Economy

Staking as a Passive Trading Strategy: Unlocking Steady Crypto Earnings

Published

1 year ago

04/11/2024

Introduction

In the world of cryptocurrency, staking has emerged as one of the most popular and accessible ways for investors to earn passive income. Unlike traditional trading, where the value of assets can fluctuate wildly in a single day, staking provides a more stable and predictable form of income. Staking involves holding a specific cryptocurrency in a wallet to support the operations of a blockchain network. In return, participants earn rewards in the form of additional cryptocurrency. As the crypto market evolves, staking has gained traction as a low-effort, passive trading strategy, appealing to both new and seasoned investors.

In this article, we will delve into staking as a passive trading strategy, exploring how it works, its benefits and drawbacks, and the various considerations for investors. With the potential for steady earnings and portfolio diversification, staking offers a unique avenue for those looking to optimize their crypto holdings.

What is Staking?

H2: Understanding the Basics of Staking

Staking is the process of participating in a blockchain network by holding a certain amount of cryptocurrency to support network operations. Stakers contribute to securing the network, validating transactions, and in some cases, creating new blocks. In proof-of-stake (PoS) and delegated proof-of-stake (DPoS) systems, staking replaces the energy-intensive mining process seen in proof-of-work (PoW) blockchains like Bitcoin.

By staking their assets, users help maintain the stability of the network while earning rewards as compensation. The amount of cryptocurrency staked often determines the level of influence or participation in the network’s validation process.

H3: How Staking Rewards Are Calculated

The rewards for staking depend on several factors, including:

Amount Staked: The more you stake, the higher your potential rewards.
Network Inflation: Some blockchains inflate their supply to distribute staking rewards.
Duration of Stake: Certain networks offer higher rewards for longer staking periods.
Overall Network Staking Ratio: If a large portion of the network’s currency is staked, individual rewards may be lower.

Benefits of Staking as a Passive Trading Strategy

H2: Advantages of Staking

Staking provides a variety of benefits for investors looking to earn passive income. Here are some of the primary advantages:

Consistent Passive Income: Unlike volatile trading, staking provides a steady source of income, with rewards paid periodically.
Eco-Friendly: Staking is energy-efficient compared to mining in PoW systems, which require extensive energy usage.
Support for Blockchain Networks: By staking, investors play a role in securing the network, thereby contributing to the stability and decentralization of the blockchain ecosystem.
Low Entry Barrier: Staking does not require advanced technical knowledge or expensive equipment, making it accessible to most crypto holders.

H3: Portfolio Diversification

Staking allows investors to diversify their portfolio by adding different staking assets, spreading risk across various projects. This approach can reduce volatility and create a more balanced investment strategy.

Risks and Challenges of Staking

H2: Drawbacks of Staking

While staking has numerous benefits, it is not without its challenges. Below are some of the key risks associated with staking:

Market Volatility: Although staking rewards may seem stable, the underlying asset’s value can fluctuate, impacting the actual return on investment.

Lock-Up Periods: Some blockchains require stakers to lock up their assets for a set period, during which they cannot access or trade their funds.

Slashing Penalties: Certain networks impose penalties, known as slashing, for validator misbehavior. Stakers may lose a portion of their staked assets if the validator fails to comply with network rules.

Inflationary Pressures: Some networks distribute staking rewards by inflating their supply, which could dilute the value of the token over time.

H3: Lack of Liquidity

Staked assets may lack liquidity, especially during lock-up periods. If the market takes a downturn, stakers might be unable to sell their holdings quickly, resulting in potential losses.

Different Staking Methods

H2: Popular Staking Methods for Investors

There are various ways to participate in staking, each with its pros and cons. Below are a few popular methods:

Direct Staking: Investors stake their assets directly on a blockchain network by becoming validators.
Delegated Staking: Investors delegate their tokens to a validator node. The validator takes care of technical requirements while the investor receives a portion of the rewards.
Staking Pools: Staking pools allow users to combine their resources to maximize rewards. Pooling can help smaller investors earn rewards even if they don’t meet the minimum staking requirements.

Key Considerations for Staking

H2: Factors to Evaluate Before Staking

Before diving into staking, investors should carefully consider the following:

Staking Yields: Evaluate the reward rate offered and compare it with potential inflation on the network.
Staking Period: Be mindful of the lock-up period and whether the network offers flexible options for early withdrawal.
Reputation of Validators: When choosing a validator, consider their reputation, fee structure, and history of slashing events.
Platform Security: Ensure that the platform or wallet used for staking has strong security measures to prevent unauthorized access.

H3: Tools and Resources for Effective Staking

Platforms like Nearest Edge offer tools and insights to optimize staking strategies, providing traders with the necessary data to make informed staking decisions.

Staking Case Studies

Many investors have found success through staking, particularly during market upswings. For example, Ethereum 2.0 staking has attracted significant interest as it prepares to transition from PoW to PoS, offering attractive returns for ETH holders who choose to stake.

Another example is Cardano (ADA), which has gained popularity due to its unique approach to staking and user-friendly wallet options. Both Ethereum and Cardano highlight the advantages of staking for long-term investors focused on capital appreciation and passive income.

FAQ Section

H2: Frequently Asked Questions (FAQ) on Staking

H3: 1. What is staking in crypto? Staking is the process of holding crypto in a wallet to support a blockchain network and earn rewards.

H3: 2. How much can I earn through staking? Earnings vary based on factors like the amount staked, duration, and network inflation. Yields generally range between 4% and 20% annually.

H3: 3. Are there risks involved in staking? Yes, risks include market volatility, slashing penalties, lock-up periods, and liquidity constraints.

H3: 4. Do I need technical knowledge to stake? No, many staking platforms make it easy for beginners. Delegated staking and staking pools are especially user-friendly.

H3: 5. Is staking the same as mining? No, staking is a different consensus mechanism. Mining requires significant energy use, while staking does not.

H3: 6. What is a lock-up period? Some networks require staked funds to be locked for a specified time, limiting access during this period.

H3: 7. Can I stake multiple cryptocurrencies? Yes, depending on the network and platform, you can stake various cryptocurrencies simultaneously.

H3: 8. What are staking rewards based on? Rewards depend on the network’s design, including the staked amount, duration, and market conditions.

H3: 9. Are staking rewards taxed? Yes, staking rewards may be subject to taxation. Consult with a tax professional for guidance.

H3: 10. What are the best tools for staking? Platforms like Nearest Edge offer tools to track staking returns and monitor market trends.

Conclusion

Staking is a highly effective passive income strategy in the crypto space, offering a consistent way to earn returns without constant monitoring. With several options, including direct staking, delegated staking, and staking pools, investors can choose a method that fits their risk tolerance and financial goals. However, it’s crucial to understand the potential risks involved, such as market volatility, liquidity issues, and slashing penalties.

As the DeFi ecosystem expands, staking will likely continue to grow in popularity, providing both novice and experienced traders with a valuable income-generating tool. Whether you’re seeking a low-maintenance strategy to grow your crypto portfolio or an eco-friendly alternative to mining, staking presents a compelling option in the crypto market.

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Dipo Olowookere

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via [email protected]

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Economy

Nigeria’s Tax Sovereignty Not Affected by Deal With France—FIRS

Published

1 hour ago

15/12/2025

Adedapo Adesanya

By Adedapo Adesanya

The Federal Inland Revenue Service (FIRS) has issued a statement providing further clarifications following comments and reports on the recent memorandum of understanding between Nigeria and France on taxation.

The MoU, signed on December 10, 2025, at the French Embassy in Abuja by the chairman of FIRS, Mr Zacch Adedeji and French Ambassador, Mr Marc Fonbaustier, on behalf of France’s Direction Générale des Finances Publiques (DGFiP), focuses on key areas, including digital transformation, workforce development, information exchange, transfer pricing, and tackling base erosion and profit shifting.

However, the MoU has been met with resistance from opposition coalition party African Democratic Congress (ADC) as well as Northern elders, which both raised serious questions about transparency, national sovereignty and the safety of Nigerian consumers’ data.

In response, the tax authority, which will become known as Nigerian Revenue Service (NRS) from next year, emphasised that the deal does not grant France access to Nigerian taxpayer data, digital systems, or any element of the country’s operational infrastructure.

“All existing Nigerian laws on data protection, cybersecurity, and sovereignty remain fully applicable and strictly enforced. The NRS, like its predecessor, FIRS, places the highest premium on national security and maintains rigorous standards for the protection of all taxpayer information.”

It said similar MoUs are signed by tax administrations around the world to promote collaboration, knowledge sharing, and the adoption of global best practices.

“The DGFIP is among the world’s most advanced tax authorities, with over a century of institutional experience and deep expertise in digital transformation, taxpayer services, governance, and public finance.

“This partnership simply enables Nigeria to learn from that experience. It is advisory, non-intrusive, and entirely under Nigeria’s control.

“Contrary to misconceptions, the MoU does not displace local technology providers, FIRS and the emerging Nigeria Revenue Service (NRS) continue to work closely with Nigerian innovators such as NIBSS, Interswitch, Paystack, and Flutterwave. The MoU does not include the provision of technical services; it is limited to knowledge sharing, institutional strengthening, workforce development, policy support, and best-practice guidance.

“We welcome robust public engagement on tax reforms, but such conversations must reflect the actual content and purpose of the agreement. Rather than undermining Nigeria’s sovereignty, this MoU strengthens it by helping to build a modern, capable, globally competitive tax administration one firmly in command of its systems, data, and strategic direction.

“FIRS remains committed to transparency, professionalism and partnership that advance Nigeria’s long-term economic development,” it said in a statement.

Economy

Nigeria Okays 28 Firms for Gas-flaring Monetisation Project

Published

11 hours ago

15/12/2025

Adedapo Adesanya

By Adedapo Adesanya

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has issued permits to 28 companies under Nigerian Gas Flare Commercialisation Programme (NGFCP), a scheme that aims to end routine gas flaring to cut carbon emissions and use some of the gas to generate power.

Gas flaring is the controlled burning of natural gas that is released during oil extraction. The initiative marks a major step toward ending flaring and monetising wasted gas.

The projects could capture 250 to 300 million standard cubic feet per day (mmscfd) of gas currently flared, cut about 6 million tonnes of CO₂ annually, and unlock nearly 3 gigawatts of power generation potential, an NGFCP document showed.

Nigeria expects the initiative to attract up to $2 billion in investment and create more than 100,000 jobs. It could also produce 170,000 metric tonnes of LPG annually, providing clean cooking access for 1.4 million households.

The permits follow a competitive bid round that awarded 49 flare sites to 42 bidders after the programme was restructured post-COVID-19 and the Petroleum Industry Act.

Speaking on this, Mr Gbenga Komolafe, head of the NUPRC, during the presentation of the certificates to the 28 companies said, “The NGFCP is a pillar in our quest to eliminate routine flaring, reduce emissions, and enhance Nigeria’s global credibility in energy transition commitments.”

The programme aligns with Nigeria’s Energy Transition Plan and aims to turn flare gas from an environmental liability into an economic asset.

The 28 companies have signed key agreements, including Connection, Milestone Development and Gas Sales Agreements, and now qualify for permits to access flare gas.

Producers will benefit from reduced liabilities, improved Environmental, Social, and Governance (ESG) performance and alignment with the government’s decarbonisation agenda.

Development partners, including Power Africa, KPMG, World Bank’s Global Gas Flaring Reduction initiative, USAID and financiers, have supported the programme with technical and commercial frameworks.

Mr Komolafe said while the permits mark a milestone, engineering, construction and financing must begin in earnest.

“The real work starts now,” the official added. “This programme will create economic, industrial and environmental value while strengthening Nigeria’s energy transition.”

Economy

CSCS, Geo-Fluids, FrieslandCampina Lift NASD OTC Bourse by 0.62%

Published

2 days ago

13/12/2025

Adedapo Adesanya

By Adedapo Adesanya

Three bellwether stocks lifted the NASD Over-the-Counter (OTC) Securities Exchange by 0.62 per cent on Friday, December 12 with the NASD Unlisted Security Index (NSI) jumping by 22.20 points to 3,600.43 points from 3,578.23 points.

In the same vein, the market capitalisation of the trading platform increased by N13.28 billion to close at N2.154 trillion from the previous day’s N2.140 trillion.

During the session, Central Securities Clearing System (CSCS) Plc went up by N2.53 to close at N39.71 per share compared with the previous day’s N37.18 per share, Geo-Fluids Plc added 35 Kobo to its price to finish at N5.00 per unit versus Thursday’s closing price of N4.65 per unit, and FrieslandCampina Wamco Nigeria Plc appreciated by 23 Kobo appreciation to sell at N60.23 per share versus N60.00 per share.

It was observed that yesterday, the price of Golden Capital Plc went down by N1.05 to N9.45 per unit from N10.50 per unit, and UBN Propertiy Plc declined by 21 Kobo to N2.01 per share from the N2.22 per share it was traded a day earlier.

There was a significant improvement in the level of activity for the day, as the volume of transactions increased by 6.2 per cent to 37.4 million units from the previous day’s 35.2 million units, the value of trades went up by 265.1 per cent to N4.9 billion from N1.4 billion, and the number of deals soared by 13.80 per cent to 33 deals from 29 deals.

Infrastructure Credit Guarantee Company (InfraCredit) Plc ended the last trading day of this week as the most active stock by value on a year-to-date basis with 5.8 billion units valued at N16.4 billion, the second spot was taken by Okitipupa Plc with 178.9 million units traded for N9.5 billion, and third space was occupied by a new comer in MRS Oil Plc with 36.1 million units worth N4.9 billion.

InfraCredit Plc also finished the session as the most active stock by volume on a year-to-date basis with 5.8 billion units transacted for N16.4 billion, followed by Industrial and General Insurance (IGI) Plc with 1.2 billion units valued at N420.3 million, and Impresit Bakolori Plc with 537.0 million units sold for N524.9 million.