What is coin staking and how to do it: pros, cons, and interest on Binance

Hi! Have you ever heard the phrase "you can earn interest on your coins just by holding them"? We're talking about coin staking, which is one of the most popular methods among crypto investors these days.

Today we'll be using Coin staking: what it is, pros, cons, and how to do it on BinanceWe'll walk you through it all, especially the staking rankings to see which coins pay the highest interest, so stay tuned!

1. What is coin staking?

Coin staking is simply How to lock up cryptocurrency for a period of time and get rewarded for contributing to the operation of the network.It sounds like a bank deposit, but the difference is that it contributes to the stability and security of the blockchain.

Staking is primarily done on Proof-of-Stake (PoS) blockchains, where participants act as network validators and earn interest. For example, Tron (TRX) offers a high APY of 201 TP3T per year, while Ethereum (ETH) can yield around 41 TP3T.

2. Coin Staking Disadvantages and Advantages

Coin Staking Cons

• Lockup period: Staked coins cannot be bought or sold for a certain period of time.
• Market volatility: There is also a risk of losing your principal if the cryptocurrency price drops.
• Complex regulations: Different platforms have different terms and regulations, which can be confusing for beginners.

Coin staking advantages

• Generate passive income: Earn a steady stream of interest with little effort.
• Network contributions: Contribute to the security and stability of the blockchain.
• Possible price increasesYou can also expect the price of the coin to rise due to the decrease in circulation.

3. coin staking interest and ranking

Staking interest varies from coin to coin, and below is a ranking of annualized yields (APY) for major cryptocurrencies.

Coins like Tron and Polkadot are popular with high rates, as shown in the graph below.

4. Visualize your Python code

Below is a visualization of the data in the table above Python code. Running the code below will result in the visualization above.

import matplotlib.pyplot as plt
import numpy as np

# Set up data
cryptocurrencies = ['Tron', 'Polkadot', 'Cosmos', 'Avalanche']
apy_rates = [20, 11, 8.5, 5.5]

# Create bar graph
plt.figure(figsize=(12, 6))
bars = plt.bar(cryptocurrencies, apy_rates, color='skyblue', edgecolor='navy')
plt.title('Cryptocurrency Staking Annual Percentage Yield (APY)', fontsize=15)
plt.xlabel('Coin', fontsize=12)
plt.ylabel('Annual Yield (%)', fontsize=12)
plt.xticks(rotation=45)

# Display values above bars
for bar in bars:
    plt.text(bar.get_x() + bar.get_width()/2., bar.get_height(),
             f'{bar.get_height()}%', ha='center', va='bottom')

plt.show()

Code commentary

import matplotlib.pyplot as plt: matplotlib.pyplot module to the pltThis module is used to plot graphs.

import numpy as np: numpy module to the npThis module is used for array and numerical operations (not used in this code, but often used together when analyzing data).

cryptocurrencies = [...]: List of cryptocurrency names cryptocurrencies variable.

apy_rates = [...]: Get a list of annual percentage yields (APY) for the cryptocurrency in question. apy_rates variable, where each cryptocurrency and APY correspond to the same index location.

plt.figure(figsize=(12, 6)): Sets the size of the graph. figsize=(12, 6)produces a graph that is 12 inches wide and 6 inches tall.

bars = plt.bar(...): Generates a bar graph.

• cryptocurrenciesis the x-axis (cryptocurrency name)
• apy_ratesis the y-axis (APY)
• color='skyblue'sets the bar color to light blue.
• edgecolor='navy'sets the bar border color to navy blue.
• bars variable stores a list of the created bar objects.

plt.title(...): Sets the graph title. fontsizesets the font size.

plt.xlabel(...): Sets the x-axis label.

plt.ylabel(...): Sets the y-axis label.

plt.xticks(rotation=45): Rotate the x-axis labels (cryptocurrency names) by 45 degrees to display them. Prevents overlapping if the name is long.

for bar in bars:: A loop for each bar.

plt.text(...)Displays the value above the : bar.

• bar.get_x() + bar.get_width()/2.sets the x-coordinate of the text to the center of the bar.
• bar.get_height()sets the y-coordinate of the text to the height of the bar.
• f'{bar.get_height()}%'sets the text to display (adding the % symbol to the APY value).
• ha='center'will center the text horizontally.
• va='bottom'aligns the text vertically, with the bottom toward the bottom.

plt.show(): Displays the graph on the screen.

1. coinsand apy_rates Store the coin name and APY data in each list.
2. plt.barto create a bar graph.
3. plt.textabove each bar to show the APY value for better readability.

5. How to stake coins based on Binance

The process of staking coins on Binance is very simple:

1. Create and log in to your Binance account

• Go to the Binance homepage and create an account.

2. Select the Earn menu

• Click "Earn" → "Staking" in the top menu.

3. Select a product

• Search for the coin you want and choose between "Locked Staking" or "Defi Staking".

4. Set the duration and amount

• Enter the deposit period (30 days/60 days/90 days, etc.) and amount, then press the Confirm button.

5. Check your progress

• You can check your progress and estimated rewards in the "Wallet" → "Monetization" tab.

Finalize

Now that you've learned what coin staking is, how to do it, and more, it's time to start putting your cryptocurrency to work instead of just holding it.

By the way, the king of coins is Bitcoin, right? Bitcoin's first price of $0.003, the myth of digital gold debunked with R Check out the post to read the Bitcoin story!

# Glossary

• Annual Percentage Yield (APY)Interest rate calculated on an annualized compounded basis.
• Proof of Stake (PoS)Algorithms that participate in network validation in a proof-of-stake fashion.
• Lock-upTying up assets for a period of time.
• Decentralized Finance (Defi): Decentralized financial systems.