How to Earn Crypto Staking Rewards in Canada

Is it possible to earn passive income with cryptocurrency? With the industry continuing to mature and reach new heights, the answer is a resounding yes!

While many may think of crypto investing as buying, selling, and trading digital currencies on an exchange and taking advantage of price movements, the sector produces many financial products to allow simple and effective income generation.

One of these is crypto staking. It has become an effective strategy for earning extra cash (or additional crypto).

So, what is it, and how does it work? Let’s explore this exciting innovation in the world of crypto.

How to Earn Crypto Staking Rewards in Canada

Staking involves locking in your crypto assets for an established period to support a blockchain network, confirm transactions, and enable better security, known as a Proof-of-Stake (PoS) consensus mechanism. In exchange for offering your tokens, you will earn rewards.

Your earnings will depend on how much you stake and the interest rate offered by the cryptocurrency. For the most part, PoS coins will deliver a higher rewards rate when there are fewer coins – and vice versa.

Now, where do you begin?

The first step is to purchase the PoS cryptocurrencies. For now, the number of digital currencies that run on PoS and offer staking features is limited. Here is a brief list of staking coins:

·   Avalance (AVAX)

·   Cardano (ADA)

·   Cosmos (ATOM)

·   Ethereum (ETH)

·   Polkadot (DOT)

·   Polygon (MATIC)

·   Solana (SOL)

The next step is deciding where to stake. The easier option is to choose a cryptocurrency exchange and digital platform that lets you earn staking rewards. Bitbuy, for example, is a Canadian-owned and operated platform that facilitates the entire staking process, paying out your earnings regularly every few hours, days or weeks depending on the token.

The other option is to create or join a staking pool. This is a bit trickier since you will need to know how to use a crypto wallet to connect your cryptocurrencies with the validator’s pool. You must also research validators and determine their track record and how they operate.

Another consideration is to become a validator, but you must possess the infrastructure, computing equipment, software, a copy of a blockchain’s entire transaction history, and funding (the Ethereum network requires at least 32 ETH).

If you have any level of consternation surrounding validators or the network, you can also search for Delegated-Proof-of-Stake (DPoS), which allows network members to vote on delegates to manage the network. The more coins that are staked, the greater the voting number there will be to choose delegates.

Everything else, from payment schedules to crypto access (lockup period), will depend on the exchange. The rewards might also fluctuate. Ethereum rewards are between 4 and 5 percent, while Polygon (MATIC)  rewards are up to 6.51 percent. Once again, how much you earn will rely on how much you stake.

With a fundamental knowledge of how crypto staking works, here are a few tips to ensure that this can be a successful and fruitful endeavour:

·   Search for a cryptocurrency with enormous growth potential.

·   Refrain from investing in too many networks, as you might spread yourself too thin and miss out on higher rewards.

·   Remember to reinvest the rewards you garner through staking.

·   Only invest money that you can afford to lose.

At the same time, it is also essential to consider your other passive income options rather than putting all your eggs in one basket. If generating a passive income is your goal, other programs within the crypto sector can achieve this goal, such as decentralized finance (DeFi) applications and lending programs. Of course, outside the realm of crypto, there are stocks that pay dividends, bonds that pay higher interest, and real estate investment trusts (REITs).

Do You Support the Project?

When you see a protocol or cryptocurrency offer double-digit percentage rewards, throwing some or all of your holdings into the project can be pretty enticing, especially in an inflationary economy. But many questions must be answered, mainly if you understand the project and support the creators’ broader objective.

So, Polkadot is a protocol that attempts to connect a global network of blockchains - connect the dots - and resolve other technical challenges within the crypto sector.

Or as another example, Polygon is dedicated to ensuring the Ethereum blockchain is user-friendly.

Staking is a terrific method to generate passive income in the cryptocurrency environment. You do not need to mine or trade. Like a savings account, you deposit your crypto assets and receive rewards. It is that simple!