From a user’s standpoint, staking is a way to earn passive income on locked crypto funds. In the background, however, the tokens are committed to securing the blockchain network in a proof of stake consensus algorithm. Funds are locked to ensure honesty in validating blockchain transactions; bad actors receive a penalty, which varies from blockchain to blockchain.
Tread carefully as you negotiate the intricacies of how to stake on KuCoin Exchange. Best to join a pool before going solo once you have a gut feel of what you need to do.
Some blockchains use delegated proof of stake mechanisms. In the case of a delegated pos mechanism, staking rewards are distributed to delegated validators, who then distribute the rewards to stakers below them. Solo staking and block validation is a demanding task and is not recommended for beginners.
A factor exclusive to the KuCoin exchange is that it allows users to buy and stake in a plethora of low-priced coins, being the world’s biggest secondary market of niche coins. KuCoin exchange’s other functions include Spot trading, Margin trading, P2P fiat trading, Futures trading, Lending, and investing in new project tokens.
KuCoin exchange is the fifth largest cryptocurrency exchange based on web traffic, liquidity, and trading volume. Beginners can make a selection among the various pools available within the KuCoin Exchange.
Also Read:
What is KuCoin Exchange?
KuCoin is a centralized cryptocurrency exchange with over 700 listed crypto assets and coverage in 200 countries. KCS, its native token, is built on the Ethereum chain and has a total supply of 200,000,000. The exchange boasts that one of every four crypto users is on KuCoin.
Services offered by the KuCoin exchange include stalking cryptocurrencies, crypto lending, cryptocurrency market trading, peer-to-peer trading, and derivatives trading, and also features an NFT marketplace.
KuCoin Exchange Staking
Cryptocurrency staking is committing your crypto holding to validate transactions on the blockchain while being rewarded. This form of validating transactions is called the proof of stake (POS) consensus algorithm, which is much more sustainable than a proof of work consensus mechanism.
The Proof of Work consensus algorithm is an energy-intensive way to validate transactions. The decision by Ethereum to perform a consensus algorithm switch to POS mechanism made staking a popular topic among crypto enthusiasts.
Cryptocurrency staking on the KuCoin exchange is a profitable and user-friendly way to earn passive income on your crypto holdings. Staking rewards are paid out daily with the option of enabling efficient compounding for higher returns.
Staking rewards can be paid out through the token staked or other assets. The number of staking rewards also varies depending on the cryptocurrency and lock-up period. The projects that support staking include Icon, Tezos, Ethereum 2.0, Algorand, Cosmos, etc.
What is a KuCoin staking pool?
Staking pools are pooled resources or assets that are staked as a batch. Some tokens, Ethereum, dictate a minimum staking amount; pools enable users to pool their assets and meet the requirement. Large staking pools increase the likelihood of a validator approving a blockchain, leveraging higher returns for stakers. Some validators charge a fee to stake on their pools.
KuCoin staking pools are incredibly user-friendly; stakers receive rewards in proportion to the amount staked. The Ku coin staking pool requires low minimum amounts with zero withdrawal fees.
There are two types of Staking, Soft Staking, and Cold staking
Soft Staking
The soft Staking program is a feature on KuCoin Earn that enables users to earn daily rewards without a locking period. The concept was introduced in 2019 and today has over 300,000 users. Users can opt to compound their coin or token balances for consistent passive income.
The soft staking program adds flexibility to portfolio management with quick and efficient compounding.
Cold Staking
Cold staking works similar to normal staking, only that the assets are held in an offline wallet such as ledger nano. The advantage of cold staking is that the user has complete control of their account since they own private keys to the wallet. Cold staking also grants voting powers on proposals made on the blockchain.
The disadvantages of cold staking are that only a few exchanges support the feature, and you will not have the option of joining a staking pool.
Things to remember
● Users must ensure they have enough coins in their Pool-X account.
● During the staking period, the staked coin asset can be traded in the liquidity trading market and unlocked as well. However, one must also remember that each flexible product has a redemption period.
● For Flexible staking, staking and POL rewards do not accumulate during the redemption periods.
● Users receive their staked coins after the redemption process ends. The staking rewards and the mining rewards (denominated in POL) are added to a user’s Pool-X account regularly.
How to lend on KuCoin Exchange
KuCoin lending is another easy way to earn passive income on the KuCoin exchange. Unlike staking, funds from crypto lending are used by margin traders to leverage their trades on the platforms. The borrowed funds are also used in decentralized finance (Defi) to earn interest on other platforms. KuCoin exchange has a portfolio of over 100 cryptos for lending. Interest is paid out daily with a lock-up period of 7, 14, or 28 days.
To lend out on KuCoin, you need to know what crypto to lend out, the interest you are willing to accept, and the loaning period. Lending rates are competitive, so high rate orders may not get filled up.
Sometimes the loanee may repay before the lending period ends; in this case, the lender has to set up another order which might be frustrating, especially if you don’t have spare time to keep checking your account. But, worry not, KuCoin has an auto lend function that automates the order when the loanee repays the order. The loanee funds are usually liquidated if they cannot repay a loan.
How to Stake on KuCoin Exchange
Staking on KuCoin is a straightforward process and most recommendable for beginners. Staking Polkadot and Ethereum is different from his standard procedure.
- Create and Log in to your KuCoin account. Fund the account.
- Hover over the “Earn” tab on the taskbar at the top of the page and select “KuCoin earn.”
- Scroll and select the asset you want to earn interest on the crypto.
- Click the green “Subscribe” button on the right side
- Read and understand the terms of the agreement.
- Type in the number of tokens you want to stake.
- Click “Subscribe.”
How to Stake Ethereum on KuCoin Exchange
The Ethereum blockchain will upgrade from its proof of work consensus algorithm to a more scalable and sustainable proof of stake mechanism. Users can stake on the upcoming upgrade to earn rewards. The upgrade is dubbed “the Merge.”
Through the KuCoin’s staking pool, users can stake as little as 0.01ETH, which is considerable compared to running a validator node with a minimum of 32 ETH.
- Create and Log in to your KuCoin account. Fund the account with ETH.
- Hover over the “Earn” tab on the taskbar at the top of the page and select “KuCoin earn.”
- On the second tab, select “ETH 2.0.”
- Click “Start ETH 2.0 Staking.”
- Enter the number of ETH you want to convert to ETH 2.0.
- Click “Subscribe.”
The Ethereum staking reward is paid out daily as ETH2.0. Users can trade ETH 2.0 on the KUCoin spot exchange.
How to Stake Polkadot on KuCoin Exchange
Polkadot is made up of parachains, relay chains, and bridges. Parachains are connected to the relay chain through a slot, providing them with the Polkadot network’s security and cross-chain interoperability with other parachains.
DOT holders can stake DOT to support projects. If the project wins the auction, the user receives on-chain rewards, and users will return the staked DOT after the lock-up or lease period.
If the staked project wins the slot bid, users will return the staked DOT after the end of the slot lease period without any on-chain staking rewards. If the staked project loses the bid, the DOT assets contributed to the bid will be returned to the user’s account.
- Create and Log in to your KuCoin account. Fund the account with DOT.
- Hover over the “Earn” tab on the taskbar at the top of the page and select “KuCoin earn.”
- On the second tab, select “Polkadot.”
- Select the project you would like to bid on the crypto.
- Enter the number of DOT you want to commit to the project.
- Click “Subscribe.”
How to Stake ADA on KuCoin Exchange
- Create and Log in to your KuCoin account. Fund the account with Cardano
- Hover over the “Earn” tab on the taskbar at the top of the page and select “KuCoin earn.”
- Scroll and select Cardano if you want to earn interest in crypto.
- Select the project you would like to bid on and the lock-up period.
- On the right-hand side, click “Subscribe.”
KuCoin Passive Income Strategies
- Crypto lending to earn interest.
- Soft staking program through a professional asset manager
- Hold Ku coins to earn daily bonuses
- Empower hashrate and earn interest on KU Coin mining pools
- Cloud mining
How much can you earn with KuCoin Exchange staking?
Staking rewards depend on the token being staked and the lock-up period. The interest is not fixed and varies from day to day. The Pikaster crypto has the highest APR at 365.15% at the time of writing. Bitcoin is at 0.39%, Ethereum at 4.46%, USDT at 12.5%, and BNB at 8.31% apr.
Benefits of staking on KuCoin Exchange
- While mainnet delegation and staking might require enormous effort to maintain the status quo, KuCoin soft staking does not. Soft staking through a professional asset manager is hassle-free as it takes care of all the staking work.
- The staking pools and staking rewards are actively updated to provide users with attractive staking rewards.
- Users can opt to compound their coin or token balances for consistent passive income.
- The soft staking program adds flexibility to portfolio management with quick and efficient compounding without a lock-up period.
- KuCoin has a diverse portfolio of staking and lending cryptocurrencies.
- It’s nothing less than staking the infrastructure of an alternative dApp ecosystem.
- KuCoin staking pools leverage higher interest rates for its community.
- Zero maintenance and withdrawal fees on staking products
- Staking on the KuCoin exchange is immune from attack by bad actors delegating on the blockchain.
Risks of staking on KuCoin Exchange
- Staking any crypto assets on the KuCoin exchange has its dangers, just as with all forms of investing. The first and most obvious hazard of staking any cryptocurrency is the token’s value dropping over time.
- Volatile crypto interest rates are another example of a specific danger. The interest rate on staking pools near total capacity will be lower than those with fewer participants resulting in slippage losses. That’s because, in a larger pool, there are more stakers to share the profits.
- Another disadvantage when you stake on lock-up is that you can’t utilize the delegated coins while locked, though they may be redelegated at any moment.
- Staking can be done on centralized exchanges like KU coin, but the tokens must be frozen for a certain amount of time – 30, 60, or 90 days for higher returns.
Should I Stake on KuCoin?
Staking on the KuCoin exchange is a quick and user-friendly way to earn passive income on your crypto holdings. Staking pools leverage higher interest rates for the users. However, crypto still carries the risk of losing value and high volatility. Price drops and slippage caused by supply and demand forces could result in losses.
Source: https://www.cryptopolitan.com/how-to-stake-on-kucoin-exchange/