Key Takeaways
- Crypto staking is a way for investors to earn additional income on their crypto: like earning interest in a savings account or money market fund.
- Staking has seen substantial growth, with over $200 billion staked by investors as of this writing.
- Like choosing a bank or brokerage firm for traditional investments, selecting a reliable and trusted crypto staking platform is vital.
- Staking rewards (and risks) vary significantly across different platforms and crypto assets.
Coinbase Earn | Kucoin Staking | Gemini | Binance
We love staking, because it’s an easy way to make your crypto investments work for you. Like earning interest in a traditional savings account, staking your crypto with trustworthy services can earn you additional crypto while you sleep. Maybe that’s why staking has seen substantial growth, with over $200 billion committed by investors as of this writing.
If you are interested in staking, your first decision is to choose a reliable platform. To help you with that decision, we’ve researched our favorite crypto staking platforms, and rated them on fees, usability, security, and trust.
Coinbase Earn
With over 8 million monthly active users worldwide, Coinbase is one of the most popular cryptocurrency exchanges in the world. It is also the first US-based cryptocurrency exchange to receive the approval of federal and state regulators.
Apart from being a market where you can buy and trade 249 cryptocurrencies, Coinbase also offers users the ability to earn rewards on their tokens through staking.
The staking service is called Earn on Coinbase (not to be confused with Coinbase Learn). To use Earn for staking, you must have a fully verified Coinbase account and reside in a jurisdiction where staking is legal.
As of this writing, Coinbase Earn supports staking on nine cryptocurrencies: ETH, ADA, DOT, POL, SOL, AVAX, XTZ, ATOM, and USDC. The staking rewards range from 2.00% to 9% APY, and the staking fees range from 26.3% to 35%, depending on the token and your account status.
Evaluating Earn on Coinbase
- Ease of Use: A significant reason for Coinbase's enduring popularity is its simplicity and ease of use. The platform's interface is beginner-friendly, making it one of our top picks for staking.
- Trust: Coinbase’s greatest strength, particularly in highly regulated crypto markets like the US, is its strict compliance with regulations, including anti-money laundering (AML) and Know Your Customer (KYC). It is also one of the few crypto companies to be publicly listed on a major stock exchange (Nasdaq).
- Security: The platform is secured using advanced encryption technology. Only a few reported hacking attempts have occurred. You can also access additional security features on your account, like two-factor authentication (2FA).
Our Takeaway: For investors who prioritize US regulatory compliance, security, and trust above all else, Coinbase remains the premier choice in 2024. However, you will have to contend with fewer staking options and lower APY.
Kucoin Staking
Based in Seychelles, Kucoin is a relatively popular online cryptocurrency exchange and staking platform available in most nations across Asia, Latin America, and the European Union. However, due to a lack of licensing and other compliance issues, KuCoin staking is not available in the US, Canada, Singapore, mainland China, and Hong Kong.
If you are based outside the US and want access to over 44 staking tokens, KuCoin might be worth a look. The promised rewards range from 1% to 25% or more on exotic, high-risk tokens.
Kucoin supports all the primary staking tokens and lesser-known ones like SUI, HYDRA, APE, and TIA. To attract users from international markets, KuCoin offers its spot trading and staking services at lower fees than the competition.
Evaluating Kucoin Staking
- Ease of Use: If you are an experienced cryptocurrency trader, KuCoin is reasonably easy to use. However, the platform is not very beginner-friendly or intuitive due to a lack of guides, tips, and documentation.
- Trust: Seychelles, KuCoin’s main base of operations, is a tax haven with lax regulations that favor financial crimes like money laundering. The exchange is also not regulated by any reputed authority in North America, the EU, or Australia.
- Security: Kucoin uses industry-standard security features, including regular audits, cold wallets, and multi-signature wallets. Despite all these measures, the exchange has been the target of several major hacks over the years, including one in 2020, where $280 million was lost.
Our Takeaway: Kucoin is oriented more towards experienced crypto investors from international markets with relatively lax regulatory standards. Due its compliance and security issues, it is not a practical option for US investors.
Gemini Staking
Gemini is a well-known US-based cryptocurrency exchange launched by the Winklevoss twins in 2014. The platform is available in over 70 countries, including the United States. The staking service is simply called Gemini Staking.
Although Gemini supports around 70 major cryptocurrencies, you can only stake on the platform in SOL, ETH, and MATIC tokens. Staking is available in all US states except New York.
Due to the limited token availability, staking reward prospects are relatively low, ranging from 2.51% to 4.10% APY. The fees, on the other hand, are reasonable at 15%. Gemini also has an advanced staking option on ETH called Staking Pro for institutional clients.
Evaluating Gemini Staking
- Ease of Use: Although it does not have the same level of educational content as Coinbase, Gemini is relatively easy to use. The interface is linear and intuitive, both on the website and the app. However, numerous consumer complaints about needing more adequate support have been made since 2020.
- Trust: In 2022, Gemini was accused of failing to conduct due diligence on a third-party partner (Genesis Global), resulting in losses to its customers using the Earn program. In February 2024, Gemini was ordered to pay customers more than $1.1 billion.
- Security: Most user funds on the platform are stored in cold wallets. The platform uses all security measures, including 2FA authentication and advanced algorithms. Although the exchange has not suffered any major fund hacks, a significant data leak in 2022 resulted in the theft of the personal information of 5.7 million Gemini users.
Our Takeaway: The return of lost user funds represents a step in the right direction for Gemini. It also reaffirms the importance of strict regulatory compliance. If you are only interested in staking the three available tokens, Gemini remains an excellent choice due to the lower staking fees compared to the competition.
Binance Staking
Binance is the world’s largest cryptocurrency exchange in terms of international users and trade volumes. In 2017, the Shanghai-based company was forced to relocate to Japan and then Malta due to the Chinese ban on cryptocurrency trading.
Although Binance has regional offices in France, Malta, Bermuda, and Dubai, the company preferred to operate without an official global headquarters for many years. As of 2024, Binance is in the process of creating a global headquarters due to heightened regulatory pressure.
Staking on Binance.com, the global platform, is available in multiple forms, including DeFi staking (high risk), ETH 2.0, and locked staking. The platform supports staking in various forms on over 300 tokens.
While US customers are prohibited from using Binance.com, a companion website, Binance.US, offers staking services on a limited number of tokens—21 in total.
Staking rewards on the platform can reach 29.7% if you pick some lesser known, high-risk tokens. However, Binance charges between 25% and 35% on staking rewards and is barred from trading using US Dollars.
Evaluating Binance Staking
- Ease of Use: The Binance platform is generally user-friendly. However, beginners may find the interface somewhat overwhelming due to the diversity of trading options and other advanced services. It also does not have a built-in wallet or support for USD deposits.
- Trust: Regulators in the US and other countries have accused Binance and its founder of numerous financial irregularities. In 2023, the company agreed to pay $4.3 billion to settle money laundering charges. The SEC has also filed multiple lawsuits against both the international and US versions of the platform. Many of these cases are still ongoing.
- Security: As the world’s largest crypto exchange, Binance has been targeted by hackers numerous times. In 2022, over half a billion was stolen from a blockchain linked to the exchange by hackers. However, the platform protects your funds with cold wallets, encryption, and 2FA authentication.
Our Takeaway: Due to intense regulatory pressure, Binance remains a questionable choice for staking in 2024, particularly in the US market. For international users, it may be a good option with a huge selection of staking tokens.
Investor Takeaway
Overall, staking is a great way to earn “interest” on your crypto investments. Our investing approach involves holding quality crypto investments for the long term, so staking is a lower-risk strategy of maximizing your returns.
Trust, legality, security, platform fees, and staking options are critical factors when choosing a staking platform. Always conduct additional research on a platform before committing your funds.
In terms of striking a balance between token availability, ease of use, compliance, and reliability, it’s our opinion that Coinbase is the best staking platform for both newcomers and seasoned users.
While many platforms promise double-digit staking rewards, it is essential to note that these are usually on lesser-known, high-risk tokens. With more established PoS tokens like ETH, ADA, and SOL, you can expect more modest returns. (Click here for our best staking rates.)
FAQs
What is staking?
Staking is the process of locking up a certain amount of cryptocurrency on a blockchain to validate transactions and maintain network security. In exchange for their service, stakers are awarded rewards in the form of additional cryptocurrencies.
What cryptos can I stake?
Staking is only supported on blockchain networks that use a Proof of Stake (PoS) consensus mechanism. Ethereum, Solana, Cardano, and Polkadot are prominent examples of PoS blockchains. You can stake cryptos like ETH, ADA, SOL, and DOT, which are the native tokens on these PoS blockchains.
How does crypto staking work?
To stake, you must first own a staking token like ETH or SOL. Next, you have to find a platform or wallet that supports staking on the crypto you own. After joining the platform, you can add funds and lock them away for a specific period and start earning rewards.
What is the difference between staking and mining?
Both staking and mining are two different approaches with the same common goal – validating blockchain transactions on a blockchain. In mining, you commit computational power of your devices (mining rigs) in exchange for rewards in the form of newly created tokens. In staking, you only have to lock up the tokens you own to support the network. While mining is quite complex and resource intensive, staking is more energy efficient and beginner-friendly.
Are there fees for crypto staking?
Yes, most platforms that offer crypto staking will charge fees for a variety of services. This can include transaction fees, platform fees, and other service fees. Fees directly associated with staking can range from 10% to 35% (as a portion of your staking rewards).
Is staking crypto profitable?
Since you earn additional cryptocurrency as rewards, staking can be quite profitable in the right circumstances. The wider market conditions, token price, and the level of trading activity on a blockchain can all have a decisive impact on the profitability of staking.
Are crypto staking platforms safe?
Crypto staking platforms can be safe, provided they have robust security measures and strong compliance with your local regulations. For a safe and secure staking experience, try to pick reputable platforms that have a positive track record in online security and regulatory compliance.
Are staking rewards taxed?
Yes, staking rewards are taxed in most jurisdictions. In the US, staking rewards are considered taxable income by the IRS at the time of receipt. Further, if you sell or trade the reward tokens at a profit later, you will also be liable to pay capital gains tax.
Is staking banned in the USA?
At the federal level, the SEC has not banned staking in the USA. However, both the SEC and certain state-level regulators have targeted staking platforms with lawsuits and orders that block them from offering staking services to US residents. Most of these orders are being contested in ongoing lawsuits in the courts.
