Risks of staking?¶
There are a few risks of staking crypto to understand:
Cryptocurrency prices are mostly pretty volatile and can drop quickly. If the assets you've staked suffer a large price drop, it could outweigh any interest you have earned on them. Staking often requires that you lock up your coins for a minimum amount of time. During that period, you can not use your assets to sell or trade. When you want to unstake your crypto, there may be an Unbonding period of several days or even weeks. The biggest risk you face with crypto staking is that the price goes down. Keep this in mind if you find cryptocurrencies who offer extremely high APR's. For example, many smaller crypto projects offer high rates to lure investors, but in some cases their prices then end up crashing.
Although your tokens always stay yours, you need to unstake them before you can trade it again. It's important to find out if there's a minimum lockup period and how long the unbonding period is so you don't get any unwelcome surprises.
When you should or shouldn't stake crypto:
If you hold cryptocurrencies that you can stake and you aren't planning to trade it in the near future, then you should stake them if possible. It doesn't require any work on your part, and you'll be earning more crypto as a reward for staking.
What if you don't have any crypto you can stake yet? There are many netowrks that offer staking, but you should first evaluate whether the cryptocurrency you're looking at is a good investment. It only makes sense to buy a crypto for staking if you also believe it's a good long-term investment.
Here is a list of cryptocurrencies that you can stake with us to get you started: Available networks for staking
Please keep in mind that for your interest, you should do your own research before staking a particular token.