How to Start Staking Crypto for Passive Income in 2026

Staking is a great way to earn rewards without locking up your crypto tokens. However, there are a few things to keep in mind.

Staking is usually done through centralized exchanges and platforms, which means you’re delegating your assets to third parties. This can pose risks if the platforms aren’t reliable or secure enough.

What is crypto staking?

Cryptocurrency staking is a way to earn rewards on your staked assets while also helping the network run securely and smoothly. It’s becoming increasingly popular as blockchain networks adopt staking and more investors seek ways to grow their cryptocurrency holdings while supporting the projects they invest in.

Staking is a process used by cryptocurrencies that use the Proof of Stake consensus model to validate transaction data and create new blocks on their blockchain. Those who participate in the staking process, known as validators, can earn token rewards for their contributions. The rewards earned are based on the amount of coins staked, which can be done passively or actively. Typically, active participation requires more time and resources, but can offer higher token rewards.

In the case of passive staking, users entrust their tokens to a staking pool operated by a third party, which is often a CEX exchange. In the case of active staking, validators must keep their own staked assets in a wallet that is compatible with the network they’re supporting. Whether they’re actively or passively participating, there are risks to consider.

How to start staking?

Staking is a simple and secure way to generate passive income from your crypto investments. While the rewards can be substantial, there are a few things to keep in mind before getting started.

First, you’ll need to choose a cryptocurrency that supports staking. This is typically a cryptocurrency that uses proof of stake or a similar consensus mechanism. Once you’ve chosen a cryptocurrency, you’ll need to acquire it through one of the many exchanges that offer it.

Then, you’ll need to set up a staking wallet. There are several options for this, ranging from a more hands-on technical setup to the easy one-click solutions offered by many popular exchanges. Once your wallet is ready, you can start staking by submitting your coins or tokens to a validator. The more you contribute, the higher your chances of being selected to validate transactions and earn rewards. This is called passive staking, and it’s the most popular method for generating passive income from your investments. However, there are other ways to participate in staking as well, including active staking and delegated staking.

Risks to consider

Crypto staking has become a popular way to earn passive income. By locking up their tokens to help secure a proof-of-stake blockchain network, staking participants can earn rewards over time. But while staking offers a high-yield alternative to savings accounts, it’s not risk-free and should be considered carefully.

For starters, there is a risk that the price of staked assets can decline. This can affect the value of the staking rewards and may also result in a loss of value of the staked asset itself. Furthermore, staking rewards can be slashed (partially confiscated) for violating blockchain protocol rules or due to network vulnerabilities.

There are also risks related to staking via exchanges, which typically have low liquidity and impose long lock-up periods. These limitations can make it difficult to respond to market changes and can also result in significant losses. The credibility of staking projects and pools is another factor to consider, as well as the sustainability of annual percentage yield (APY) rates. Staking on a reputable platform with reasonable security measures can mitigate many of these risks.

Typical staking rewards

Crypto staking rewards are a steady stream of passive income that can grow your coin holdings. Unlike crypto mining, which requires specialized hardware and technical knowledge, staking is relatively simple and accessible to most investors.

Staking pools and platforms can offer staking opportunities on a wide range of blockchain networks, allowing investors to diversify their portfolios without exposing themselves to high risk. However, fees and lock-up periods can lower staking returns. In addition, slashing penalties and market volatility can affect the actual value of rewards.

Investors can choose to delegate their tokens to a staking pool or run their own validator node (more complex). While the latter offers higher returns, it may require extensive investment in specialized hardware and technical expertise. Regardless of which staking model you choose, it’s important to consider factors that go beyond advertised yields, such as inflation, to ensure your investments are sustainable.

Tips for safe investing

Crypto staking offers passive income, an overall contribution to proof-of-stake network security, and higher returns than most savings accounts or certificates of deposit (CDs). But it’s important to know what to look for and avoid when investing in this unique type of fixed-income asset.

First, it’s important to choose a cryptocurrency that supports staking. Many exchanges offer this capability, but you’ll want to research the specific staking requirements for your chosen network. These can include minimum staking amounts, potential lock-in periods, and reward structures. Some networks require you to run your own staking node. This is usually not a problem, but it’s an extra step that requires a bit more technical knowledge than simply using a platform like Best Wallet.

Liquid staking is one of the latest innovations in this space, allowing you to earn rewards on your staked assets by generating a derivative token that you can use in DeFi platforms. This can offer higher yields but also carries more risk. For this reason, it’s best suited for more advanced users who understand the risks and rewards of DeFi.