- 1 Proof of Stake (PoS)
- 2 Top Proof of Stake Coins
- 3 Tron
- 4 Nuls
- 5 Shift
- 6 Particl
- 7 Qtum
- 8 VeChain
- 9 Hshare
- 10 Bitbay
- 11 Waves
- 12 Memetic
- 13 CloakCoin
- 14 PeerCoin
- 15 KekCoin
- 16 Deep Onion
- 17 Wagerr WGR
- 18 Cardano ADA
- 19 ARK
- 20 Bean Cash
- 21 Linda
- 22 Decred DCR
- 23 Neblio
- 24 OmiseGO OMG
- 25 DASH
- 26 NEO
- 27 PIVX
- 28 LISK
- 29 OkCash OK
- 30 NAV Coin
- 31 STRATIS STRAT
- 32 Reddcoin
- 33 Ethereum POS
- 34 NXT
- 35 Phore
- 36 Causes for Low Proof of Stake Earnings
- 37 What to look out for?
- 38 Conclusion
- 39 Notes
In this article we take a look at several Proof of Stake coins as a way to earn passive income.
With wider cryptocurrency adoption, investors are looking for passive income in order to make their crypto work for them. But that’s easier said than done.
In these early days of cryptocurrencies, not many solutions exist that provide safe and consistent returns.
Some passive income programs have turned out to be ponzi schemes and many investors have grown justifiably wary of participating in such networks.
Proof of Stake (PoS)
Proof of Stake is an excellent decentralized solution which allows investors to earn cryptocurrency passive income. (That last phrase surely has a nice ring to it, doesn’t it!)
PoS does not depend on any centralized exchange since the blockchain itself is the ledger and participants earn income proportional to the amount they have staked.
As long as the stakeholders do not attempt to defraud the system (in which case the stake is debited proportionally to the fraud amount), the staked amount is 100% safe and will provide consistent returns as blocks are minted.
Worst that can happen in a PoS system is, assuming no serious software vulnerabilities exist, to earn zero or too low returns. (We’ll take a look at why this may be the case later in this article.)
Top Proof of Stake Coins
Several top rated cryptocurrencies provide passive income via PoS. Here we take a look at 33 of these coins and provide tips so you can achieve the best results.
Remember: we’re not judging these coins’ main application – but only their performance as passive income cryptocurrency investments.
If your favorite coin doesn’t score a favorable review here, remember the focus of this article is simply the coins’ profitability as a buy and forget type of investment.
We’ve tried to make this guide as comprehensive as possible so you can make the best choice for your next season of crypto purchases.
Tron currently yields 7.3% annually. Average PoS returns but excellent liquidity. Easy to buy, sell and trade on most large exchanges.
Nuls currently has a 18.15% yearly return rate. Not a very popular coin, low network difficulty reflects that.
At 12% annual yield, Shift is a good performer in the PoS arena.
Particl currently yields 5% annually.
At 5.23% yearly returns, Qtum is not exactly one of the top performers in this comparison. Very popular, will be easily traded, but not exactly a star in the passive income arena.
At 2.45% yearly returns, VeChain might be great for many applications but not as a PoS passive income investment. High liquidity and many interesting projects stemming from the VET ecosystem, but not great as a passive income asset.
Yielding 6% / year, Hshare has attracted many investors although it’s not one of the top PoS performers.
Bitbay investors receive 8.9% staking rewards per year.
Waves currently presents 2.9% annual returns. Not one of the best performers but has high liquidity, large community and is easy to trade.
Memetic yields 23% annually. Watch out for low liquidity.
At 6% annual PoS rewards, CloakCoin is an average performing passive return investment.
At just 1% yearly yield, this probably won’t be your choice to invest in PoS cryptos for the time being.
Despite being low yield, PeerCoin is not really one of the most popular coins – it ranks 145 at CoinMarketCap today. The 1% yield is hard coded into the coin algorithm and isn’t a result of network difficulty.
Those who invest in KekCoin won’t get rekt as far as PoS returns go. 18% annually yield makes it a great performer.
Official cryptocurrency of the “blockchain of Memes” (Memechain).
At 10% annual yield, Deep Onion is a Tor user’s best friend. As the name suggests, anonymity is its greatest strength.
At 5% yearly return, this is a below average performer as far as PoS rewards go.
We have no historical data to predict Cardano returns, but we’re able to draw some estimates based on their published staking rewards information
Solving an empty Cardano slot would reward 0,18 ADA.
Our estimated average Cardano slot reward will be 0,22 ADA.
Calculating the probability that a Cardano stakeholder will win a slot and adding up the average slot size reward yields the estimated rewards.
Use our Cardano Staking Calculator to check how much you can earn daily, monthly and yearly.
Unless the Cardano ADA formula is changed, then you should expect less than 4% yearly returns.
Network difficulty has high impact on ARK yields. Should a large number of users stake ARK at the same time, yields would be reduced accordingly.
With ARK you should expect between 8 and 10% annual return.
Bean Cash staking is actually called “sprouting”.
Bean Cash promises 2,5% monthly yield, which compounds to over 34% a year.
Linda promises 70% annual yield.
Ranking 375 at CoinMarketCap you can probably guess the 70% is due to very low network difficulty.
Decred yield also depends heavily on network difficulty (as with most PoS systems).
At the time of this writing, Decred yielded 1,12% which compounds to 14% a year.
Excellent return for a top 30 market cap cryptocurrency.
Neblio’s current monthly yield is 0,8%
Yearly = 10%
Ranked 169 on CMC, not exactly a top performer in the passive income competition.
It is impossible to say how much OMG will yield.
Current OmiseGO staking calculators show 16% monthly yield.
This unreal number is likely to be the best case scenario, simulated for few current stakeholders and with no competition.
Once fully decentralized OmiseGO OMG reaches the exchanges, these figures should reach their correct values.
DASH currently yields approximately 0.5% per month and approximately 7% a year.
Excellent yield for a top 15 cryptocurrency. Although it has lower yield than others in this article, DASH has a significant user base and high liquidity.
NEO does not yield NEO coins directly, instead the staking rewards are paid in GAS.
Currently NEO yields 0,3% per month and 3,35% a year.
NEO is a top 20 crypto and has excellent liquidity and a significant user base, especially in China and generally in Asia.
PIVX currently yields 0.51% monthly and 6.55% annually.
It’s a top 100 cryptocurrency with an enthusiastic following. Liquidity might not be the highest around, but trading PIVX shouldn’t be too difficult either.
LISK currently yields 0.66% monthly and 7.89% annually.
It’s a top 50 crypto with a large user base. Good liquidity.
With OkCash you can expect around 4.97% monthly and 60% yearly.
Ranking at 766 on CoinMarketCap, OK is low liquidity and low network difficulty coin.
NAV currently yields 0.33% monthly and 4% annually.
Ranking at 235, this cryptocurrency offers low PoS yield with low competition. Not your best passive income solution.
One of the lowest yields among the currencies we’ve researched.
Currently at 0.12% monthly and 1.45% yearly returns.
A top 60 crypto, has good liquidity and a large user base. But the low yield may not make it the best bet for passive income.
RDD currently yields 5.1% annually and approx. 0.42% monthly.
Ethereum is still working on their PoS system. At the time of this writing it is impossible to estimate how much investors may expect from staking Ethereum.
Due to the high competition in this top ranked market cap crypto, expect numbers in the lower end of the spectrum.
A top 3 cryptocurrency, stay tuned to ETH’s website and other official channels for updates on when you can expect PoS to be deployed.
The lowest of all returns analyzed in this article.
NXT yields 0.03% monthly and 0.41% yearly.
Close to being a top 100 coin (ranking at 108 at this time), NXT has reasonable liquidity. Though, as you can see, it’s probably not going to be your choice for a passive income investment.
Yearly return = 8.77%
Monthly return = 0.68%
Ranking at over 450 at the time of this writing, Phore is not the top performer in the PoS arena.
Causes for Low Proof of Stake Earnings
Earlier this year we took a look at the proposed Cardano ADA stake rewards formula. Our article got ample circulation and generated much feedback on social media.
Part of the reason why our study got so much exposure was its negative outlook for Cardano ADA investors looking for passive crypto income.
Cardano ADA’s PoS system (as proposed in 2018 – remember, it’s a work in progress and may change) is based on block sizes and number of transactions. This makes sense. If you mint an ADA block you should get rewarded by the amount of data you had to process in exchange for the block reward. So far so good.
Problem is Cardano’s blocks are spaced at only very few seconds.
And, at the ADA network’s current throughput, blocks would be very tiny and contain very few transactions, if any. Thus, stakeholders would earn minimal rewards for block (Cardano calls them slots) solving.
Other causes for low PoS profitability are high competition and consequently high network difficulty.
Some coins, such as PeerCoin, have their yield hard coded into the currency’s algorithm. In such cases the coin is simply designed to be that way.
What to look out for?
High competition coins yield less but offer great liquidity.
For instance, we mentioned that you should expect low returns from the upcoming Ethereum PoS system. This is because Ethereum is very liquid and can be easily traded back and forth for U$ and Euros. That way, you can expect high network difficulty while staking Ethereum PoS.
Other coins we’ve looked at offer extremely high yields, but you should be careful about possible scams and low liquidity. Even if a coin yields hundreds of percent per year, you may not be able to cash it when needed.
As you can see, there’s a tradeoff between network difficulty and liquidity. High yields mean low difficulty but also low liquidity.
We hope this article has given you an ample panorama of the PoS status quo. Using this information you can pursue the best cryptocurrency investments to build that much dreamed constant flow of income at the end of the month.
PoS is much safer than centralized investment clubs and is usually fully automated, running from your own equipment. Most delegation systems do not put your funds at risk when you stake your coins, but simply indicate the coins are blocked for staking. This makes it a secure way to participate in decentralized profits without risking your money, unlike other high yield schemes which have caused immense losses for investors in the past.
Investors should perform due diligence before investing in unusually high yield cryptos.
Information contained in this article should not be taken as investment advice.
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Illustration: Profit by Nick Youngson CC BY-SA 3.0 Alpha Stock Images