5 Best Places to Stake Dogecoin in 2022
Dogecoin is not proof-of-stake technology, so how can you stake it?
Dogecoin is a cryptocurrency similar to Bitcoin that uses the PoW (proof of work) consensus mechanism to validate transactions on the blockchain. You cannot stake Dogecoin in the traditional decentralized way, as it does not use the proof-of-stake consensus mechanism like other popular cryptocurrencies, such as Ethereum or BNB.
However, you can smoothly stake your Dogecoin tokens and generate yield rewards by depositing them on a centralized exchange that offers this option.
Other methods of staking Dogecoins include bridging your tokens to the Ethereum or BNB blockchain (you get the so-called wrapped tokens), using Defi liquidity mining protocols, lending pools, etc.
One of the most popular methods of staking Dogecoin is to use a process called soft staking, which means staking the tokens on a centralized exchange, such as Binance or Kucoin, without locking them up (you can stake and trade them simultaneously) .
Unlike mining, where miners use computer power to validate transactions and generate rewards, staking involves users pledging capital to help secure the network. The Dogecoin Foundation announced in 2022 that it intended to move Dogecoin to proof-of-stake technology in the near future, which will increase the speed and eventually adoption of the cryptocurrency.
Best Places to Stake Dogecoin – Centralized Platforms
You can stake Dogecoins and earn rewards on Binance using three main categories of investment products as follows:
Protected (estimated 10% APR).
High yield (1%-44%) – Liquidity mining pools with DOGE/BTC, DOGE/USDT and Dual Investment with up to 84%.
Portfolio Auto-Invest (0.50% – 1.00%) – Users can earn passive income from Dogecoins and claim daily rewards.
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The Kucoin platform offers several earning features for Dogecoin owners, including lending on the Doge Funding Marketplace for an average daily interest rate of 0.02% at the time of writing.
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YouHodler is a cryptocurrency exchange platform with a “Doge Savings Account” program, with a 3%+ APR and compound interest earnings that encourage users to hold Doge for the long term.
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DeFi platforms are another way to earn a passing income from your Dogecoin tokens by participating in liquidity mining pools, also known as pooling. You will need to link your native Dogecoin tokens to the network specific to each DAPP that enables this functionality.
Users who participate in these liquidity mining pools expose their tokens to impermanent loss, and they can potentially lose more than they earn through yield farm rewards. Here are some of the most popular Dogecoin compatible automated Defi protocols available in the market:
Pancakeswap (on the BNB channel)
Users can earn up to 9.17% APR on Doge-BNB.
Uniswap – (on ETH)
Uniswap supports pool mining using the Wrapped DogeCoin (WDOGE) token on the Ethereum blockchain.
Visit Uniswap now
Thorswap (on decentralized liquidity network Thorchain, Avalanche, ETH and m)
Thorswap is a multi-chain dex powered by Thorchain. It comes with a cool feature that allows users to trade multiple native token chains such as Doge, Bitcoin, or LTC for hundreds of other ERC-20 tokens and cryptocurrencies. DOGE-RUNE and other leading liquidity pools can be found on the liquidity statistics website thoryield.com.
How is Dogecoin mined?
Dogecoin is a proof-of-work cryptocurrency mined like other PoW-based coins, such as bitcoin or litecoin. The mining process involves the use of computing power to compete in solving mathematical problems for Dogecoin rewards. Mining difficulty increases over time, forcing miners to improve their hash rate in order to keep up.
Although Dogecoin can be mined using a basic CPU or GPU card, due to the high difficulty achieved and increased electricity costs, it is not possible to make a profit than by mining Dogecoin with a powerful computer machine known as an ASIC miner.
A machine ASIC is an integrated circuit chip customized for a specific use rather than a general purpose like CPU or GPU.
How much money can I make by staking Dogecoin?
Decentralized high-yield liquidity pools offer better returns, while centralized exchanges such as Binance.com involve less risk and have a lower APR. You can earn anywhere from 1% to 85% APR on Dogecoin, depending on the type of cryptocurrency platform you use to stake your Dogecoin coins.
Some of the best Doge staking platforms available in the market are Binance, Kucoin, YouHodler and decentralized platforms such as UniSwap, PancakeSwap or the multi-chain swap Thorswap.
Yes. Binance.com offers several plans and options for staking Dogecoins. However, their staking process is not on-chain, since Dogecoin is not (yet) a proof-of-stake token.
Yes. Staking cryptocurrency coins also involves market risks. Whether these risks are low or high is debatable, with some users in the crypto community claiming that staking is a low-risk and profitable strategy, while Forbes.com describes it as having a high risk of losses.
Yes. Apart from the market and other risks associated with this form of investment, some platforms also require a lock-up period of 1 day to 2 years or more, which can prevent investors from accessing tokens if they need more. early.
It depends on your goals and the platform used for staking. Ethereum allows users to claim their staking rewards after 6.5 minutes, while Cardano requires five days. On average, investor claims staking rewards once a week.
You can bet Doge on centralized cryptocurrency exchanges (such as Binance or Kucoin), decentralized applications (Defi applications such as UniSwap or PancakeSwap), non-custodial wallets (Exodus) and many more.
The Robinhood platform does not accept staking of Dogecoin or other cryptocurrencies.
Yes, the Dogecoin Foundation has announced its intention to adopt proof-of-stake technology in the future.
Trust Wallet users cannot use the built-in functionality to stack native Dogecoin directly on the wallet. However, you can use the wallet browser feature to interact with Defi protocols like UniSwap, after linking your Doge to Ethereum or other blockchains.
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