In eToro, staking is a way for cryptocurrency holders to receive rewards just for holding the crypto assets they own. eToro takes care of the staking process on their behalf. In this article, we learn more about staking and how traders can use it to their advantage. Once your done reading, we recommend that you also check out our comprehensive evaluation so you will know more about the full features of eToro.
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What is Staking?
Derived from the PoS mechanism (Proof-of-Stake), Staking is a concept in trading that reward traders for holding on for a specific crypto coin. It involves the process of committing crypto assets to confirm transactions and support a blockchain network. It is only doable with cryptocurrencies that utilize proof-of-stake models.
The blockchain mining network uses this mechanism to allow miners to validate, mine, and block transactions based on how many crypto coins they own. Simply put, the more coins you own, the more mining power you hold.
Can You Stake Bitcoin?
No. Because Staking is only made possible on crypto assets that uses the PoS (Proof-of-Stake) mechanism, you cannot stake Bitcoin since it applies a PoW (Proof-of-Work) mechanism.
Cryptos Using Proof-of-Stake
As mentioned, cryptos that confirms transactions via a proof of stake are the only ones of their kind that offer staking. Here are some examples of major cryptocurrencies available for staking:
- Ethereum (ETH): As the first crypto with a programmable blockchain network to build other apps, ETH was first developed using proof of work but has since transitioned to using a proof-of-stake concept.
- Solana (SOL): This is another crypto that uses proof-of-stake known for its scalability and low fees.
- Cardano (ADA): Aside from offering staking, ADA is also known as an eco-friendly crypto because of its self-executing contracts that requires a lesser amount of energy.
- Polkadot (DOT): This crypto has a protocol that permits varying blockchains to work and connect with each other.
- Tron (TRX): Tron's native currency TRX is known for its low fees and fast transactions. Its blockchain features smart contracts features that allows the development of decentralized applications and tokens.
- EOS: With tokens native to its own blockchain, EOS also allows staking. As of 2021, the average return for EOS staking is 3.1%
- Cosmos (ATOM): This crypto is also known as the "internet of blockchains" since it aims to bond together different blockchains to allow one to process transactions with each other.
What Are the Cryptos That Allows Staking in eToro?
Currently, eToro supports only two cryptos: Tron (TRX) and Cardano (ADA). A third crypto, ETH 2.0 was included after February 1, 2022 to all US and UK users of eToro.
Good news though, eToro is planning to support more cryptocurrencies for staking soon.
Who is Eligible for Staking?
Participation in staking is generally open to anyone. However, to maximize potential in staking requires a substantial investment. For example, with ETH, you will be required a minimum investment of 32 ETH. This plus a wide technical knowledge, and a powerful computer that can perform numerous validations 24 hours and 7 days a week.
How to Begin Crypto Staking?
Staking is initiated by purchasing and owning one or more of the supported crypto assets, and then holding the open position of the staked crypto asset for a given length of time.
Each cryptocurrency requires a particular period before it becomes eligible for staking, as dictated by its blockchain, and depending on when it is included in the staking pool.
Cardano (ADA) Staking in eToro
The reward percentage per level of the monthly staking yield for Cardano (ADA) in eToro is at 75% for Bronze members and all US users, 85% for Silver, Gold, and Platinum Club members and 90% for Diamond and Platinum Plus Club members.
Staking rewards starts on the 10th day of holding following a period of 9 intro staking days.
Tron (TRX) Staking in eToro
The reward percentage per level of the monthly staking yield for Tron (TRX) in eToro is at 75% for Bronze members and all US users, 85% for Silver, Gold, and Platinum Club members and 90% for Diamond and Platinum Plus Club members.
Staking rewards starts on the 8th day of holding following a period of 7 intro staking days.
Ethereum (ETH) Staking in eToro
The reward percentage per level of the monthly staking yield for Ethereum (ETH) in eToro is at 75% for Bronze members and all US users, 85% for Silver, Gold, and Platinum Club members and 90% for Diamond and Platinum Plus Club members.
ETH 2.0 staking is available for the following countries:
Andorra, Arab Argentina, Australia, Austria, Azerbaijan, Bahrain, Belgium, Bolivia, Brazil, Bulgaria, Cayman Chile, Colombia, Croatia, Cyprus, Czech Denmark, Dominican Ecuador, Emirates, Finland, Georgia, Gibraltar, Greece, Guernsey, Hungary, Iceland, Ireland, Island, Islands, Isle Israel, Italy, Jersey Kazakhstan, Kenya, Kingdom, Korea, Kuwait, Latvia, Liechtenstein, Lithuania, Luxembourg, Malaysia, Malta, Man, Mexico, Monaco, Norway, Of Oman, Peru, Philippines, Poland, Portugal, Republic, Romania, Slovakia, Slovenia, South Spain, Sweden, Switzerland, Taiwan, Thailand, Ukraine, United Uruguay, and Vietnam.
How Much Is the Average Staking Rates?
Since the main goal for staking is to get additional cryptos, you will depend on interest rates that can be quite substantial. You can sometimes achieve more than 10% or 20% per year.
How Is the Monthly Staking Yield Is Computed?
In calculating the monthly yield for each supported cryptos, eToro follows this sample formula.
In the month of November, 600,000 ADA coins were received as staking reward on eToro.
During the same month, the daily average of ADA kept by staking users totaled 11,000,000 ADA coins.
Hence, the computation would be 600,000 divided by 11,000,000 for a monthly yield of 0.54%.
How Do You Compute the Staking Percentage?
Computing staking percentage is a very complex process. The best way is to use various Staking calculators online. But on a nutshell, the basic formula is as follows:
For example, you are staking Cardano (ADA) with 7% per year of 100. The formula would be: 100 x 7% = 7 (You will earn 7 ADA a year if you have 100 ADA)
How Does eToro Compute the Staking Reward?
eToro computes the staking reward in this order:
- Calculate the number of eligible days for the month by deducting the intro days from the total days between the open position and close position date.
- Compute the average daily position using this formula: (Staked amount) x (number of eligible day) / (number of days in the month)
- Compute the final staking reward by using this formula: (Average daily position) x (monthly yield) x (revenue share) = Total Units x (monthly staking yield et. al 75% if Bronze member, 85% if Silver, Gold members and so on)
Is Staking Cryptos in eToro Safe?
eToro's staking is guaranteed safe. The staked crypto assets instantly become the property of eToro's users. eToro meanwhile, gains the trust of eToro's users by executing the entire staking procedure on their behalf, in a safe, effective and secured manner.
How to Stop Receiving Staking Rewards?
If you prefer to opt out from the staking rewards on your eToro trading platform, simply submit a request to stop staking rewards by going to this link: etoro.com/crypto/staking
When Will I Start Receiving My Staking Reward?
Staking rewards are automatically given inside 14 days of the following month. You will regularly get a monthly email from eToro regarding your staking earnings and this includes a table for your rewards.
Benefits of Staking Crypto Assets
Staking wouldn't become a hit among traders and investors without these benefits:
- Staking is more environment-friendly as compared to the energy-consuming crypto mining.
- Staking gives you another passive income avenue through the interests from your crypto holdings.
- By staking, you help in the improvement of security and maintaining the efficiency of the crypto's blockchain network.
- Staking requires no additional equipment like a powerful computer as compared to crypto mining.
Risk of Crypto Staking
As a result of staking, your cryptocurrency is often locked up for a period of time, where it can't be transferred. This can be a drawback since you cannot trade staked tokens during this time, regardless of price changes.
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