As the crypto industry grows and develops, stakeholders are finding ways to create more value with digital assets. Fields such as the video game industry have incorporated blockchain technology and NFTs not only to make games more engaging but more lucrative.
If you’re an avid gamer, you probably know that trading game assets is big business. But you might not know that you don’t need to sell your gaming assets to make money. And that’s where play to earn comes in. You can turn your game assets into NFTs and stake them with your blockchain of choice, where they will gain value.
If you still don’t know what we’re talking about, don’t worry. This article will look at staking and how it works. So if you’re ready to get lost in the matrix, take the red pill, and keep reading to learn more.
What Is Staking in Crypto?
Staking crypto is the practice of holding a defined amount of crypto on a blockchain for a specified amount of time, expecting it to gain in value. If this were money saved in a bank account, this would be the interest you earn after a few months or years.
However, unlike a bank that would lend out your money to earn interest to pay your interest; blockchains work by holding your crypto out of circulation to reduce the number of coins in its network. This contracts the supply, increasing the demand and value of the few coins left in operation on the blockchain network.
In addition, the crypto can monitor a blockchain’s POS if its network runs on such protocols. We won’t get to exactly what that is in this piece, but you can use the link to learn more. And when all is said and done, your crypto re-enters circulation at the new higher price point.
Now, how play-to-earn staking works is similar to how crypto works, with only minor differences. Once you earn your game assets, turn them into NFTs with your preferred blockchain. Traditionally you would sell them. However, you can stack them with a blockchain for a period and expect to gain value or receive rewards in tokens.
Welch, one of the Chief Product officers at Kraken, said, “staking is as easy as going to a staking website and specifying the amount you want to stake and hitting okay. So if you feel like it’s complicated, don’t worry. The staking process is quite easy.
What are Play-to-Earn Games?
Play-to-earn games are blockchain-based video games that allow you to farm the game’s currency as you play or turn game items into NFTs. You can sell these digital assets on the market or hold them for speculative or personal reasons. Furthermore, some play-to-earn games have created robust economies and lucrative opportunities to sustain players.
One of the best in-game tokens responsible for this success is Axie Infinity’s AXS, which is relatively stable. During the crypto crash, it only lost 50% of its record high, which is better than most. Bitcoin, for instance, lost 70% of its value. However, there are more tokens that you can find on play-to-earn games you can look up.
Where Can You Stake Crypto and NFTs?
The first thing to note is that Bitcoin does not support staking. However, you can stake your crypto and NFTs on Ethereum and some Ethereum-based blockchains and crypto exchanges. To help you with that, here are a few we recommend:
Kraken is an Ethereum-based cryptocurrency exchange and bank that supports 16 tokens for staking and rewards. Unlike other exchanges, it does not require you to stake your tokens for a minimum period. However, the platform does not offer insurance for staked tokens on the platform.
Gemini is a crypto exchange that does not support Ethereum. However, it supports 47 other altcoins and tokens. It is available all over the US but is notorious for inadequate customer support.
KuCoin is a crypto exchange that supports Ethereum and over 50 coins and tokens for staking. You can also earn on the platform from promotions, savings, and interest rates that go as high as 4.7% on some coins. However, the platform is not yet available in the US.
Coins You Can Stake
Most coins for staking are based on the Ethereum blockchain. However, not all cryptocurrencies or NFTs can be staked. Below we highlight the most popular.
As previously mentioned, Ethereum is the mother blockchain of all stackable crypto. It used to work on a POW system but recently has shifted to POS to enable more staking. To become an authenticator and start your staking, you need a minimum of 23 ETH and a mining setup.
Cardona is a cryptocurrency that uses Ada as its primary token. Users who know how to administer a stake pool can start one and administer other users. Or users can run their individual stake pools to earn rewards.
Solana, or SOL, as some know it, is another crypto you can stake or use a delegating pool to earn rewards.
What Are Some Staking Rewards?
You can earn more tokens to increase your initial amount. This is also the most common reward offered by most staking platforms.
Users who lock their crypto with a blockchain get more consideration from the platform and are allowed to give their input on its future.
If you’re a long-term investor in crypto, staking is an easy, hands-off way of growing your portfolio.
The cryptocurrency industry is one that’s filled with opportunities to make as well as lose money. Staking is just one of the more complicated and less understood, for a good reason. But concepts such as play-to-earn and blockchain games are easier to grasp. Trading in-game assets has existed for years, and NFTs have only come to enhance the industry.
So if staking helps you gain more value on your crypto and NFTs, for now, we remain skeptical about its validity. But what do you think? Let us know in the comments section below.