Proof of Stake coins are a great way to earn interest on your cryptocurrencies. By freezing your coins, you can earn a healthy dividend, all while keeping your coins secure, and without selling them! Here are some projects with the best returns right now.
With the majority of PoS stake projects, a larger stake (more coins) often equates to a larger reward, but that’s not always true with every coin. Some projects return a random number of coins per stake, and others return a fixed amount, which varies by project.
If you’re not sure how Proof of Stake works, to begin with, then read our blockchain consensus algorithm comparison, it covers everything you need to know to get up to speed fast.
1. NEO: 2.4%
NEO’s “smart economy” is a solid choice for staking. NEO uses the GAS token to pay for transactions, and as a block reward. Every time a node discovers a new block, all NEO holders receive a share of seven GAS tokens, distributed automatically and equally. If you stake more NEO tokens, you’ll gain a larger share of the reward, proportional to your stake.
To calculate your reward, there’s a formula to follow:
Your Holdings * 7 * 5760 / 100,000,000
This formula returns your daily reward in GAS, but don’t forget your smart contract transaction fees get deducted from this figure, so it’s often lower than the formula implies. Suppose you own 10,000 NEO (valued at roughly $123,000 at the time of writing). Your daily earning could be roughly $8, or 0.69 NEO. This results in a yearly increase of roughly $2952 (240 NEO), or 2.4% of your total holdings.
This yield is subject to change. If the block time increases, or the price of NEO decreases, you’ll see a reduction in your reward, but roughly 3% is an excellent return, especially if you purchased your NEO a long time ago, or purchased them during the ICO. The best part is you only need one NEO to join in.
2. PIVX: 9.4% ROI
Privacy coin PIVX yields a much larger return than NEO, at roughly 10% annually. You’ll need a recommended minimum of 100 PIVX to start staking, and while you can earn rewards with less, you’re unlikely to see any significant gains.
The block reward distribution varies depending on who discovers the block. Rewards get distributed in PIV and zPIV tokens, and the distribution depends on the token you stake.
If staking PIV, masternodes receive 3 PIV, and stakers receive 2 PIV. For zPIV, masternodes receive 2 zPIV, and stakers get 3 zPIV.
PIVX will “flip-flop” between PIV and zPIV, in an attempt to reduce bias by leaning more towards masternodes, or stakers. As the transaction fees are almost non-existent with PIVX, you won’t earn any through staking. The tiny fees that get charged are burnt immediately.
If you stake 10,000 PIVX (worth roughly $3000 at the time of writing), you can expect a yearly ROI of roughly $286 (940 PIVX), or 9.6%. This is the ROI for zPIV and reduces to 8% for PIV staking.
3. Tron: 4.4% ROI
Tron’s ROI sits at roughly 5%, and as the current market price at the time of writing is roughly $0.02, you can get a lot of coins for your money. You’ll need at least one Tron to start staking. Tron’s PoS works differently to the two previous coins. Tron uses a Delegated Proof of Stake, whereby participants (stakers) use their coins to vote for a representative, and the representatives decide how to distribute earnings. Most representatives proportionally distribute earnings to voting members, but it can vary.
There are 27 “super representatives”, and these are the nodes with the most votes (one Tron is equal to one vote). If your representative only gains enough votes to be the 28th representative, you won’t receive any rewards. There are 182 super representative candidates, so the battle for supremacy can be fierce.
Every block rewards all super representatives with 32 TRX tokens. Besides this reward, every super representative candidate earns 115,200 TRX proportionate to their votes cast in the super representative elections. These elections happen every six hours, so even if your chosen candidate does not become a super candidate, you may still receive a share of the earnings.
If you stake 10,000 TRX (worth roughly $200 at the time of writing), you can expect a yearly ROI of roughly $8.5 (440 TRX), or 4.4%.
4. Zcoin: 17% ROI
Zcoin currently provides a massive 17% return on investment. Like PIVX, Zcoin uses masternodes, with 30% of the block reward reserved for them. The block reward is 25 XYZ tokens, but you’ll need at least 1000 XYZ to start. Currently costing $7.76 at the time of writing, you’ll need to hold significant value to start staking at all.
Staking pools (which are like mining pools) are a popular choice with Zcoin, due to the high entry point. These pools generally work quite well, and most offer a proportional percentage of the total pool reward, but they aren’t perfect. By joining a pool you lose the liquidity, and ability to instantly withdraw your funds. To exit, you need a pool member to buy your coins. The pool may not have enough funds to function without your coins, so most won’t let you leave quickly.
5. DASH: 6%
DASH works as a real-time cash replacement and costs less than a cent to transfer funds anywhere. While it’s a Proof of Service blockchain, the masternodes used for earning rewards work in a very similar way to PoS.
To earn dividends with DASH you have to run a masternode. This isn’t that difficult to do, but you do need to own at least 1000 DASH. Whether you were an early adopter of DASH, or have deep pockets, the annual return of roughly 6% is well worth the effort.
If you stake 10,000 DASH (current worth a cool $1,115,000), you can expect a yearly ROI of roughly $73,000 (620 DASH) or 6.3%.
Start Staking Today!
While we’ve only covered a fraction of all the Proof of Stake coins available, these options represent some excellent choices. Don’t forget though, that PoS is still a risky business. The crypto market could crash, again, and wipe out the value of your coins, nevermind the percentage increase you gained from staking.
Your chosen cryptocurrency could collapse, or suffer a catastrophic hack, leaving it unable to continue. Maybe the staking pool you join is a scam, or what about a good old fashioned software bug in your blockchain of choice?
Like all things in the crypto space, keeping hold of your own private keys is generally a good idea, and staking using coins you already own or purchased at low prices represents less risk than spending all your inheritance on cryptocurrency. Our private key security guide may be helpful here.
Don’t be afraid to stake, as there are lots of opportunities to make your coins work for you. By remaining diligent, and voting through official project endorsed wallets, you’re unlikely to encounter too many issues. Whatever you stake, let us know in the comments section below.
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