How Does Staking Work in Crypto Banking?10 min read

How Does Staking Work in Crypto Banking?10 min read

By providing dedicated crypto services and storage solutions, online banks now enable their customers to benefit from a wide range of cryptocurrency-related functions – including the popular and lucrative practice of crypto staking.

In this article, we’ll break down exactly how crypto staking works and explore how innovative crypto banking platforms like The Kingdom Bank allow their clients to earn rewards through staking various digital assets. 

By the end, you’ll have a solid understanding of this burgeoning field and how online banks are shaping the future of finance.

How Does Crypto Staking Work?

Simply put, crypto staking refers to the act of holding cryptocurrency coins or tokens in a wallet to support the operations of a blockchain network and earn rewards in return. 

The process works differently depending on the specific blockchain’s technical architecture.

Most notably, blockchains using a Proof-of-Stake (PoS) consensus mechanism allow staking. In PoS systems, a coin holder can “stake” their funds in a crypto wallet to validate transactions and add new blocks to the chain. 

In return for this service, stakers are rewarded with additional coins.

For example, when staking the popular Ethereum token ETH, your coins are locked into the network for a certain period. During that time, you have a chance to be selected – based on the amount staked – to validate a block of transactions. Successfully doing so earns you a small reward of new ETH tokens.

By participating in transaction validation through staking, individuals support network security and decentralization. 

Stakers have an incentive to verify only valid transactions, as getting caught approving fraudulent activity can result in slashed or forfeited coins. Over time, regular staking rewards can provide a valuable source of passive income for patient crypto holders.

What is Crypto Staking in Online Banking?

With the rise of online crypto banks like The Kingdom Bank, staking digital assets is now more accessible than ever. These new banking platforms incorporate specialized crypto storage and trading features directly into their service offerings.

Among other things, The Kingdom Bank allows opening dedicated crypto banking accounts. From within a single account dashboard, users can securely store an array of cryptocurrencies, freely trade coins on partnered exchanges, and easily monitor their crypto portfolio performance.

Most notably, The Kingdom Bank facilitates the staking process for supported PoS coins held in customer accounts. This hassle-free crypto staking functionality automatically locks eligible digital assets into staking contracts. 

Stakers then passively earn rewards without needing specialized technical knowledge.

All staking rewards are directly deposited into a user’s The Kingdom Bank crypto account. This integrated staking model provides the convenience of traditional banking alongside active participation in PoS validation. 

Customers gain staking income without managing private keys or transaction signing themselves.

How is Crypto Staking Done in an Online Bank Account?

The staking process varies slightly between individual banks and supported coins. 

But in general, here are the basic steps to stake your crypto with The Kingdom Bank:

• Deposit the cryptocurrency you want to stake into your crypto banking account. Make sure it’s a coin the bank supports for staking like Cardano, Polkadot, Tezos, etc.
• Select staking from your account dashboard. Choose the coin you want to stake and how much you want to activate for staking rewards.
• Review details such as estimated returns, staking terms and conditions. Some coins have minimum thresholds or lock-up periods before withdrawals.
• Start staking by confirming your activation. Your coins will now be lent out for others to use in transaction validation.
• Earn rewards as your portion of newly minted coins from network transaction fees. Distributions happen periodically based on each coin’s schedule.
• View updates on your staking performance and accumulated rewards within your online account anytime.

The whole process takes only a few clicks versus complex technical configuration with standalone wallets. Your digital bank manages everything behind the scenes.

Can Crypto Staking Be Done in Different Currencies?

Yes, while staking support varies between banks, The Kingdom Bank allows staking for many of the major Proof-of-Stake coins including:

• Cardano (ADA) – ADA is one of the most widely stakeable cryptocurrencies. 10 ADA minimum.
• Polkadot (DOT) – Offers annual yields of 8-15% on DOT staking. No minimum.
• Tezos (XTZ) – Lightweight blockchain known for on-chain governance. 0.004 XTZ minimum activation.
• Cosmos (ATOM) – Staking ATOM helps secure their growing decentralized ecosystem. No minimum.
• Algorand (ALGO) – On-chain random selection and finality in just 4.3 seconds. 1 ALGO minimum.
• Solana (SOL) – High throughput blockchain can handle over 50k transactions/second. 0.01 SOL minimum.

This vast array of supported coins makes The Kingdom Bank one of the top crypto banks worldwide for conveniently staking your favorite Proof-of-Stake digital assets from a single dashboard. New coins are regularly evaluated based on customer demand.

Best Crypto Friendly Bank for Crypto Staking

For users who want the simplest yet most profitable way to participate in crypto staking, The Kingdom Bank stands out as one of the premier online banks supporting the practice. Some key reasons why it is the best place for crypto staking include:

• Wide range of PoS coin support with more added regularly based on demand.
• Automated staking process managed entirely by the bank means no technical setup or monitoring required.
• Strong security as coins never leave the protected The Kingdom Bank environment and private keys remain fully in user control.
• No minimum balance requirements or stake lockups for many coins, allowing even small holders to realize staking rewards.
• Competitive estimated annual percentage yields (APYs) distributed on a consistent schedule for each coin.
• Sophisticated online banking platform provides oversight of portfolio performance and accumulated rewards.

For those seeking the easiest way to supplement their crypto holdings with built-in staking yields, The Kingdom Bank provides a premier turnkey solution all from the comfort of a user-friendly dashboard. 

No other standalone wallet or exchange experience rivals its user experience or security.

Crypto staking continues gaining popularity as a straightforward approach for long-term crypto holders to generate passive income from their assets. 

Services at crypto-friendly banks like The Kingdom Bank further simplify the process into a seamless experience on par with traditional interest earnings. 

If you’d like to conveniently stake your favorite Proof-of-Stake coins with industry-leading security and support, open a The Kingdom Bank account today to begin accruing generous staking yields straight from your online banking portal.