The crypto sphere is a huge market, growing at a CAGR of more than 100% in 2024 compared to 2023. This sphere offers users several income opportunities. One of them, accessible even to beginners, is coin staking, particularly USDT.
In this article, we look at staking, its advantages and disadvantages, how it differs from other ways of passive income in cryptocurrency, how to make money on USDT, and what platforms can be considered for earning.
What Is USDT Staking
Staking is earning passive income from coins that run on the Proof-of-Stake algorithm. Unlike Proof-of-Work, on which Bitcoin runs, PoS does not require the user to have high computing power and solve math problems (mining).
Instead, the algorithm grants users who store cryptocurrency in their accounts the right to add new blocks to the blockchain.
Blocking a certain amount of coins in the account is called staking. In this case, the user receives passive income on cryptocurrency, which is calculated as a percentage of the blocked amount. The general principle of operation is similar to a bank deposit.
There are three types of staking:
- Fixed. Coins are blocked for a certain period, the duration of which cannot be changed once the process begins. As a rule, with such staking the percentage of income is higher than with perpetual.
- Flexible. The user can return access to coins at any time. Rewards are accrued with a certain regularity (once a day, week, month).
- DeFi or decentralized staking. Coins are lent by third parties at a certain percentage. The fulfillment of conditions is controlled through smart contracts. Such staking has a low entry threshold and often favorable interest rates. However, there is a risk of fraud.
Pros and Cons of USDT Staking
Staking stablecoins, including USDT (Tether), has several advantages:
- Passive income. Staking is an easy way to make money from cryptocurrency. It is a convenient opportunity to earn income from coins that are not planned to be used/sold in the near future.
- Guaranteed returns. Even if a small amount of coins is involved in staking, the owner steadily receives income from cryptocurrency. At the same time, there is an opportunity to find favorable conditions and high interest rates.
- Minimal volatility. Stablecoins, such as Tether, are secured by real assets (dollar). Fluctuations in their exchange rate are minimal. This eliminates the risk of losing money if the assets frozen in staking unexpectedly fall in value.
- Affordability. Staking has a low entry threshold. The user does not need in-depth technical knowledge, and the amount of coins involved can also be minimal — as low as $0.01.
- Airdrop bonuses. Many crypto projects additionally reward users who participate in staking. It is not uncommon to get large amounts in airdrops with hundreds and thousands of dollars.
- No additional costs for equipment. Staking USDT or other coins does not require high-powered computing equipment. This is how staking differs favorably from mining.
You should also consider the disadvantages associated with this method of earning money. They include:
- Lack of access to funds for the duration of their freezing. During staking, the coins are blocked. The owner cannot sell the assets or withdraw them from the account.
- Lack of insurance. Unlike a bank deposit, an exchange or wallet usually does not offer insurance during staking. If something happens to the platform (such as a major hack), there is no guarantee of a refund.
- In some cases, low returns. This is especially true for perpetual staking: in the absence of a fixed term, the rewards can be small.
Staking, Mining, Lending: What Are the Differences?
Staking, mining and lending are ways of generating income from cryptocurrency. With external similarities, they have several important differences.
- Staking is relevant for PoS algorithms. Its main purpose is to support the work of the blockchain by storing cryptocurrency: users who own the coin become validators of new blocks. Staking requires only the ownership of crypto assets.
- Mining is a tool of PoW algorithms. Computers use their computing power to solve mathematical problems, which forms new blocks. Participating in mining requires high-power machinery, and the process itself involves increased energy consumption.
- Lending is loaning cryptocurrency to other users at a certain interest rate. This can happen directly between users, through smart contracts or with the help of an intermediary exchange.
Staking Platforms
Three types of platforms can be used for USDT staking:
- Centralized. These are usually exchanges or specialized services. They aggregate deposits received from users and play the role of blockchain validators. Centralized services often offer lucrative interest rates, easy participation in staking, and insurance, but take away a portion of the fees as an intermediary fee. This is a good option for novice users as it does not require technical knowledge.
- Decentralized. Utilize smart contracts. A Web-3 wallet will be required for staking. Such platforms often offer more favorable conditions, which increases the profitability of USDT staking, but you should consider the risks: lack of insurance, possible unreliability of smart contracts.
- Cryptocurrency wallets. The most complicated option for beginners. Unlike specialized platforms, cryptocurrency wallets usually do not offer ready-made tools: you will need to figure out how to launch the node yourself. The advantage of this method is a higher level of security.
Services for USDT Staking
Deciding where to start USDT staking can be difficult. There are several services on the market that support this stablecoin. Let's take a closer look at a few popular options.
Binance
Binance is one of the leading crypto platforms in the world. Among other tools, it offers earning opportunities. These include USDT staking: Binance offers favorable interest rates and flexible terms. Both fixed and perpetual staking is available. There is a convenient yield calculator and various useful materials for beginners.
Kraken
Kraken is a crypto exchange that allows users to stake various currencies. The platform has a user-friendly interface, offers good rewards, and includes detailed materials for beginners. Users have access to flexible staking and asset freezing for a fixed period of time (from 3 to 30 days). In addition to centralized staking, there is a non-custodial option for advanced users.
Bybit
Bybit is another popular exchange in our selection. The service has a user-friendly interface and offers a wide selection of coins for staking to choose from including USDT, USDC, TUSD, and other stablecoins.
In addition to the standard percentages for fixed/perpetual USDT staking on Bybit, the exchange regularly launches special offers with increased rates for both new and experienced users. Airdrops available.
KuCoin
KuCoin is a cryptocurrency exchange whose features include making money from staking. The platform supports a wide range of different cryptocurrencies, fixed and open-ended options, convenient user statistics. The simple interface is user-friendly for beginners. In addition to staking, a number of additional tools are available for making money on cryptocurrency.
MEXC
MEXC crypto exchange offers USDT staking to its users in the savings section. Fixed periods (up to 30 days) and flexible staking with daily rewards are available. Ten coins are enough for USDT staking. There are convenient charts with reward fluctuations for the last 30 days, which allow you to calculate how much income USDT-staking will bring, what percentage you can get, and how high the risk of profit reduction is.
OKX
The OKX exchange offers several earning opportunities, including «Simple Earn», which has a low entry threshold, convenient for novice users. The platform's functionality includes structured products, onchain earnings, and other tools. Additional bonuses (10%) are accrued for newly registered users who start staking.
USDT Staking: How to Choose a Service?
Staking is a convenient way to earn money from cryptocurrency, suitable even for beginners. Nevertheless, it can be difficult to decide which platform offers the best USDT staking. Many centralized and decentralized services offer this option.
When choosing, it is important to consider the conditions, the terms of freezing funds, and the safety of the platform. It is recommended that you read the reviews of other users in advance and make an informed decision.
