Staking on an exchange is the easiest way to earn passive income with crypto. You simply select a token, click “Stake,” and start earning rewards. The exchange handles all the technical complexity. This guide explains how exchange staking works and what to watch out for.
How It Works
When you stake on an exchange like Mal.io, Coinbase, or Binance:
- You select a stakeable token (ETH, SOL, ADA, DOT, etc.)
- You choose the amount to stake
- The exchange delegates your tokens to validators on the blockchain
- You earn staking rewards, distributed periodically (daily, weekly, or monthly)
- The exchange takes a small commission (typically 10-25% of rewards)
Typical Staking Rewards
| Token | Approximate APY |
|---|---|
| Ethereum (ETH) | 3-4% |
| Solana (SOL) | 6-7% |
| Cardano (ADA) | 3-4% |
| Polkadot (DOT) | 10-14% |
| Cosmos (ATOM) | 15-18% |
| Avalanche (AVAX) | 8-10% |
Locked vs Flexible Staking
Flexible staking: You can unstake anytime. Lower rewards but more liquidity. Good for beginners.
Locked staking: Your tokens are locked for a set period (30, 60, 90 days). Higher rewards but you can’t sell during the lock period. Only use if you’re confident you won’t need the funds.
Risks
- Price risk: You earn 5% in staking rewards, but if the token drops 30%, you’re still net negative
- Exchange risk: Your tokens are on the exchange. If the exchange fails (like FTX), you could lose everything
- Lock-up risk: During locked staking, you can’t sell during crashes
- Slashing: Rare, but if the validator misbehaves, a portion of staked tokens can be destroyed
Best Practices
- Only stake tokens you plan to hold long-term anyway
- Use flexible staking if you’re unsure about lock-ups
- Don’t stake your entire portfolio — keep some liquid
- Compare rates across exchanges — they vary
- Consider the exchange’s commission rate
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