Why Should You Consider Staking DOT in 2022?

By staking Polkadot, you can passively earn and increase the value of your assets. The present APY on Polkadot is around 9% - 13 %.

Why Should You Consider Staking DOT in 2022?

Following the recent stumble of the crypto market, users look to find better investments. Furthermore, an investment that promises security and promising returns is highly valued in a bear market. As crypto users look to diversify their investments and holdings, staking emerges as the most convenient option.

Staking is a popular option for cryptocurrency owners as it can provide a passive income. Furthermore, for individuals who intend to become full-fledged validators or join a staking pool, staking is the most lucrative option available.

There are a plethora of choices available to users for staking crypto. One that stands out for staking because of its utility and ecosystem is Polkadot. The Polkadot ecosystem uses DOT as the base currency.

Polkadot staking is one way to get passive revenue. Aside from the financial benefit, Polkadot staking helps avoid price fluctuation and preserve the integrity of the blockchains.

Understanding Crypto Staking

Staking is depositing your crypto assets in a cryptocurrency pool to ensure the proper functioning of a blockchain platform in exchange for a payout. Like in stocks, users are paid dividends; crypto assets allow users to deposit an asset and get rewarded.

Polkadot (DOT) aims to create a new decentralised network by securely connecting all sorts of blockchains. New platforms support Polkadot staking year after year. There are now numerous exchanges to choose from.

The Polkadots network is protected by the Nominated Proof-of-Stake (NPoS) protocol. DOT holders wishing to stake their funds can do so by acting as a validator, requiring a node to be active 24 hours a day, or appointing a validator.

Polkadot Staking Rewards

Before dwelling on the rewards that Polkadot staking offers, some interesting facts to consider are:

Staking Rewards

By staking Polkadot, you can passively earn and increase the value of your assets. The present APY on Polkadot is around 9% - 13 %. This fee excludes the commission of validators.

To illustrate how the APY benefits you, look at the example. If you stake 1,000 DOT, you'll earn about 90-113 DOT over the next year. Based on DOT's 52-week high of $55, you would raise $55,000 for an annual profit of $4950- $6215.

How to Stake Polkadot

Now that we've covered staking and its benefits, let's look at how you stake it. DOT can be staked in two ways: via crypto exchanges and liquid staking platforms.

Staking On Exchanges

The most straightforward way to begin Polkadot staking is to utilise a cryptocurrency exchange like Binance or Kraken. Staking on an exchange is as simple as purchasing DOT tokens. Firstly you need to decide which exchange to use and deposit your tokens into your Polkadot wallet. After you have tokens in your wallet, it is simple to start staking.

Features of Staking on Exchanges

  • For staking Polkadot, the least amount required is 1 DOT.
  • It is simple to compute the anticipated APY (annual percentage yield).
  • You can begin staking right away with no setup or hardware requirements.
  • It necessitates no technical knowledge.

Staking Polkadot in Wallets

A wallet or node is another option for staking Polkadot. Physical hardware wallets like Ledger, web wallets like Polkadot JS, and mobile apps like imToken are the other alternatives that users can leverage.

Features of Staking in Wallets

  • You can choose how your funds will be utilised and select the validator you wish (as a nominator).
  • Wallets allow you to have complete control over your assets. In this way, you are truly aware of the security of assets.

Staking Polkadot gives you the ability to explore new incentives and earn passive income without lifting a finger. It also allows you to secure your investment by strengthening the Polkadot infrastructure and making it less vulnerable to attack disruptions.

Benefits of Staking Polkadot

If you use a minimal amount of DOTs for a short time, the yield will hardly be noticeable. Staking a good amount of Polkadots will result in a significant return. These returns are often higher than what a regular savings account can offer. The benefits of staking DOTs are:

  • Staking Polkadot implies that your tokens are earning for you rather than just resting in your wallet.
  • Polkadot's ecosystem benefits from staking; it reduces volatility and facilitates basic blockchain features.
  • It is the most environmentally friendly alternative because you can receive the funds without requiring to mine.

Staking DOT is a great way to earn rewards and help secure the network. When you stake DOT, you commit to locking up your DOT tokens for a set time. In return, you receive rewards based on the number of blocks produced. You can choose to stake for as little as one day or as long as one year.

To Sum It Up

Polkadot is a breakthrough blockchain technology connecting multiple blockchains into a unified network. This bridging is done to merge integration and information flow in the blockchain. Polkadot was founded as part of a larger vision for a web that would take back control of the internet from monopolies. It extends the promise of previous blockchain networks while offering several significant benefits.

As people look to find a stable source of income without facing much market turbulence, Polkadot comes as the most versatile option. Its use case and utility are profound, and according to Motley, Polkadot can handle 1000 TPS significantly faster than Ethereum, which can only manage 30 TPS.

However, this is still slower than Solana and Avalanche networks, which can sustain up to 60,000 and 6,000 TPS. But according to founder Gavin Wood, as Polkadot expands, the network will be able to accommodate up to 1,000,000 TPS. It needs to be seen when PolkaDot matches this throughput, but when it does, the speeds will be faster than any existing crypto asset or traditional banking network.

These features make Polkadot a lucrative investment option for crypto enthusiasts. Staking Polkadot is a great way to benefit from the growth of the coin. As markets can swing from one direction to another, staking seems to be a more reasonable approach towards investment.

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