Blockchain investors are increasingly gravitating toward staking as a passive income channel.
The KAVA blockchain has seen increased demand from staking investors since its launch and in this guide,
In this article, we’ll discuss why that is the case, why you might want to start staking KAVA, where and how to stake.
Why is Kava staking so high?
Kava (KAVA) is a cross-chain decentralized finance (DeFi) lending platform that uses proof of stake (PoS) consensus mechanism.
It introduces a highly innovative way of accessing credit in a decentralized way.
With Kava, all you need to get a crypto loan is some collateral. Deposit that into a supported wallet, connect it to the Kava dApp and receive your loan.
Investors are incentivized to provide liquidity within the Kava ecosystem ensuring that borrowers have enough assets to borrow at fair rates.
The KAVA token has grown in value since the launch of the project. There is outsized demand for staking services on the KAVA blockchain for a few reasons. These include:
Simplicity: For blockchain investors who want to stake coins for rewards, KAVA makes it easy and almost effortless to do so. Later in this article, we will show you how to start staking your KAVA tokens.
Accessibility: It’s easy to start staking KAVA because there is an increasing number of staking services that now support the coin. The most popular ones are Binance and Huobi, two of the largest crypto exchanges.
High returns: The project offers a relatively higher ROI for staked tokens compared to other projects. Currently, stakeholders can expect to receive an annualized nominal yield rate of 8.39%. That is almost double what current Ethereum2 stakeholders get.
Relative liquidity: One of the biggest drawbacks of staking coins or tokens is that these assets are locked for extended periods exposing investors to multiple risks including the risk of liquidity.
For Kava, the lock period is 21 days, which is relatively shorter compared to other platforms such as Ethereum 2.0 with infinite lock periods.
Learn more: Staking Crypto Vs Airdrop (Guide)
What kind of token is kava?
KAVA is the native cryptocurrency asset for the Kava Chain protocol and, given that KAVA is an independent blockchain network, its native asset is a coin.
KAVA coin can be staked for rewards or used as a governance token for voting on proposals within the Kava ecosystem.
Is Kava worth staking?
Staking Kava has several benefits. Here are some reasons why most investors stake KAVA:
Return on investment: KAVA Chain offers a higher nominal annual yield return compared to other blockchains making it a more profitable endeavor.
Ease of staking: To start staking all you need is a wallet that supports staking or sign up to one of the popular staking services such as Binance or Huobi.
Eco-friendliness: This is more of a benefit accrued from the use of staking in general as opposed to using mining. Since KAVA uses PoS staking, the network consumes less energy, making it more eco-friendly.
Governance: KAVA stakeholders have the right to vote on the project’s development through their assets.
Looking for another coin to stake? Zilliqa is a great option for staking.
What exchanges sell KAVA?
KAVA token is easily accessible on some of the biggest crypto exchanges including:
- Huobi Global
CoinMarketCap has a comprehensive list of the exchanges that list Kava.
How to buy Kava coins in the USA?
There are very few exchanges in the United States that support KAVA. One of these trading platforms is Kraken.
To buy KAVA in the US through Kraken, follow these four simple steps:
- Sign up for an account with Kraken crypto exchange;
- Verify your identity;
- Add payment method (Kraken supports multiple payment methods including bank transfers, credit/debit cards, or even crypto deposits);
- Buy KAVA.
You can also opt to use decentralized exchanges such as UniSwap, however, we can’t recommend using this option because it is complex and transaction fees on the Ethereum network are very high. It can cost you $100 to perform a $50 transaction.
How to stake Kava?
There are three ways to stake KAVA coins:
- Stake KAVA through staking services such as crypto exchanges. The most popular options are Binance, Huobi Global, and BitMax.
- Stake Kava through crypto wallets such as Trust Wallet, Cosmostation, and Ledger hardware wallet.
- Run a KAVA staking node.
The last option is extremely complicated and can only be recommended to experienced technical stakeholders. However, running a staking node entitles the operator to 100% of the rewards.
The simplest of the three methods stated above is using a staking service. The service will typically charge a commission that varies from service to service.
Alternative coins to stake
Solana (SOL): A scalable and user-friendly smart contract platform with more than three-quarters of outstanding tokens locked for staking. Stakeholders receive about 5.8% in annual rewards.
Also read: 8 Best Mining Pools For Solana
Cardano (ADA): Another smart contract platform with a current market cap of more than $40 Billion. Has 70% of outstanding tokens being staked at an annual reward rate of 5.1%.
Ethereum 2.0 (ETH2) The leading smart contract platform currently undergoing a network upgrade from mining to staking. The staking feature was enabled in December 2020 and is being rolled out in phases. The current reward rate for staking is 4.9% and the more coins being staked, the lower the reward rate.
Staking KAVA could be a lucrative way of generating passive income. Hopefully, you have learned a few facts about the project, why crypto investors are looking into staking it and how you can too.
Always conduct thorough research before investing in any project to avoid losing your funds.