How to Stake Polygon and Make Money While You Sleep
You may have noticed that recently more people are talking about staking crypto, and fewer people are talking about mining it. This is a shift that really got going as Ethereum switched to proof-of-stake near the end of 2022. Those aware of staking can stand to make some serious money without much work.
Many people who choose to stake crypto choose to stake Polygon. If you’re wondering how you can start MATIC staking and also start reaping the rewards, keep reading to find out!
Related: Crypto Staking: Easily Grow Your Crypto Holdings
What Is Polygon/MATIC?
Polygon is a Layer 2 solution on the Ethereum chain. This means it takes advantage of all of the benefits of Ethereum but does so on a less congested sidechain. This allows for faster transactions and lower costs.
MATIC is the cryptocurrency behind Polygon. People with MATIC can hold onto it as an investment, use it to pay Polygon fees, and stake it. People holding MATIC also have the ability to vote when it comes to the protocol’s operations.
In this way, Polygon and MATIC are pieces of a system. This system is then part of an even larger system, Ethereum.
What Is Polygon Staking?
Staking cryptocurrency, in general, involves setting aside some of your coins or tokens for a specific period of time. You can’t use them for this period, but staking them this way earns you rewards. The more coins or tokens you stake, the greater the rewards.
This is because of how proof-of-stake cryptocurrencies, like Ethereum, work. These currencies do not use mining to validate transactions and add new blocks to the chain. Instead, they rely on the staking process to do the same thing. This alternative method of running things allows the blockchain to run on far less energy. Without this process, the blockchain will not function correctly.
Validators vs. Delegators
Polygon staking specifically involves staking MATIC tokens. When doing this, users can either become validators themselves or become delegators.
You can become a validator by participating in the self-staking process. For this, you need a minimum of 1 MATIC. Then, you need to set up a node, which you can set up on your computer. Just make sure that you act according to the rules, as your tokens can be slashed if your validator node acts maliciously.
If you don’t want to run a node yourself, you can become a delegator instead of a validator. With this process, you don’t run a node but rely on a node run by someone else instead. You delegate your tokens to their node and earn a percentage of what they earn from your tokens. Again, you need to make sure you are going about this process correctly, as your tokens share the risk of the node you are delegating them to.
So becoming a validator takes more work and requires running programs on your computer. However, as a validator, you get to keep all the tokens you earn. Meanwhile, a delegator has to do very little work and just has to put forward an initial investment. However, a delegator only gets to keep part of the tokens earned through their investment. This gives both options some advantages and disadvantages.
Think of it like a business. You can run a business yourself and keep all of the money. Or, you could invest in a business and keep some of the proceeds. For different people, different options will be better.
Looking for a crypto wallet that gives you full access and control? Learn more about how Unbanked is changing the game when it comes to crypto and other financial investments.
How Much Money Can You Make By MATIC Staking?
Tokens granted through the staking process are not consistent. Some periods of time will feature greater rewards, while others will feature lesser ones. This largely depends on how many validators are out there.
Polygon has set aside 12% of its tokens for staking rewards. With 10 billion tokens in the supply, there are plenty of rewards out there. Currently, they offer a 4.95% APR.
However, to get the best data about how much you can make by staking MATIC, go right to the source. Polygon’s website features a calculator that will give you a good idea of how much money you can make by staking.
Related: 5 Best Crypto Staking Platforms of 2022
What Fees Are Involved With Staking?
When it comes to the fees involved with staking MATIC, you can rest easy knowing there aren’t any. This is one of the great things about this system. It is gasless and, thus, doesn’t charge gas fees.
The only fees come from transferring coins. However, since Polygon uses a system that is designed to avoid congestion and reduce fees, even these fees are not that large. Typically, they end up being under a dollar.
The only other times you will see fees relating to staking is if you use a staking platform. These platforms often charge a commission fee.
Positives and Negatives of Staking Polygon
The most obvious positive feature of staking Polygon is the opportunity to earn more crypto. This is essentially a way to earn money without having to do anything at all.
Besides this, there are a few other positives. By staking, you are helping Polygon as a whole. Doing so can potentially raise the value of MATIC, which raises the value of your holdings. On top of this, holding MATIC allows you to vote on issues related to the platform. So you can help guide it into an even brighter future.
Want to earn up to 6.38% in crypto rewards in an easy-to-use staking program? Sign up for UNBNK staking program today!
Meanwhile, the most obvious negative feature of staking Polygon is that it locks up your tokens. This means you won’t have access to them for a while. Typically, this shouldn’t be too much of an issue, as most people want to hold onto their investments for a while anyway. But, it can be annoying if the market becomes a bear market.
The other main negative comes from the potential penalties. When staking Polygon, you need to avoid making mistakes or acting maliciously. Otherwise, your tokens could be slashed.
Staking Polygon and Making Money
If you’re interested in making money by staking Polygon, now is a great time to get started. You can either start working as a validator or jump into life as a delegator. Either way, you will start bringing in the rewards of MATIC staking before you know it.
Related: Staking TERN: How to Earn Staking Rewards as a BlockCard Holder