Crypto trading is very profitable when you know what you are doing. Exchanging tokens like TLM to WAX can provide great returns but requires some good trading skills to be successful. However, the crypto ecosystem is incredibly versatile when it comes to making passive income out of it. Since the advent of the PoS model, there are hundreds of staking opportunities out there that provide decent yearly yields to token holders.
Consequently, you don’t have to get into risky positions all the time. Instead, buying some tokens and staking them can provide a steady stream of income, with very little risk involved. In this article, we talk about the growing Vechain (VET) ecosystem and its advantages in the current blockchain landscape. We will also explore VET staking and provide a quick guide on how to do this.
Understanding VeChain Staking
Before we go in-depth into Vechain staking, let’s start with some fundamentals of the VET cryptocurrency. In 2018, Sunny Lu, an expert in logistics and supply chain technology, created Vechain with the goal to improve this sector using blockchain.
Many theorized how blockchain can solve most of the supply chain’s pain points such as traceability, proof of origin, and counterfeit products. The Vechain ecosystem improves the logistics industry in every way imaginable, by allowing it to be automated, transparent, and more accessible for both suppliers and clients.
From a technological standpoint, experts often consider Vechain as one of the top blockchains on the markets. The network relies on 2 separate tokens — VET and VTHO. VET is the “smart money” of the platform and serves to exchange value over the network. VTHO, on the other hand, is required to pay for gas when using the blockchain, deploying dApps, or executing transactions.
And even though it offers staking, Vechain doesn’t work on a PoS consensus mechanism. Instead, it employs a proof-of-authority model that delegates the power for validating transactions to 101 masternodes. Users stake their coins and receive a passive yield in the form of tokens.
How to Do VET Staking?
In reality, there are two main ways of staking Vechain tokens. The first one is quite expensive and is often reserved for investment companies or institutional investors. It involves locking up a huge amount of VET tokens to prove the commitment of the validator to the network. This staking process is divided into four tiers:
- Strength, which requires 1 million VET (approx. $60.000)
- Thunder, which requires 5 million VET (approx $300.000)
- Mjolnir, which requires 15 million VET (approx $900.000)
- Authority node, which requires 25 million VET (approx. $1.500.000)
This method is often used by companies that wish to build their network on Vechain and benefit from owning a node. The reason behind this is that node owners receive between 1.45% and 1.83% APY, which provides them additional liquidity to develop on the network.
That said, there’s a much more democratic way of staking VET. In fact, anyone can do it, as long as you have a compatible VET wallet. You can download a mobile or a desktop version on the official website. In this scenario, you would be delegating your VET tokens to one of the master validators and receive around 1% APY.
More to Know About Vechain Staking
So, what’s not to love about Vechain staking? Well, this method of earning passive income through crypto does have its advantages and some drawbacks. The benefits are obvious:
- Easy way to get decent returns on investment, without having to worry about token prices.
- Vechain is a growing ecosystem that should gain additional momentum in the future.
- The network is adapting to the emerging DeFi space, adding NFTs and financial dApps to its ecosystem.
However, there are some serious disadvantages as well:
- Vechain is volatile and can lose value.
- You can’t sell your tokens while they are locked in the network.
- Competitors often offer much higher yields for staking coins.
All in all, Vechain staking is an interesting way to increase your holdings, with very little risk. However, if you are looking for crazy yields, you might look elsewhere.