Presently, as per Staking Rewards data, staking rewards range between 13.97% (Polkadot) to a whopping 128.15% (the Graph). Due to its growing popularity, the number of players and platforms that are involved in this activity is multiplying. And so do new trends of crypto staking. What are the most important ones to watch for this year? Without any further ado, let's look into crypto staking and the emerging tendencies around it.

What is Crypto Staking?

Crypto staking, also known as Proof-of-Stake (PoS), is a rapidly growing ecosystem in which the owner has their cryptocurrencies in a wallet or smart contract, obtaining a percentage of passive earnings just by keeping them stored there. Essentially, staking enables users owning collateral funds to commit their tokens to support the operation of a particular blockchain network. This practice is particularly used by many big guys, as it is the case with Ethereum (ETH), Tezos (XTZ), and many others.

How to stake crypto?

According to the Binance findings, 39% of cryptocurrency users use their digital assets for staking & lending. While DeFi lending your crypto assets is one of the simplest ways to leverage your coins and tokens for passive income, staking is another avenue, particularly for those who want to contribute to maintaining the functionality of the blockchain networks they use.

If you are tech-savvy and seek passive returns via savings, crypto staking is definitely for you. The only question is: how to stake it? To start earning your first rewards on a PoS blockchain, you need to stake your coins. You can do it by locking them into your wallet, staking on a cryptocurrency exchange, or joining a staking pool. In essence, it is always a win-win. You either monetize your crypto holdings that would otherwise stand idle in the crypto wallet or reap benefits with the shared resources.

Ethereum will transition towards Proof-of-Stake model

Ethereum's transition from PoW to PoS, also known as the "Merge", is planned for the third quarter of 2022. This change is expected to bring significantly increased rewards to stackers. Staked report estimates that the ETH staking yield will be in the 8.5% - 11.5% range at the time of the merge.

This update is seen as the radical change in the world of crypto that will put an end to the debates on the energy usage and the decentralized applications implemented concerning it. In addition, this also marks the end of Ethereum mining as we know it today, a subject that obviously worries miners.

What does it mean for a cryptocurrency fund holder? Once Ethereum migrates to a proof-of-stake model, validators who want to stake Ether can earn yields in return for their support.

Crypto mining equipment might soon be obsolete

Cryptocurrency mining has been an interesting investment in the past, however, the rise of mining farms has made this practice almost obsolete for individuals.

Due to environmental concerns with mining and the Ethereum "merge" attempt to switch from PoW to PoS models, mining is forecasted to be replaced by staking.

You will not need to buy a mining platform to earn cryptocurrency rewards and, thus, save on the initial cost associated with mining. Instead, you will simply purchase the crypto you are interested in and use it to prove your stake and earn rewards as a shareholder.

However, this is a very ambiguous trend at the moment being, as it is not the first time Ethereum developers planned to make a full shift. Matt Houghton, CIO of Bitwise Asset Management, has previously spoken to Fortune about his skepticism regarding the successful implementation of such a technological upgrade.

In the meantime, other blockchains, like Solana and Cardano, are already running under proof-of-stake. Their validators' estimated earnings are around 5% per year. (graph below) To choose the right staking coin, go to MyContainer.

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NFT staking's growth is fluctuating

NFTs, which signify "non-fungible tokens," are the latest cryptocurrencies highlighted by several record sales at the start of the previous year. According to NFT stats compiled by blockchain analytics firm Chainalysis Inc., the NFT marketplace grew to almost $41 billion in 2021, closing in on conventional art sales. (Chainalysis)

However, its skyrocketing growth isn't very consistent. NFT activity ebbs and flows, making it hard to give future cryptocurrency predictions. After its spike at the beginning of 2022, NFT's value dwindled significantly and is currently in the recovery period. (graph below)

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Despite the fact that no one can guarantee the success of NFTs, this new form of technology is in the spotlight. The number of buyers is constantly increasing to take their popularity off and earn rewards. It is estimated that 250,000 people trade NFTs on the go-to OpenSea platform every month. (CNET)

Offline Crypto Staking

Due to the dynamic nature of the crypto industry, PoS blockchain networks are now resorting to integrating offline staking. ​​Cold staking, as it is also known, involves the freezing of crypto funds in offline crypto wallets.

This wallet could be a hardware or software-based wallet with private keys stored on a device that is not online. Needless to say, it is far more secure, as your funds are entirely protected from cybercriminals and more environmentally friendly, as the storage and loads of equipment are not required.

It is like a centralized-finance savings account where you can deposit funds into a particular institution and get a certain amount of interest percentage for your deposits, depending on how large your funds were.

You can decide whether to be a validator or take part as a delegate to a validator when using offline staking. Build your own wallet and delegate coins here.

Regulations in crypto

In 2021, the Federal Reserve Board, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency in the US issued a statement summarizing their concerns regarding crypto-assets and provided a roadmap of future plans. It was implemented for the sake of legal policies, as the governments want to get a greater level of clarity on whether certain crypto-related activities conducted by banking organizations are legally authorized.

Therefore, we should expect more legal and regulatory compliance regulations in 2022. Perhaps, income or tax reports will be required too. The remarkably mainstream adoption of cryptocurrencies we saw throughout last years would get federal bank regulatory agencies involved sooner or later. In all instances, this indicates only one thing: the rising importance of cryptocurrency within the global economy.