose from the very beginning of the mainnet launch. Given the high competition of Ethereum-like blockchains, even the slightest mistake can be disastrous for the project.

Despite the fact that the economic model of EOSallows users to significantly reduce transaction costs, this negatively affects delegates and validators, since their profitability does not exceed only 2%.

Also, the community considers EOS to be morecentralized compared to other DPoS blockchains. This is because the network consists of only 21 validators, which can easily conspire with each other and affect the operation of the network.

Terra

Terra (LUNA) is an open blockchain protocol,who brings innovative concepts to the blockchain industry. In addition to smart contracts, the Terra platform provides blockchain oracles and algorithms for issuing stablecoins backed by native LUNA tokens. This makes the protocol multifunctional and flexible to use.

The Terra network is interoperable with other blockchains as it interacts with Cosmos Inter Blockchain Communication (IBC). Thanks to this, LUNA tokens are also available on the Ethereum and Solana blockchains.

Terra benefits

Terra has introduced its own DeFi product forYield Farming Anchor Protocol, which provides flexible tools for profitable farming. Users can receive passive income from bLUNA tokens, and send rewards in ANC tokens for staking.

Terra infrastructure is built to simplifydevelopment of DApps and the release of our own stablecoins. Terra supports popular programming languages ​​for building blockchain applications and smart contracts based on the Rust, Go and AssemblyScript framework.

disadvantages

One of the main disadvantages of Terra is that the networkpartially centralized, which, unfortunately, is often found among modern blockchain projects, including those described in this article, for example, EOS and Tron. The emission of tokens and stablecoins is managed by a small group of validators, on which all members of the ecosystem depend.

Another disadvantage of the Terra platform is serious competition from stablecoin mastodons such as Tether (USDT), Binance USD (BUSD), USD Coin (USDC) and DAI.

Elrond

Elrond is a high performance andscalable blockchain platform based on network segmentation. Elrond is yet another platform that dares to challenge the Ethereum giant. While Ethereum developers are developing a sharding-based PoS network, the Elrond team has already done so.

The Elrond network consists of shards - independent and interconnected blockchain segments that process transactions in parallel, increasing the throughput of the main blockchain.

Elrond developers have created a new consensusa mechanism called Safe Proof-of-Stake (SPoS or Secure PoS). In addition to the advantages of the classic PoS or DPoS, the new SPoS algorithm improves the interconnection between blockchain segments (shards), reducing its weight and size.

What makes Elrond one of the best staking blockchains?

The Elrond team has provided developers with flexible andadvanced tools (SDK) for easy creation of useful applications. This allows developers to quickly enter the blockchain industry without having sufficient skills and knowledge about it. Powerful DeFi protocols such as the Orino Protocol are being developed on the basis of the Elrond platform.

Elrond throughput according to claimsdevelopers can reach up to 100,000 transactions per second. However, it is not yet possible to verify this statement for truth due to the insufficient number of network users.

Elrond problems

Elrond's first problem is overbought.tokens: over the past year, their price has grown more than 100 times. The history of cryptocurrencies shows that such an active growth leads to a strong drop in the rate. Now we can observe the active withdrawal of the eGLD cryptocurrency (unlocking) from the platform, caused by the rapid fall in the rate.

Such a rapid growth of the coin is caused by a large-scalemarketing company, as a result of which speculative growth bypassed natural: the developers announced that the testnet showed a result of 263,000 transactions per second, which is an unprecedented figure for the crypto industry. It should always be remembered that the rapid growth of the rate does not reflect the real value of the platform in any way.

Volatility is a key cryptocurrency risk:the higher the volatility, the more the price can change in a short period of time, and, accordingly, the more it is susceptible to correction in the crypto market.

Where is it more profitable to buy cryptocurrency? TOP-5 exchanges

For a safe and convenient purchase of cryptocurrencies with a minimum commission, we have prepared a rating of the most reliable and popular cryptocurrency exchanges that support deposits and withdrawals of funds inrubles, hryvnias, dollars and euros.

The reliability of the site is primarily determinedtrading volume and number of users. By all key metrics, the largest cryptocurrency exchange in the world is Binance. Binance is also the most popular crypto exchange in Russia and the CIS, since it has the largest cash turnover and supports transfers in rubles from bank cardsVisa / MasterCardand payment systemsQIWI, Advcash, Payeer.

Especially for beginners, we have prepared a detailed guide: How to buy bitcoin on a crypto exchange for rubles?

Rating of cryptocurrency exchanges:

#	Exchange:	Website:	Rating:
1	Binance (Editor's Choice)	https://binance.com	9.7
2	Bybit	https://bybit.com	7.5
3	OKEx	https://okex.com	7.1
4	Exmo	https://exmo.me	6.9
5	Huobi	https://huobi.com	6.5

The criteria by which the rating is set in our rating of crypto-exchanges:

• Work reliability— stability of access to all functions of the platform, including uninterrupted trading, deposits and withdrawals of funds, as well as the duration of the market and daily trading volume.
• Commissions– the amount of commission for trading operations within the platform and withdrawal of assets.
• Feedback and support– we analyze user reviews and the quality of technical support.
• Convenience of the interface– we evaluate the functionality and intuitiveness of the interface, possible errors and failures when working with the exchange.
• Platform Features– availability of additional features — futures, options, staking, etc.
• final grade– the average number of points for all indicators determines the place in the ranking.

This article does not necessarily reflect the opinion orthe views of the editorial staff. It should not be taken as investment, exchange or trading advice. Do your own analysis before making a decision.

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