Proof of Stake (PoS)
Proof of Stake is a decentralized and trustless consensus mechanism which allows investors to safely earn passive income using cryptocurrencies.
PoS does not depend on any centralized exchange since the blockchain itself is the ledger and participants earn income proportional to the amount they have staked.
As long as the stakeholders do not attempt to defraud the system (in which case the stake is debited proportionally to the fraud amount), the staked amount is 100% safe and will provide consistent returns as blocks are minted.
Worst that can happen in a PoS system is, assuming no serious software vulnerabilities exist, to earn zero or too low returns. (We'll take a look at why this may be the case later in this article.)
So, let's dive into the most profitable staking coins for the year!
Top Proof of Stake Coins
Several top rated cryptocurrencies provide passive income via PoS. Here we take a look at the top Proof of Stake coins and provide tips so you can achieve the best results.
Remember: we're not judging these coins' applications or technology - but only their performance as passive income cryptocurrency investments.
If your favorite coin doesn't score a favorable review here, remember the focus of this article is simply the coins' profitability as a buy and forget type of investment.
We've tried to make this guide as comprehensive as possible so you can make the best choice for your next season of crypto purchases.
Cosmos
The internet of blockchains as they call themselves, is a new type of blockchain platform where new startups can easily create their own blockchain services with ease.
They have a clear focus on bridging blockchains and making it easier for them to speak with each other and co-exist.
In a world with lots of separate blockchains, the need for them to collaborate and co-exist is a given for blockchain adoption to truly work. This is where Cosmos comes in.
ROI: The expected annual ROI for ATOM is 8% (note: this can fluctuate heavily)
Lisk
A blockchain-based LISK framework helps anyone to build decentralized apps (DApps) on their network. It provides developers, investors, and project designers the ability to build side chains. Sidechains are the apps where the base of the app is built on the Lisk blockchain. Lisk is has a very user-friendly interface that is based on JavaScript. Lisk is accessible from Bit-Z, OKEx, Kucoin, for staking purposes.
LSK or Lisk coin is the currency name of the Lisk, which is primarily used in the decentralized applications on the Lisk main chain itself. Talking about bitcoin and others, it is not a currency like that where it could be used by merchants as a payment gateway, but it is used as a currency for developers who use the network or wish to use.
You can stake your Lisk coin on different exchange and wallets like Coinbase and Atomic Wallet with a percentage of the annual reward of 1.61% by using vote for delegates or by running a delegate node with an Annual Reward of 5.24%.
Stellar XLM
Stellar is a shared network that enables people to transfer assets worldwide efficiently, quickly, and comfortably. It is designed to link banks, payments networks, and citizens and helps you “speedily, efficiently and for fractions of a centaur,” to transfer money across borders. Briefly, it wishes for faster, easier, and smoother cross-border transfers than it does with the current bank and transfer systems.
Stellar is both a distributed payment network that focuses on simple and affordable transfers across borders and also a forum to host ICOs. The Stellar network was founded in 2014 and has a digital currency of its own, named the Lumen (XLM), which is very important for allowing foreign transfers and for quick transactions between different currencies.
You can store Lumen XLM in a range of wallets and exchanges including the Ledger live wallet, on Coinbase exchange, and Binance exchange. You can vote for a staking pool on the above-mentioned exchanges and wallets by getting an annual reward of 1%. This means that by investing 1,000 XLM units you can get yearly earnings of 10 XLM.
Ontology
Ontology is a blockchain network built to support other blockchains, both public and private so that businesses can take advantage of their technological advancements. It provides companies the ability to either save data privately or publicly through the ONT blockchain targeting businesses. Da HongFei and Erik Zhang co-founded the company, and are the founders of the NEO blockchain.
There are two tokens on the Ontology platform: ONT and NGO tokens. These two tokens have different functionality. You can buy ONT on common cryptocurrency exchanges including Binance, Huobi, OKEx, Bibox, etc. The ONT token cannot, however, be purchased with fiat, and before exchanging it with ONT, fiat must be converted to a known crypto coin.
There are different cryptocurrency exchanges and wallets where you can stake your ONT coins and can earn a part by holding your coin on exchanges. Currently, Guarda wallet and Ledger Live wallet are supporting the ONT/ONG with an annual reward of 7.3% annual reward.
Algorand
Algorand a blockchain network built with its open, legitimate public blockchain to build a borderless economy. In other terms, Algorand needs an ecosystem that enables everybody to be active and productive. This model is based around the fundamental concepts of usability, instant transfers, simple usage and deployment, and performance.
Algorand’s protocol is designed to accelerate. Theoretically, by asserting blocks in only one round of voting the developers have achieved optimum performance. This enables the block to instantly finalized and significantly improves the network’s transactions per second. With a dramatic increase in speed, the mainnet can handle 1000 transactions per second with a delay of a maximum of 5 sec per transaction.
Though ALGO is categorized on Binance, The coin is part of many other markets, such as Huobi Global, OKEx, Coinbase Plus, and BitMEX. The investors can earn passive income via staking their crypto on Binance. You can stake you Algorand o Binance and can get up to 5.79% annual reward. It means that if you invest a minimum of 1 ALOG, you can earn 0.0579 ALOG by the end of the Year.
EOS
It is relatively considered as the most profitable proof of stake coin. Talking about the EOS.IO network protocol, EOS is the native cryptocurrency of this protocol. It was launched in 2017 and earned a whopping $4 billion in June 2018. The firm is a fairly young business. EOSIO promises to overcome the significant problems of Bitcoin and Ethereum. Those involve the development of an open and accessible framework for quicker, easier, and simplified decentralized applications.
Roughly, EOS has a market capitalization of nearly $2.5 billion, placing the coin on CoinMarketCap in the top 10. Two key methods can be used by a crypto trader or an investor to claim EOS tokens. One is by the mining of coins and the most common is the effective trading of crypto on different exchanges and wallets.
The coin is listed on the famous exchanges and Wallets that can be named as Binance, Guarda Wallet, Atomic Wallet, Coinbase and MyCointainer. You can earn a profit by staking your EOS through running a Block Producer with an annual reward of 1.74% or by running a standby Block Producer with an Annual Reward of 1.76%
Tron
Tron currently yields 3.56% annually. Average PoS returns but excellent liquidity. Easy to buy, sell and trade on most large exchanges.
Binance BNB
BNB is the native coin of popular exchange Binance. There are multiple ways by which you can stake BNB coin and earn up to 30% or more by staking alone.
The most popular way is by using BNB Vault which is available inside Binance exchange. Current APY annually is around 5%.
ICON (ICX)
ICX has an annual return rate of approximately 10% at the time of this post (although this can fluctuate heavily, over the last year, we've seen an average of about 16% ROI annually). ICON takes 20 days to unstake and you must vote for public representatives to garner rewards (you can also stake and earn a higher percentage 21.79% on Binance).
Nuls
Nuls currently has a 10.98% yearly return rate. Not a very popular coin, low network difficulty reflects that.
Shift
At 24.85% annual yield, Shift is a good performer in the PoS arena.
Particl
Particl currently yields 5% annually.
Qtum
At 5.23% yearly returns, Qtum is not exactly one of the top performers in this comparison. Very popular, will be easily traded, but not exactly a star in the passive income arena.
Tezos
Tezos is an amazing project being developed using the OCaml programming language.
OCaml is a functional programming language that has found use in the aerospace and high end engineering industries, especially in France where the language was created.
OCaml is very tightly linked to formal software verification methods. The Coq proof assistant, for example, generates OCaml source code out of formally verified logical constructs.
Tezos offers yearly returns in the 5.x% region. It is secure, well developed and has an amazing community around it.
VeChain
At 2.45% yearly returns, VeChain might be great for many applications but not as a PoS passive income investment. High liquidity and many interesting projects stemming from the VET ecosystem, but not great as a passive income asset.
Waves
Waves currently presents 2.9% annual returns. Not one of the best performers but has high liquidity, large community and is easy to trade.
KekCoin
Those who invest in KekCoin won't get rekt as far as PoS returns go. 18% annually yield makes it a great performer.
Official cryptocurrency of the "blockchain of Memes" (Memechain).
Deep Onion
At 10% annual yield, Deep Onion is a Tor user's best friend. As the name suggests, anonymity is its greatest strength.
Cardano ADA
Cardano is a 3rd generation cryptocurrency that became fully decentralized PoS in Q3 2020.
(We've dedicated a lot of coverage to this amazing project. Please use our search for our technical articles.)
Right now, Cardano yields approximately 2.80% a year.
ARK
Network difficulty has high impact on ARK yields. Should a large number of users stake ARK at the same time, yields would be reduced accordingly.
With ARK you should expect between 8 and 10% annual return.
Decred DCR
Decred was initially based on Bitcoin but quickly established itself as an independent project by adopting a hybrid PoS and PoW consensus mechanism.
Decred yield is highly dependent on network difficulty (as with most PoS systems).
At the time of this writing, Decred yields between 8 and 9% a year. Last year Decred yields varied from 13 to 14% but due to the large influx of new users, the yield has gone down proportionately.
It is an excellent return for a top 30 market cap cryptocurrency with a great community, very active development process and a large user base.
Currencies with a large number of nodes usually yield less than smaller coins due to the high competition. On the other hand, lesser known coins have low liquidity and are hard to trade in high volumes.
Decred is able to offer high yield while offering high volume and liquidity. It's trivial to buy and sell DCR on all the major exchanges.
Neblio
Neblio's current monthly yield is 0,8%
Yearly = 10%
Ranked 169 on CMC, not exactly a top performer in the passive income competition.
OmiseGO OMG
OmiseGO currently yields around 3% a year. Not in the upper tier as far as staking yield goes, but a very popular project with no shortage of liquidity on the largest exchanges.
DASH
DASH currently yields approximately 0.5% per month and approximately 7% a year.
Excellent yield for a top 15 cryptocurrency. Although it has lower yield than others in this article, DASH has a significant user base and high liquidity.
NEO
NEO does not yield NEO coins directly, instead the staking rewards are paid in GAS.
Currently NEO yields 0,3% per month and 3,35% a year.
NEO is a top 20 crypto and has excellent liquidity and a significant user base, especially in China and generally in Asia.
PIVX
PIVX currently yields 0.51% monthly and 6.55% annually.
It's a top 100 cryptocurrency with an enthusiastic following. Liquidity might not be the highest around, but trading PIVX shouldn't be too difficult either.
LISK
LISK currently yields 0.66% monthly and 7.89% annually.
It's a top 50 crypto with a large user base. Good liquidity.
OkCash OK
With OkCash you can expect around 4.97% monthly and 60% yearly.
Ranking at 766 on CoinMarketCap, OK is low liquidity and low network difficulty coin.
NAV Coin
NAV currently yields 0.33% monthly and 4% annually.
Ranking at 235, this cryptocurrency offers low PoS yield with low competition. Not your best passive income solution.
STRATIS STRAT
One of the lowest yields among the currencies we've researched.
Currently at 0.12% monthly and 1.45% yearly returns.
A top 60 crypto, has good liquidity and a large user base. But the low yield may not make it the best bet for passive income.
Ethereum 2.0 PoS
Early data from Ethereum 2.0 suggests a 5% annual return. We don't know much else at this point - but the much anticipated Ethereum 2.0 launch later in 2020 will clear all our doubts.
No doubt it will be a high competition, high difficulty network for staking.
What to look out for?
High competition coins yield less but offer great liquidity.
For instance, we mentioned that you should expect low returns from the upcoming Ethereum PoS system. This is because Ethereum has high liquidity and can be easily traded back and forth for U$ and Euros. That way, you can expect high network difficulty while staking Ethereum PoS.
Other coins we've looked at offer extremely high yields, but you should be careful about possible scams and low liquidity. Even if a coin yields hundreds of percent per year, you may not be able to cash it when needed.
As you can see, there's a trade-off between network difficulty and liquidity. High yields mean low difficulty, but may also signal there's low liquidity for that particular cryptocurrency.
Conclusion
We hope this article has given you an ample panorama of the PoS status quo. Using this information you can pursue the best cryptocurrency investments to build that much dreamed constant flow of income at the end of the month.
PoS is much safer than centralized investment clubs and is usually fully automated, running from your own equipment. Most delegation systems do not put your funds at risk when you stake your coins, but simply indicate the coins are blocked for staking. This makes it a secure way to participate in decentralized profits without risking your money, unlike other high yield schemes which have caused immense losses for investors in the past.
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