ChatGPT picks top 3 cryptocurrencies to stake for passive income

Staking cryptocurrencies can be done in different ways, using different networks, and for different goals. However, they all have one thing in common: Staking tokens will recurrently reward their holders for a proportional share of each of their stakes on the network or application.

This happens because investors trade their liquidity — by locking their tokens under specific rules set by the protocol they are staking at — for the right to directly participate in the system, which can be as validators of a Proof of Stake (PoS) consensus, a protocol’s governance or even by providing liquidity to a decentralized exchange, a lending platform, or to a collateralized asset. Moreover, liquidity has a cost, that is translated into the so-called ‘passive income’.

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Ethereum (ETH) staking stats. Source: StakingRewards.com

Notably, there is a total of $44.57 billion staked on Ethereum at the time of publication, which equals 22.15% of ETH’s market cap of $200.74 billion. In the last 24 hours, there was a surge of close to 14% in the amount of staked tokens in the network.

Tezos (XTZ)

“Tezos is a blockchain platform that uses a PoS consensus mechanism. XTZ holders can stake their tokens and participate in the network’s governance while earning staking rewards. Tezos is known for its on-chain governance and the ability for token holders to vote on protocol upgrades.”

By staking XTZ, investors are expected to earn a yearly rate of 5.18% over the staked amount, in the current state of the network. Nevertheless, the ‘real reward rate’ calculated by StakingRewards.com shows that the yield is actually 0.92% after discounting the token inflation.

Tezos (XTZ) staking stats. Source: StakingRewards.com

Meanwhile, Tezos holders have been unstaking their tokens by 17.17% in the last 24 hours. It is also important to note that despite having a market cap of $644.87 million by press time, 71.79% of that accrues for staked XTZ, for a total staked value of $476.16 million.

Cardano (ADA)

“Cardano is another popular cryptocurrency that uses a PoS consensus mechanism. ADA holders can stake their tokens in the Cardano network and participate in the process of block validation and creation. Staking ADA allows participants to earn rewards.”

As of October 7, the Cardano network is rewarding close to 3% per year to its stakers, also according to StakingRewards.com data gathered by Finbold. This represents the lower yield among these three picks by ChatGPT-4, which gets even lower when adjusted with ADA’s token inflation, for an expected reward of 0.39% in the long run.

Cardano (ADA) staking stats. Source: StakingRewards.com

With a staking market cap of $6.08 billion in ADA, Cardano stakeholders represent a share of 63.32% of the total market cap for its native token. At the time of publication, the staking trend is also negative, like Tezos, with a 12.9% outflow.

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.