Cardano has introduced itself to top decentralized finance (DeFi) projects like Bitcoin and Ethereum, recently becoming the 3rd-largest cryptocurrency by market cap. Cardano is a proof-of-stake blockchain platform that aims to “redistribute power from unaccountable structures to individuals.” Currently, Cardano’s value is widely speculated — its smart contract ecosystem has yet to be built out.
Here’s a look at where to earn interest on your Cardano as well as how to go about that process.
How Does Earning Interest on Crypto Work?
Earning interest on crypto is similar to earning interest on fiat. When a user holds their crypto on an exchange it provides liquidity for the platform. Users are then rewarded with crypto in the form of an annual interest rate, known as a process called staking. By staking Cardano, users are participating in the security and governance of the Cardano blockchain network by validating smart contracts.
Binance Overview: 7% APR on ADA
Binance is a cryptocurrency exchange that allows users to buy, sell and store their crypto. Binance also offers a variety of staking pools, which allow users to earn interest on crypto they have stored in their Binance wallet. The staking process operates on a first-come, first-served basis, with crypto interest paid out daily.
Binance offers a few different options when it comes to staking, and has the highest interest rate (with a catch). You can lock in a fixed rate of up to 7% when locked in for a fixed term of 60 days. There is also a flexible option of just 0.48% APY for traders who wish to accumulate small rewards, while still being able to trade Cardano.
Best For
long-term cryptocurrency investors
Other Options for Earning Interest on Cardano
A solid option with no lock up times is Nexo. Nexo.io offers just over 6% APR on ADA tokens staked on their platform. Plus, the platform has much better reviews and is more trusted among cryptocurrency investors.
Other exchanges offer their own interest rates for staking on their platform. Crypto.com for example offers a 2% to 3% fixed-rate option. Determine which rates work best for you before staking your cryptocurrency.
How to Earn Interest on Cardano
Earning interest on Cardano is not much different than earning interest on other cryptocurrencies. When you’ve settled on where to buy your Cardano, follow these easy steps to start passively earning Cardano.
Step 1: Open an online account.
The first step to earning interest on Cardano is opening an account with your exchange of preference. For this example, it’s best to use Nexo, as the platform offers a high interest rate without lock up times. Plus, assets on Nexo are insured, adding a level of security to your investment. Make sure your password is strong and secure; this will minimize the chances of your account being compromised.
Step 2: Purchase cryptocurrency.
The next step is actually purchasing Cardano using the exchange you signed up for. This can be done by simply adding a debit card of your choice and making a one-time payment. There is also an option for recurring purchases if users are looking to accumulate more Cardano. Once you have purchased your Cardano you can now start the staking process.
Step 3: Earn interest on your crypto.
When the desired amount of Cardano is in your account, you are now able to begin staking. Nexo pays out interest on a daily basis, letting your digital assets compound to earn you high interest rates. Plus, there’s no fees on withdrawals on the platform.
Other Platforms to Earn Interest on Cardano
Crypto.com is a digital asset service that allows users to buy, sell, trade and stake their cryptocurrency through their beginner-friendly crypto app. The app supports a list of 30 different coins that can be staked on the platform, including Cardano, where users are able to earn 3% when locked into a fixed term of 3 months. Although Crypto.com may not offer the highest staking rewards, staking can be increased to 5% for a fixed 3-month period by holding 500,000 CRO tokens in their wallet.
Crypto.com strives to make cryptocurrency a part of everyday life by offering a full suite of services for crypto users. The company offers a Crypto.com App, Exchange, Visa Card, DeFi swap, DeFi Wallet, DeFi Earn, Crypto.com Price, staking, crypto lending, and many other services. What really sets them apart, however, is the combination of super low fees and incredibly generous rewards programs for their users.
Best For
- Traders who want access to a secure, low-cost cryptocurrency exchange
- Passive investors who want to earn interest on their balance without frequent trading
- Mobile investors who prefer to handle all their crypto needs via their phone or tablet
- Low fees
- High security
- One-stop shop for all your crypto needs (wallet, trading, spending, and more)
- Lots of ways to earn interest, rewards, and rebates
- Low privacy
- Customer service response time could be improved
Risks of Earning Interest on Crypto
When dealing with cryptocurrencies, there are always going to be risks involved. One of the main things to be aware of is when staking, the centralized exchange now has control over your crypto. Users wishing to trade that crypto are unable to until the fixed term is done. There is also a large volatility risk when dealing with crypto. If you buy crypto then stake it, and the price goes down, you will end up losing more money than you’ll make with the interest of staking.
Cryptocurrency is a highly volatile market. Make sure to do your own research before staking, and never invest more than you can afford to lose.
Is Earning Interest on Cryptocurrency Worth It?
Depending on what you want to do with your Cardano, earning interest on it may be beneficial. If you plan to actively trade your Cardano, staking may not be the best option. To earn rewards on Cardano that you do not actively trade, staking may be a great choice. Always make sure to do your own research to find which staking option best works for you.
Benzinga crafted a specific methodology to rank cryptocurrency exchanges and tools. We prioritized platforms based on offerings, pricing and promotions, customer service, mobile app, user experience and benefits, and security. To see a comprehensive breakdown of our methodology, please visit see our Cryptocurrency Methodology page.
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