The world has shifted to more deflationary economics in the past decade. The days of earning good interest from your bank savings account are gone. Nowadays you’re looking if you’re getting anything more than 1%.
Luckily with the recent surge in popularity of cryptocurrencies there are now several options to at least earn interest on certain crypto tokens. You might not have heard of it before, because often it’s referred to as “staking rewards” instead of interest. In this case, Algorand Staking.
In this article we will look at one of the easiest and most secure ways to earn interest on crypto – Algorand Staking. Algorand is a secure and fast crypto-currency with low transaction fees. It was originally founded in 2017 by MIT professor Silvio Micali, and is at the moment among the top 20 largest cryptocurrencies. The Algorand protocol offers the perfect balance between DeFi (decentralized finance) and CeFi (centralized finance).
How to Stake Algorand & Earn Interest on Crypto
Getting yearly returns on is very simple. The best way to do this is through the official Algorand Wallet application for your phone. We’ll run you through the process step-by-step in below.
Purchase Algorand from a large exchange (you can skip this step if you already own ALGO)
If you don’t already have a way to purchase cryptocurrencies, then start by creating an account on one of the larger and more trusted exchanges, such as Kraken.com, Binance.com or Coinbase.com. After you have created your account you need to add some FIAT currency (ex. USD, EUR, etc) to your account.
After that you can purchase Algorand ($ALGO) for EUR or USD. The current price of Algorand as of writing this article is around $1.7 per ALGO.
Download & set-up the official Algorand Wallet application on your phone
For iOS users head over to AppStore and download “Algorand Wallet”. For Android users visit the Google Playstore. Once you’ve downloaded it you need to set up the actual wallet. The application will offer you a 25-word keyphrase. It is essential that you write this key-phrase down, and never share it with anyone. Do not save it as a document on your computer or as a picture. The key-phrase is vital if you lose your phone or it breaks. You can’t store the Algorand on the phone. But actually on the Algorand protocol itself (think of it as “the cloud”). And the key-phrase can restore any account with its former value in case it by any reason becomes inaccessible.
Now that the key-phrase is saved the app will ask you to repeat a couple words from it. Additionally you can create a 6-number pin for it for secure quick access to the application. After that the set-up is complete and you can now access your wallet.
Transfers Algorand from the exchange to your wallet
At this point you need to copy the address of your Algorand Wallet. Press the small icon resembling a “QR-code” and copy the long address (long string of numbers and letters) to your clipboard. Use this same address to send your ALGO from the exchange you purchased them on previously.
The general transaction speed of Algorand is quick, a couple seconds at most. However the exchange needs time to process the transaction. In this case you can expect it to take up to 5 minutes until the transaction to your Algorand Wallet is complete.
You’re now earning interest on your Algorand
Yes you read that correctly – you don’t have to do anything else! Once the ALGOs are in your wallet you’re automatically earning interest (also known as staking reward). You can even see the interest amounting in real-time!
The current annual percentage yield (APY) is 4.77%, although this is expected to somewhat decrease in the upcoming year, and if you really want to get the most of your Algorand you should join the Algorand Governance Program. The governance program offers up to 20% APY.
Algorand Staking on exchanges
Another way of earning interest on your Algorand is to stake them directly through the large exchanges. For example one of the most well-known and reputable exchanges called Coinbase offers 4% APY without a locking period for Algorand. Nonetheless the drawback is that you’re losing out on .77% APY, although some might find it easier not having to worry about setting up a digital wallet and transactions.
Other exchanges offering Algorand staking include Kraken and Binance.
Conclusion
One of the easiest ways to earn interest on cryptocurrency is staking Algorand. You can stake it either through the official Algorand Wallet, or through the larger cryptocurrency exchanges. Instead of letting your hard-earned money devalue in your savings account with no return, then you can take some of it and let it grow 4% or more annually.
There are even other cryptocurrencies that you can stake. Even so, Algorand is one of the best options due to the low transaction fees and user-friendliness. In addition it’s a well-developed blockchain and a front-runner for contributing to upcoming CBDC (Central Bank Digital Currency) programs. Hence it’s a secure and easy way to earn interest on your crypto.