What is Staking?
Staking is the term used for the rewards you gain when you hold onto your cryptoassets over time. Just as you would gain interest in a traditional investment, with eToro you can gain interest in the form of cryptoassets simply by holding them in your account. This is a great way to earn passive income and eToro does the work for you!
Staking has been made possible since the evolution from a Proof of Work (PoW) model into a Proof of Stake (PoS) model. Proof of Work refers to the process whereby a miner proves that a certain amount of mining power was used to solve a problem. This has been the technology that has powered Bitcoin miners to be able to mine Bitcoin. However, as it required a significant amount of computing power, some alternative options have been designed to improve the way tokens are mined.
The Proof of Stake (PoS) model was introduced as the alternative solution to minimize the amount of power required to generate tokens. Proof of Stake helps to keep the network decentralized without using as much mining power. This technology allows exchanges such as eToro to allocate the cryptoassets you hold in your account and use them in a process to solve the complex problems that were previously solved by Proof of Work.
As eToro uses your assets to solve these problems, you are rewarded for your assistance. Your rewards are determined by the number of assets and the length of time you hold onto your assets while staking them.
In eToro, your rewards are paid out automatically every month straight to your account without needing you to perform any actions. These rewards are yours to keep and it is eToro’s way of saying thank you for holding your assets in your account with them.
eToro currently supports Cardano (ADA) and Tron (TRX) and will be supporting more assets over time as the technology develops. Please keep in mind eToro does not include holding cryptoassets using copy trading or copy portfolio positions.
How to Stake?
To stake, you would need to fund your eToro account. The minimum deposit is $50 and the maximum deposit is $10,000 per day.
Here are the steps to funding your account:
- Log in to your account
- Click on “Deposit Funds”
- Enter the amount
- Finally, select your preferred deposit method
How to be Eligible?
The eligibility of staking your crypto assets is based on how long you can hold them. This all depends on the token, the blockchain of the token, and also the time taken for the token to be included in the staking pool.
The pool refers to the place where all the assets are collected to allocate them towards staking. By collecting many users’ assets into one pool, the pool gains more power to complete the complex problem, and the more staked assets there are, the higher the probability of receiving a reward.
How do eToro Calculate the Rewards?
eToro values transparency and honesty so they follow a three-step method to ensure the rewards are calculated and paid out fairly.
First, they take a screenshot of your account each day to record how many assets you are holding. Then, they collect all the screenshots at the end of the month and divide the total assets by the number of days to calculate the average. This is done in order to identify how much you were holding over time and determine your rewards.
Next, they calculate the monthly yield percentage by adding up all the staked coins on eToro and then divide the amount by the total daily average.
Lastly, depending on your club membership level, they add your club membership percentage to the rewards and then pay them out to your account. You receive a monthly email with a summary of your staking rewards earned and a breakdown of how it was calculated.
They have 5 club memberships. As you rise within your club membership level your staking rewards increase.
Silver club members can get up to 75% of the staking yield whereas it increases all the way up to a Diamond club member who can get 90% of the staking yield.
The realized equity requirements for each club are as follows:
- Silver = $5,000
- Gold = $10,000
- Platinum = $25,000
- Platinum+ = $50,000
- Diamond = $250,000
What is the Minimum Rewards Payout?
The minimum rewards payout amount is 1 USD and the rewards are distributed after the 14th of the following month. eToro offers from 75% and up of the staking yield rewards, making it one of the topmost generous staking offers in the market.
Storing your cryptoassets in your account is secure as eToro values the safety of your assets and takes care to ensure you are protected against risks. They make this possible by keeping a small percentage of the total rewards as a fee to maintain their system.
Why Stake with eToro?
If you are thinking about using eToro, I welcome you to read my in-depth eToro review. I cover the ins and outs of what you need to know before opening an account – including metrics surrounding regulation, fees, commissions, payment methods, and of course – safety.
Staking with eToro is easy as they take care of the entire staking procedure and automatically payout rewards.
Staking is a secure and safe way to earn passive income with your cryptoassests by simply holding them in your account. It is low risk as the rewards are not influenced if the asset value decreases. As a matter of fact, staking your coins supports the price of crypto as it decreases the supply of tokens and increases the demand.
By staking you are earning rewards, assisting the network to keep it decentralized, as well as indirectly increasing the value of the asset all at the same time without much effort.
eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.
Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
Past performance is not an indication of future results.
Cryptoassets are volatile instruments which can fluctuate widely in a very short timeframe and therefore are not appropriate for all investors. Other than via CFDs, trading cryptoassets is unregulated and therefore is not supervised by any EU regulatory framework.