Algorand Staking Overview
Algorand is one of the most open blockchains and is gradually gathering attention over time. Algorand holders can stake ALGO to earn up to 3% APY, with the annual percentage yield depending on the type of wallet, exchange, and validators chosen.
Note that the amount mentioned doesn’t take inflation into account.
Algorand also uses a two-tiered structure block structure where Layer 1 smart contracts act as a secure path for transactions and Layer 2 for the long tail of smart contracts that rely more on customization.
How to Stake Algorand (ALGO)?
Staking Algorand can be done via a centralized crypto exchange such as Coinbase, Binance, KuCoin, etc., or via non-custodial wallets such as Algo Wallet, and others such as Exodus, Ledger Nano, etc.
The choice between them depends on your needs. If you wish to stake several coins or regularly trade between them, then the first option would be better.
In contrast, if you want to stake only Algorand, then the second option is better. In fact, the Algorand platform itself suggests using its official “Algo Wallet” (a non-custodial wallet) because crypto exchanges charge some part of the staking reward, and their functioning is not in your control.
Follow the steps below to stake ALGO on both types of wallets.
Staking Algorand on a custodial wallet
Step 1 : Open an account in an exchange
Step 2 : Purchase a sufficient amount of ALGO coins
Step 3 : Select the STAKE option
Step 4 : Enter the amount of ALGO and desired program
Step 1: Open an account in an exchange
After choosing a preferred exchange, create an account by entering your personal and banking information.
Step 2: Purchase a sufficient amount of ALGO coins
Different platforms have different standard minimum values of ALGO coins required for staking. For example, Binance has a minimum value of 100 ALGO in its “Spot” wallet. You have to buy ALGO coins equal to or greater than this minimum value for staking.
Step 3: Select the STAKE option
After purchasing ALGO, go to the platform and select the STAKE option to stake ALGO.
Step 4: Enter the amount of ALGO and desired program
Finally, enter the number of ALGO you want to stake or choose from the provided options. The program you have chosen because your ALGO will be locked, corresponding to the locking period. Then, click CONFIRM.
Staking Algorand on a non-custodial wallet
Step 1 : Download desired non-custodial wallet (software application)
Step 2 : Create an account on the wallet
Step 3 : Purchase or receive a minimum of 1 ALGO
Step 1: Download desired non-custodial wallet (software application)
We have listed some popular options for non-custodial wallets. You can choose one of them for staking ALGO and download it on supported devices (desktop or mobile).
Step 2: Create an account on the wallet
Enter your personal information and other details required on the software for creating an account. Keep in mind the password and word phrases; they are critical security information.
Step 3: Purchase or receive a minimum of 1 ALGO
In non-custodial wallets, just 1 ALGO is required to start staking. Purchase the desired amount from the application.
In case you have purchased ALGO on a crypto-exchange, then you can send those ALGO to your non-custodial wallet. To do so, copy the address of your recipient wallet into the corresponding address tab of the exchange platform and enter the amount to be transferred. Finally, click CONFIRM and after a small amount incurred for verification, your ALGO will be received in the non-custodial wallet.
Then, stake the desired amount of Algorand coins as mentioned above.
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Best Places to Stake Algorand (ALGO)
Option 1 : Binance
Option 2 : CoinBase
Option 3 : KuCoin
Binance is the first name that comes to mind when talking about staking ALGO. It has a large number of coins to choose from and offers a plethora of features.
- Binance offers multiple methods of staking Algorand including simple earn and flexible defi staking.
- The auto-invest feature automates your staking and helps you earn more rewards for Algorand staking.
- You don’t keep 100% of your rewards from Algorand staking.
CoinBase is another renowned platform in the world of crypto exchanges. It is known for its well-designed interface. Also, it has a small setup time, which can be attractive to many investors.
- The minimum requirement to stake Algorand on Coinbase is only 0.01 ALGO
- Algorand staking on Coinbase rewards of up to 5.75 percent APY
- It takes a higher percentage of commission fees than its counterparts for staking Algorand.
KuCoin is one of the most renowned crypto-exchange platforms by trade volume, is used by 10 million users, and is supported in over 200 countries. It supports 600+ cryptocurrencies and offers good returns.
- There’s a dedicated feature called the ALGO Soft Staking Program which makes staking Algorand easier for stakers.
- Users can withdraw their yield from staking Algorand at any time.
- The soft staking program is also a little difficult for beginners
Benefits of Staking Algorand (ALGO)
- Way to earn passive income
Staking an ALGO is an easy step to earn passive income, it doesn’t involve much action and, in the long term, can prove to be a profitable option.
- Low minimum balance
You only need 1 ALGO to be eligible for significantly large rewards via a non-custodial wallet, which gives others the opportunity to stake Algorand.
- High-speed transactions and security
Algorand is well-known for its speedy transactions. Additionally, its two-tiered structure and low minimum balance make it nearly impossible for a few validators to develop a monopoly over the process.
Most frequently asked questions on Algorand Staking
Is Algorand staking profitable?
Yes, Algorand staking is profitable. The amount might seem small, but sticking with it for the long term could be profitable.
What is the best place to stake Algorand?
The best place to stake Algorand is through a non-custodial wallet if you wish to use Algorand only; otherwise, crypto exchanges such as Binance, CoinBase, and KuCoin are popular options.
How much Algorand do I need to stake?
You need a minimum of 1 Algorand to stake it. You can also choose a higher amount in accordance with the corresponding staking plans.
Can I stake Algorand on my own?
Yes, you can do all the steps in the staking process of Algorand on your own, via any custodial or non-custodial wallet. The entire process is easy to understand and can be performed by anyone.