How Does Crypto Staking Work?

If you’re looking for a way to earn passive income in crypto, one of the most accessible and popular methods is to stake crypto. This process involves locking your digital assets in a blockchain to help validate transactions and secure the network. In return, you earn rewards.

Most blockchains that use the Proof-of-Stake (PoS) mechanism rely on participants who stake crypto to maintain their operations. Unlike mining, staking requires no expensive hardware or excessive energy use. It’s open to everyone — whether you’re using a DeFi wallet or centralized exchange.

Rewards vary by project and platform. Some allow flexible withdrawal, while others lock your coins for a set period. In all cases, staking contributes to network security while letting you earn yields on idle funds. That’s why many investors consider it one of the best ways to grow holdings without trading.

Is Crypto Staking Taxable?

Yes. In most countries, staking rewards are taxable income. When you stake crypto and receive tokens as a reward, their value at the time you gain control is what you report for tax purposes. Later, if you sell or exchange those rewards, capital gains tax may apply.

Tracking every reward manually can be time-consuming, especially when using multiple wallets or platforms. Tools like CoinLedger, Koinly, and TurboTax automate this process. They calculate reward values, generate reports, and help you comply with local regulations.

Always keep records of what you earn and when — it’s part of responsible crypto staking.

Top 5 Best Cryptos to Stake in 2025

REALMAN

REALMAN is more than just a meme token — it’s a DeFi ecosystem focused on crypto stake education. Its unique model blends high-yield staking with hands-on learning. Users join practice modules where they learn how staking, farming, and liquidity tools work in real time.

REALMAN transforms passive staking into active skill-building. You earn rewards for locking tokens while gaining real-world DeFi knowledge. NFT badges, tiers, and token incentives motivate users to continue exploring the platform.

If you want a project that combines rewards with education, REALMAN is a standout option for those who want to stake crypto and grow their expertise at the same time.

Ethereum (ETH)

Ethereum remains one of the most reliable options for staking. With the move to PoS, ETH holders can now lock their assets and receive up to 4.3% APY in return. It’s a low-risk way to stake crypto on a trusted and widely used network.

Validators need 32 ETH, but smaller investors can use platforms like Lido or Coinbase to join pools. The network’s utility, from smart contracts to DeFi apps, adds confidence for long-term holders.

For steady income and a strong technical foundation, ETH is among the best cryptos to stake today.

Cardano (ADA)

Cardano offers a flexible and secure way to earn. It allows users to delegate ADA to a stake pool with no lock-up period. Earnings are distributed every five days and range from 3–5% APY.

Thanks to its scientific development and eco-friendly protocol, Cardano is popular among investors who want to stake crypto without giving up control of their funds. With widespread adoption and consistent returns, ADA is a go-to option for staking beginners.

Bitcoin Minetrix (BTCMTX)

Bitcoin Minetrix changes the game by allowing users to stake crypto to earn Bitcoin — without mining equipment. By staking BTCMTX on Ethereum, users generate credits that can be used for cloud-based Bitcoin mining.

Offering APYs over 500%, this is one of the highest-yielding options. It's fully transparent thanks to smart contracts, giving users control over their deposits.

If you want to earn BTC passively and are comfortable with high reward volatility, BTCMTX is a promising choice in 2025.

Meme Kombat (MK)

Meme Kombat blends entertainment and rewards. It’s a battle-themed meme coin that uses AI to simulate fights between characters. Users can stake crypto to participate and earn APYs up to 112%.

While fun and rewarding, MK is more volatile than traditional tokens. However, if you enjoy high-risk, high-reward staking with a creative twist, Meme Kombat could be worth exploring.

5 Best Crypto Staking Platforms

Coinbase

• Assets: ETH, ADA, and more
• APY: 1% to 13%

Coinbase makes it simple to stake crypto. It supports major tokens and provides easy-to-read dashboards that show your earnings. You don’t need to lock funds for long periods, which adds flexibility.

Binance

• Assets: Wide variety including BNB, AVAX
• APY: Up to 30%

Binance offers both flexible and locked staking, plus savings and liquidity farming. You can start staking with just a few clicks and access high-yield offers through special events.

Its large user base and diverse options make Binance a top platform to stake crypto globally.

KuCoin

• Assets: 40+ including ADA, KSM
• APY: 1% to 16%

KuCoin offers soft and fixed staking with minimal requirements. You can stake directly or use its Earn features for extra benefits. It’s perfect for users who want to diversify their crypto stake approach.

Crypto.com

• Assets: CRO, ETH, BTC
• APY: 1% to 14%

Crypto.com rewards users who hold CRO tokens with boosted staking returns. The app is beginner-friendly, and staking integrates with services like crypto debit cards and cashback offers.

Kraken

• Assets: ETH, SOL, DOT
• APY: 1% to 13%

Kraken supports both on-chain and off-chain staking. It allows flexible entry and exit, transparent reporting, and institutional-grade security. Great for those who want to stake crypto safely and effectively.

Maximize Your Earnings with the Best Cryptos to Stake

Staking has become a leading strategy for passive income. Whether you're locking ETH or joining a newer DeFi project like REALMAN, the chance to stake crypto offers both financial and ecosystem-level benefits.

The key is choosing the right platform, understanding risks, and keeping track of your rewards. By staking smart, you grow your holdings while supporting decentralized networks.

Explore projects with real-world value, check APYs, and be sure to monitor lock-up terms. With the right choices, your crypto stake can become a stable and rewarding investment.

FAQs about Crypto Staking

Which platform can I use to report crypto staking taxes? Use tools like CoinLedger, TurboTax, or Koinly for easy tax tracking and filing.

What is the risk of staking cryptos? Risks include price volatility, lock-up restrictions, and penalties if validators act incorrectly.

When should you not stake crypto? Avoid staking when coins are dropping fast, or if you’ll need liquidity soon. Always research token and platform reliability before committing.