Cryptocurrency staking has been one of the easiest ways to earn income online. You just need to buy some cryptos and stake them. But most of us do not have a good platform to rely upon.
That changes with Kraken Staking! A cryptocurrency exchange that features a much better staking platform with high yields. Further, you can do the entire process of buying crypto, staking, getting rewards, and selling it to get money through one single platform.
What is Proof-of-Stake?
The First Generation of Cryptocurrencies solved the Double-Spending problem. This means users cannot spend one coin twice.
The Proof-of-Work algorithm verified transactions. Though this was a revolution, it was also a problem – “Huge Energy Costs” to verify transactions.
The Proof-of-Stake algorithm verifies the transactions using a proportionate voting method where the number of cryptocurrencies you own decides your voting power.
Your rewards for the verifications also are distributed using the same weightage. This means the number of cryptocurrencies you own decides how many rewards you will get.
Why has Staking become popular?
Simple, the greater the number of cryptos you hold, the higher your voting power and, hence, higher rewards. This is also an excellent way to earn passive crypto income from coins that are lying idle.
You need to buy a proof-of-stake-based coin, hold it or stake it to get rewards. Now let us dive into what Kraken has to offer regarding staking.
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Kraken Staking Navigation
The navigation is easy. Landing on the home page, you need to click on Features; staking will be on the fourth option of the menu. Click on it to load the page.
Buying Methods in Kraken
You can also directly deposit coins from other wallets. You can buy using traditional methods such as wire transfer, credit card, SWIFT, etc.
Both ways include fees. However, funding via crypto is preferable due to low fees and faster transfer, whereas banks take 1 to 5 business days.
Kraken Staking Rewards
Kraken Staking offers up to 23% returns on staking on multiple coins and tokens. The highest rewards are on the KAVA chain at 23% APY.
There are no stablecoins to stake. An interest earnings program is also available for USD at 2% APY and Euro at 1.5% APY.
Kraken also offers off-chain staking. Though off-chain staking is not staking, in reality, Kraken offers a system through which funds are transferred to other parties and an interest income is generated.
Benefits of Compounding
An exciting feature of Kraken Staking is Compounding. With compounding, you can get rewards from staking, but those rewards can be combined with your initial coins to get more rewards.
Which coins are available in Kraken?
Kraken offers a vast array of coins. You can buy these coins directly using cash or wallet deposits with other cryptocurrencies. For more details, visit their coin page.
Is Kraken Staking safe?
Security is a very critical aspect of many proof-of-stake cryptocurrencies. Proof-of-stake cryptocurrencies are often attacked by a method called Sybil Attacks.
In Sybil Attacks, a criminal tends to populate the cryptocurrency platform and blockchain with many fictitious accounts to control the Blockchain.
Kraken secures its platform by the following methods:
- 95% of the assets are distributed among different geographical regions in cold storage facilities. These facilities are air-gapped, which means they cannot be accessed via the internet by any third party.
- All sensitive information is encrypted, and access is tightly controlled.
- Kraken has a dedicated team that tests the system in every possible way, which can attack, and they keep making continuous improvements.
- Kraken has its servers in locations that are guarded by armed security.
Kraken Staking Fees
Currently, Kraken charges no fees for staking. However, there is a withdrawal fee. You can visit the fee page for further details.
Advantages of Staking with Kraken
There are several benefits to stake on Kraken. Some of them are better than many industry peers. These are:
- Instant rewards with up to 23% APY— You do not have to unstake to get a reward. Compared to other staking platforms, in which you must unstake to earn rewards, Kraken Staking seems a much better option.
- Payouts twice a week are faster than many industry leaders since you can get more crypto to spend without waiting for longer durations or unstaking. Or you can simply reinvest those to earn even higher returns.
- The platform’s digital and physical security is robust and can handle standard and uncommon attacks.
However, there are a few issues too!
- Kraken has a low score on Trustpilot, indicating a low-quality user experience. Most of the negative reviews were about the customer service response delay.
- The staking rewards are not very high. The highest available reward is for staking Algorand and is around 4.75%. On comparing Kraken and Binance, for crypto staking, Binance offers up to 130% in staking rewards.
Kraken is one of the well-known crypto exchange platforms. It has a good user base and supports staking in about 14 assets that can be bought and swapped by direct deposit from other wallets.
However, the staking rewards are lower than many cryptocurrency exchanges like Binance. The physical, as well as digital security, is top class. The most damaging aspect of the platform is the low customer service rankings.
Overall we would like to suggest that you can use platforms like Binance or KuCoin, which offer much better customer service and higher returns.
Why is Kraken preferred for staking?
Kraken is popular because of its reward mechanism, low fee structure, and robust security.
Is Kraken Safe to use?
Kraken stores 95% of its assets in guarded cold storage. It never had any major security issues.
What are the rewards for Kraken Staking?
The staking rewards are not very high. The highest available reward is for Staking Algorand and is around 4.75%
How am I going to be taxed on my crypto-staking gains?
Taxation is one of the most confusing issues in cryptocurrencies. Countries like the USA and the UK consider cryptocurrencies as financial assets. These countries tax them at Capital Gains Tax. Other Countries like Singapore have very Crypto friendly tax policies. They tax the crypto gains as income tax. Moreover, countries like India have still not clarified how cryptocurrencies will be taxed.
Can we stake ADA on Kraken?
ADA is staked on-chain in Kraken with an APY of 4-6%.
What are Kraken’s staking rates?
The highest reward is on KAVA at 23%APY. Other staking rewards are for Cosmos(12%), Ethereum(up to 7%), Polkadot(12%), etc.
How much APY is for KAVA staking on Kraken?
KAVA Staking rewards are at 23% APY on Kraken.