One major aim of most investors when they venture into the crypto space is to make passive income. Of the many ways one can make money with cryptocurrency, staking is one of the safest ways.
By staking crypto, you’re simply holding it in your wallet. As such, you do not have to worry about any complex trading strategy or monitoring one chart or the other.
Of all the crypto you can stake with, Cardano remains one of the best. When you buy Cardano for staking, there’s a high possibility you will make a lot of profit because of its high volatility.
Apart from when you buy Cardano, its volatility gives you an upper hand, and there are more reasons why you should buy Cardano for staking, which we will talk about later in the article. But first, let’s understand why it’s possible to stake Cardano.
How Is Staking Cardano Possible?
One of the reasons it’s possible to buy Cardano and stake it is Blockchain-based crypto. This means that Cardano supports the proof-of-stake (PoS) consensus mechanism. PoS is essential to staking any cryptocurrency because it ensures users are not dishonest or fraudulent about their cryptocurrencies.
Remember, staking crypto generally is allowed worldwide, with no central agency monitoring or regulating anyone’s activities. It is crucial to have a system that performs the important tasks of adding new data to the block, like transaction data. Unlike Bitcoin, which uses proof-of-work (PoW), which uses miners to confirm transactions, Cardano uses embedded codes in the Blockchain.
Why Choose Cardano for Staking?
Now that you all understand the basics of staking with Cardano, let’s talk about the main agenda. Why should you choose Cardano of all the different cryptocurrencies you can stake with? Well, here are three reasons you should buy Cardano when you want to go the staking road.
Staking Cardano Is Easy Through Delegation
Delegating your crypto to stake entities is an advantage you get when you decide to buy Cardano—staking entities, also known as stake pool operators, are specialists with the hardware needed to stake on the network. However, remember that you can be your stake operator. But when you delegate your crypto to specialists, it frees you from the hassle of monitoring the market.
While staking Cardano is quite easy, you still need to do a little bit of research to get the most out of it. First, you need to research the market to know the best time to stake Cardano. Also, you need to research the market to predict the most favourable period to hold your Cardano. If you don’t have the time or the technical advantage to research the market, a safe option for you is delegating your Cardano to stake operators.
The Yield of Staking Cardano Is Relatively Higher Than Traditional Fiat Currency
As we all know, cryptocurrency is one of the most lucrative markets today. And when you buy Cardano and stake it, it is more profitable than saving fiat currency. The reason for this could be because of the volatile nature of Cardano. As such, it has a huge potential of more yield depending on how well you can take advantage of it.
On average, investing in Cardano by staking it could earn you around 4.5% and above per annum. If, for example, you invested $1000 in Cardano staking, at the end of the year, your investment will grow to $1045. If you were to save fiat currency for a year, you most likely would not earn more than 1% of your investment, depending on your location and financial institution.
No Downsides to Staking Cardano if You Hold It for the Long-Term
Unlike other investment strategies, Cardano staking is a risk-free investment option. This means that you do not risk losing your money, especially when you are in it for the long term. Unlike trading cryptocurrencies, staking crypto is generally less risky.
The only real risk of Cardano staking is the risk of losing your wallet’s private key. And this can easily be averted when you take proper caution to secure your wallet. By also using a reputable wallet, you wouldn’t have to worry about the issue of losing your wallet. So apart from this, when you buy Cardano to stake, the odds are in your favour to make a profit out of it.
Note, when you want to go into staking cryptocurrencies, dividing your stakes into different pools helps diversify your portfolio and reduce the amount you pay on staking fees.