Best Proof of Stake Coins 2020 for Easy Passive Income
in Staking, Tezos (XTZ), Dash (DASH), Tron (TRX), NEO (NEO), Cosmos (ATOM), VeChain (VET), Ontology (ONT), Passive Income
It’s said that the average millionaire has 7 streams of income.
What if you could create 7 new streams of income today:
- Without having to get another job
- Without having to start a business
- Without managing a property
- Without researching stocks
- Without writing a book
- Without making a loan to someone
- … and from the comfort of your home?
That’s pretty much everyone’s dream.
Thanks to new innovations in the cryptocurrency space, namely the rise of staking, this is already a reality for some crypto investors.
Staking is the process by which crypto investors stake, or lock up as collateral, crypto assets in order to help secure blockchain networks by periodically validating transactions. For their contributions to the network, stakers are periodically paid in newly minted crypto assets and/or transaction fees.
In many cases, staking requires minimal setup or technical know-how, as opposed to mining, another form of securing blockchain networks that is usually very technical and requires physical equipment.
In this post, we’ll tell you what a proof of stake coin is as well as the best proof of stake coins so you can kick back and have that easy passive income start rolling in!
What is a Proof of Stake Coin?
A proof of stake (PoS) coin is a crypto asset that uses staking as its transaction validation mechanism. The opposite would be a proof of work (PoW) coin, which uses mining as its transaction validation mechanism. For more information on the difference between PoS and PoW, check our Proof of Work vs. Proof of Stake article.
Tezos (XTZ): ~6% Yearly Interest
The first in our list of the best PoS coins is Tezos, a blockchain platform similar to Ethereum. Tezos is widely known for having one of the biggest ICOs of all time, with investors investing nearly $232 million in XTZ tokens.
Tezos differentiates itself by focusing on fixing governance issues that plague the likes of Bitcoin and Ethereum.
Bitcoin and Ethereum don’t have formalized governance processes to make decisions on things like network upgrades. This has led to splits, or forks, over disagreements about a blockchain’s development. One famous example is Bitcoin vs. Bitcoin Cash.
Tezos, on the other hand, allows stakeholders to vote for network changes. The Tezos blockchain records stakeholder votes on the blockchain for all to see. Moreover, after network changes receive enough votes from stakeholders, the Tezos network automatically implements the changes.
While Tezos got off to a rocky start, its troubled times seem to be in the past. In May 2019, Tezos finally saw the implementation of its on-chain governance in action. Since then, the price of Tezos has been skyrocketing.
It’s not only governance that Tezos stakeholders get to take part in but staking rewards, too. Tezos pays stakeholders ~6% interest in XTZ a year (check MyTezosBaker for the latest rate).
DASH (DASH): ~6.5% Yearly Interest
Dash is another proof of stake coin that focuses on quick and private transactions. It also pushes for widespread adoption, which has definitely paid off. As of the end of 2019, you can spend Dash at thousands of locations.
Dash also popularized masternodes, which are like the miners who confirm transactions on networks like Bitcoin. But mining can require lots of technical knowledge in order to operate mining equipment. For Dash masternodes, you only need you to lock up (stake) some Dash as collateral.
If you run a Dash masternode, you provide Dash services like instant transactions, private transactions, and governance. For your contributions, the network pays you in Dash at ~6.5% a year (check Staking Rewards for the latest rate).
Tron (TRX): ~4% Yearly Interest
Tron (TRX) is another popular way to earn passive staking income. While Tron's founder, Justin Sun, is a controversial figure due to his tendency to over-hype Tron, Tron has recently shown its potential with:
- Growth in Tron Dapps (decentralized applications)
- Tron’s purchase of BitTorrent (perhaps the largest decentralized protocol in the world, accounting for nearly 30% of all Internet traffic)
- Sun’s partial ownership of Poloniex (an early crypto exchange)
- and Tron’s purchase of Steemit (the biggest blockchain social network).
No matter what you think of Tron and Justin Sun, Tron’s influence only continues to grow. As a result, earning TRX passive income might be a great way to benefit from Tron’s growth. To get started, follow this guide on how to stake TRX. Staking Rewards will tell you the latest TRX staking rewards rate.
Another way to benefit from Tron’s passive income is to store your Tron in a Tron wallet that supports BitTorrent Token (BTT) airdrops (free distributions of crypto). Perhaps in a bid to increase TRX usage, Tron will airdrop free BTT to TRX holders until February 2025.
NEO (NEO): ~2% Yearly Interest
Though NEO doesn’t pay as much as other proof of stake coins, it still beats many OldFi (Old Finance) investments.
Staking Rewards lists NEO staking rewards at 2% a year as of writing. For comparison, short-term US Treasury bills (US government debt), usually considered some of the safest investments, now feature negative yields (you lose money by investing in them).
(Check NEO to Gas for the latest NEO staking rewards rates).
In addition, NEO is a crypto to look out for due to its reputation as the “Chinese Ethereum”. The nickname comes from NEO’s origins and strong ties to the world’s most populous country.
For instance, Onchain, NEO's parent company, worked with Alibaba (the Chinese Amazon.com) on blockchain-based email solutions. Big Four accounting firm KPMG also named Onchain a top 50 Chinese Fintech company.
There are even rumors that Chinese government officials contacted Da Hongfei, Founder and CEO of Onchain, for advice before China banned ICOs and cryptocurrency exchanges in 2017.
Therefore, while NEO might not be as profitable percentage-wise as some of the other PoS coins we’ve mentioned, NEO coins themselves might be more valuable in the future.
In other words, instead of simply investing in a passive income opportunity, investing in the NEO PoS rewards might be more about investing in the future of NEO itself.
Another thing to note is that NEO staking pays in GAS, which is what NEO users pay to execute NEO smart contracts.
Cosmos (ATOM): ~8% Yearly Interest
Cosmos is one of the most popular staking coins, up there with the likes of Tezos. While Cosmos itself - as opposed to Cosmos staking - isn’t as well-known as some of the other projects we’ve listed so far, Cosmos has a lot of potential.
The goal of Cosmos is to become an “Internet of blockchains” by connecting all the different blockchains out there. While there are thousands of crypto assets, there is no way to easily swap those assets between different blockchains.
So far, over 100 different companies are using Cosmos to build their own projects. That even includes Binance, the world’s biggest centralized exchange. Binance used Cosmos technology to build Binance Chain, their own blockchain project.
Cosmos staking rewards are high at around 8%. But the rewards could become even more valuable with Cosmos’ ecosystem growing by the day.
To get started, check out this Cosmos (ATOM) staking guide.
VeChain (VET): ~1.5% Yearly Interest
VeChain (VET) is another staking coin to consider. While the rewards aren’t high compared to other staking opportunities, the project, like NEO, might make up for its low yield with its future potential.
VeChain focuses on using blockchain technology for the supply chain, or the process of moving products and services from suppliers to customers. For example, it has announced a partnership with Penfolds, one of Australia’s oldest wineries, to track the authenticity of Penfolds wine and prevent counterfeiting.
Other notable VeChain developments include VeChain’s work with BMW on VerifyCar, an application that addresses mileage fraud by recording car mileage on VeChain’s blockchain. Another is Deloitte, one of the Big Four accounting firms, announcing that it is using VeChain to develop blockchain solutions for its clients.
Luckily, if you want to take advantage of VeChain’s potential growth, VET staking is quite easy. Just hold VET in a wallet that supports VeChain and you will receive VTHO, which is used to pay for network transactions.
Exodus makes it super easy to claim those VTHO rewards! Simply enable VET and VTHO in your Exodus wallet and you’re good to go! All you have to do is hold VET and check your wallet occasionally for new VTHO rewards.
For the latest VET staking rewards, check Staking Rewards’ VET page.
Ontology (ONT): ~3.5% Yearly Interest
Ontology coin (ONT) is the cryptocurrency that powers Ontology. Ontology emphasizes identity security and data integrity (accurate and consistent data). Therefore, Ontology’s target market is businesses who want to use blockchain benefits like smart contracts while retaining control of sensitive data.
Using Ontology, businesses can also build their own blockchains - each with their own rules and specifications - on top of Ontology’s main blockchain. Therefore, businesses get to benefit from blockchain in a way that makes sense to them while also choosing what data they share with the main, public Ontology blockchain.
The team behind Ontology is the same team behind NEO (Onchain). Onchain not only developed NEO but is very influential in China.
As with NEO staking, Ontology staking is very easy:
As of writing, Ontology pays about 3.5% annual ONG interest but check ONTCalc for the latest interest rates.
How to Buy the Best Proof of Stake Coins Easily
Looking to get your hands on some of the best proof of stake coins and start earning staking income?
If you already have crypto
If you already have crypto assets, Exodus crypto wallet allows you to exchange (mobile exchange tutorial) for all the proof of stake coins on this list right from your wallet, without having to create an account.
If you don’t have crypto
If you don’t have crypto, you can use services like Cash App or Coinbase to buy BTC before exchanging for your preferred staking coin(s) in Exodus.
Regardless of where you buy your staking coins, it’s a good idea to store them in your own wallet and not a centralized exchange’s, since centralized exchanges have a history of getting hacked or otherwise losing your funds.
So there you have it - all the best proof of stake coins to earn effortless passive income!
Looking for other ways to earn money on your crypto? Our crypto dividends article has even more crypto passive income opportunities, including ways to earn US dollar stablecoin passive income without crypto’s usual volatility!
Information provided is for informational purposes only and should not be considered financial advice. Investing in crypto assets is speculative and carries a high degree of risk; you may lose some or all of the money that is invested. Past performance is not indicative of future results.