As investors, we always look for opportunities to grow our portfolios. And regardless of the investment, we often keep part of the funds in cash. Maybe you just took profits, or you’re saving for the next market discount.
If you want to max out your gains, why not put more money to work? What if you could store crypto with the similar security of a bank? It’s called decentralized finance, and it yields ten times more interest than traditionally.
Best Staking Platforms (Australia Focused)
As a yield farming strategy, staking involves delegating tokens to help validate transactions (see PoS). You lend coins to secure the network and earn interest without doing anything. Which can range from 5 to 20% in annual rewards depending on the market.
Since direct staking involves technical skills, we use exchange staking instead (aka custodial). You lend tokens to a validator (the exchange), which then distributes rewards on its terms. Each platform offers different, variable rates.
If you want to store crypto and earn passive income, you may wonder:
- Which exchange has the highest interest?
- Which one has the most stable rates?
- Which one is the safest?
Here are the best five we found for Australia specifically.
Swyftx
While Aussies know about Swyftx, they may not know about the latest staking update. This November 2021, users can now stake 10 of the Top 50 tokens in CoinMarketCap. Because it just launched, earners get as much as 20% RPY.
20% more crypto, which will be worth more if you hold the right token.
If you never staked before, here’s what you should know:
- Interest Rewards are variable. So if it sounds too good to be true, it may not last long. Hence the * (next expected payout)
- Exchange rewards are always lower than what you get if you staked yourself (with technical knowledge). Sometimes -8%, sometimes -1%.
- You can find the real rates on each networks platform (e.g., Polkadot.jss.org)
Swyftx introduces the Reward Percentage Yield, a term only used on exchanges.
- Annual Percentage Rate (APR) is the simple interest earned in a year
- Annual Percentage Yield (APY) is APR compounded for a year
- Reward Percentage Yield (RPY) is the APY collected anytime after exchange fees and distributions. While APR/APY can refer to interest, ROI might be fiat interest, staking (crypto), or inflation rewards.
For example, a network’s APY might be 18%, but the exchange offers 15% RPY based on a 14% APR.
To stake on Swyftx, you first buy the coin (or send it here if you own it in another wallet). You then go to Staking and click on the coin to stake. Once you set the amount and confirm, it immediately starts staking.
Besides, staking on Swyftx has benefits few exchanges can offer:
- There are no lock-up periods (thus no holding risk)
- There are no fees
- The minimum staking amount is 1 AUD/NZD/USD
Swyftx distributes rewards every day after 10 AM AEST. Or else, you can contact their fast native support team. Learn more about it in our Swyftx Review.
Staking With Kraken
Along with KuCoin, many consider Kraken the best Binance alternative. Almost 100 coins to trade and up to 0.28% in fees. Users can now stake crypto as well:
- (Delegation) Staking: Earn 4–20% RPY on 12 coins (0.25% on Bitcoin)
- (DOT) Parachain Slot Auctions: Earn rewards by crowd-funding a project. If it doesn’t win the auction, you get your staking amount back within days. If it does, it stakes for up to two years (yielding rewards with the new token)
You’ll need a verified account for Parachains. But if you just want the classic staking, all you need is to open an account and set up the 2FA code. You then transfer the coins you want to stake (or buy them) and go to Kraken Earn:
- Sign in to Kraken or click on My Account on the top right corner
- A new menu appears on the top, where you click on Earn
- Find your coin in the table and click on Stake where the Actions column
You can select the token amount and preview the order. When you confirm, it will stake and show your rewards compounding in real-time. And if you don’t have the coin, you’ll appear in the Deposit/Buy window instead.
While Kraken doesn’t mention lock-up periods, rewards are only available 1–2 times per week. The RPY includes the 15% staking fee, so what you see is what you get.
CoinBase Yield
As a world-class exchange, CoinBase has kept adding features since 2012. Not surprisingly, staking became available this April 2021. If you already bought the coins, here’s how to do it:
- Sign in from Coinbase.com
- The feature only appears in a small dashboard panel on the right. CoinBase doesn’t use the word staking anywhere, but instead “Yield Earned.”
- After clicking the panel, you can choose the coin to stake and confirm the amount
Staking rewards start automatically, but the payout timing ranges from daily to monthly (based on the coin). Coinbase offers up to 5% APY on five cryptos and USDC (0.15%). But only level-2 US customers can use this stablecoin.
Rewards are only 5% because Coinbase only added low-yield coins: Tezos (4.63%), DAI, Algorand, ETH 2.0., and Cosmos. In Australia, only Tezos and Cosmos (5%). We don’t expect new coins until late 2022.
These APYs don’t include the 25% exchange commission (A 4% APY might be 3% RPY).
While staking can be useful in Coinbase, rewards are lower than on Kraken and Swyftx. Payouts may take up to seven days. Also, every time you unstake, you lose all uncollected rewards for that month.
So if you’re trying to sell, you risk losing a good exit price while you wait.
As a custodial staking platform, Coinbase will limit withdrawals to maintain its liquidity. When there are too many withdrawals, staking payouts will delay. Also don’t expect much help from customer support.
Not your keys, not your coins.
Binance Earn
For traders and yield farmers, Binance offers dozens of functions within one platform. P2P trading, swap farming, fan tokens, parachain auctions, futures, loans, VISA cards, NFT marketplace, liquidity pools. Also staking, called Binance Earn.
To find it, go to Top Menu > Finance > Binance Earn
It’s called Earn rather than “Binance Stake” because of the many ways to earn passive crypto. Binance supports locked staking, parachains auctions, launch polls, dual investments, the “vault,” auto-investing (see DCA), and high-yield staking.
If you want the simplest option, here are the steps:
- Find the coin you want to stake on the list. As for November 2021, there are +78 locked-staking and +11 defi-staking options. Find it on Binance Earn before you buy the coin.
- If you do, buy or send the coin to Binance Wallet
- Click on Stake and enter the amount
- Confirm to start staking that same day
- Track your rewards and Unstake when convenient
Binance Earn fits for both Hodlers and short-term traders as there are fixed and flexible savings plans.
The first type will lock your principal while offering higher yields. If you stake long-term, coins like ETH 2.0. can yield 5% to 20%. For the second one, it’s 5% to 15% APY (and up to 90% if it’s high-yield).
Flexible staking has no lock periods, but payout timing still applies. Even though Binance credits rewards every day, each network has a different distribution date. If you unstake before that time, you may lose up to seven days worth of rewards.
So if you want to stake dozens of coins with 0% fees, plus countless features, Binance can’t be ignored.
Celsius Network
It’s surprising so few know about the Celsius DeFi Network. It’s available worldwide, has no fees, and offers almost 60 coins to stake. Some of which you can’t find on Binance.
Only verified accounts can earn on Celsius. Once you do:
- Go to Dashboard > Weekly Reward Rates to find your coin
- Buy/Send the token to Celsius
- Click on the coin, which will appear in the dashboard on the right
- Click on stake, enter the amount, and confirm
The downside? It only yields 2% to 10% per year and distributes rewards every Monday. If you aim for +15%, here are some quick fixes:
- Celsius rewards: You get up to 25% more rewards when holding the platform’s token (CEL).
- Celsius Loans: Besides staking, you can borrow crypto as well. You can boost staking rewards by reinvesting your loan. Assuming a reasonable interest and deadline, it’s less risky than leveraged lending.
Celsius launched in 2017 with the vision to replace banks. It’s available in +150 countries (limited features in the US) and its token trades over $5M per day. It’s a defi-only platform with no exchange, which limits the listing of new coins.
The best selling point, ironically, is the 10% APY on stablecoins. So if you want to hold dollars in crypto, Celsius easily beats the 0.50% of traditional savings accounts.
Exchange Staking: Pros And Cons
Staking is as risky as holding cryptocurrency. While APY helps, price changes affect your profits the most. You want your funds to be available while getting maximum returns.
Exchange staking is easy. But is it worth it?
Here’s why it is:
- Selection: Most networks require $1,000s of staked tokens before you can get any rewards. If that’s expensive, imagine doing it with every coin you want to stake. When exchange staking, minimum amounts are rarely above $20.
- Low Entry: You don’t need to choose validators or learn how staking works. You just buy crypto and click on Stake. The exchange does all the work.
- Automatic: The exchange ensures liquidity, oversees the PoS network, and claims rewards for your account. It can compound interest daily and even switch to the coin with the highest APY (on Yearn Finance and similar aggregators). You can spend years without entering the platform and still earn passive income.
And why it’s not:
- Reward Distribution: As long as rates are competitive, exchanges try to charge as much as traders are willing to pay. Whatever the rates are, they can change them anytime.
- Control: You only make money because the exchange allows it (because you make them money too). But for whatever reason, they can change rates, remove coins, increase fees, suspend accounts, or disable features. They’re neither liable for your losses if they fail to secure the wallets.
- Delays: While all networks have payout times, exchanges can set their own rules for better liquidity. During sharp price moves, delays are the rule. Even if you time the market right, you can’t execute because of the platform malfunction.
These limitations amplify with online exchange staking. The platform acts as the borrower who can use your funds (e.g., for liquidity purposes). And if they lose them, the exchange assumes limited liability and insurance.
When cold staking, however, your crypto earns rewards by staking from cold wallets. It ensures maximum asset protection. And out of this list, only Binance locked-staking offers it.
Should You Stake Cryptocurrencies?
Staking can be a middle point between holding and dollar-cost averaging (DCA). It’s like a (free) recurrent buy-order. And when yield farming, it’s a low-risk strategy to expand your portfolio.
If you want an additional stream of passive income, staking (and holding) is for you. If you prefer more risk-reward, there are better options out there. Still, staking makes a great complementary tool to profit from idle crypto.