Tron (TRX) was launched four years ago, and its ecosystem has continued to grow in leaps and bounds since then. It keeps leveraging on the support from its community to rise through the cryptocurrency ranks.
It is now ranked among the top 30 digital currencies worldwide, a feat it achieved in less than three years. The Tron community boasts more than 52 million members, with TRX price setting a new all-time high in May this year.
What Is Tron Staking?
Before discussing Tron staking, you need to understand crypto staking whether you are a crypto investor or trader. Staking is a term you will often hear about in the crypto space.
Most cryptos confirm transactions using staking and enable holders to be rewarded for holding such tokens. When you commit your digital asset to validate a transaction on any blockchain, you are staking your cryptocurrency.
Staking is usually deployed on any proof-of-stake blockchain as these blockchains use it to process payment and secure the blockchain. Some crypto holders get involved in staking to earn passive rewards. However, a thorough understanding of the process is required.
A proof-of-stake blockchain differs from a proof-of-work (PoW) blockchain based on its mode of operation. Mining devices with customized computing power are usually used in the PoW model for solving complex mathematical equations. Hence, a PoW blockchain is considered less efficient than a PoS blockchain.
Differences Between Crypto Staking And Mining
The table below highlights the difference between staking crypto and mining:
| Crypto mining | Crypto staking |
| Comes from proof-of-work mechanism | Comes from proof-of-stake mechanism |
| Miners use hash power through a GPU or ASIC miner to complete their task | Users lock their coins for a specified period |
| Hardware requirements are usually expensive and the process is often detrimental to the environment | Has no relationship with the environment |
| Doesn’t require asset freezing | Stakers need to freeze their assets for a specific period as stated by the platform |
| Without considering hardware expenses, mining brings greater rewards | Rewards depends on the asset’s volatility and the lock-up period |
| BTC, and digital assets founded within the same period as BTC are built on the PoW model. Even though Ethereum recently switched to a PoS model | Relatively newer cryptocurrencies are built on the PoS mechanism |
Staking Tron and the Tron PoS
Staking Tron is done on a 1:1 ratio. Hence, Tron holders that wish to earn more only need to stake more. The Tron power is a crucial part of the Tron network. It serves several purposes, one of which is for voting super representatives (known as delegated PoS system). These Tron super representatives are usually 27 in number and elected every 6 hours by the Tron user community who are staking their TRX.
These Tron power holders can decide to convert their Tron power to TRX within 72 hours. More importantly. A DAO (decentralized autonomous organization) is in control of the entire process. These super representatives distribute the Tron staking rewards based on established rules.
A DAO can be likened to a smart contract series elected by nodes for the progress of the community. DAOs ensure that the community’s guidelines are followed for developing the platform democratically and in a decentralized manner.
How To Stake Tron
JustLend.org, bankroll.network, and wink.org are the top three places to stake your Tron.
Staking on JustLend
JustLend is like an official Tron platform, and it’s going to allow you to supply your Tron or other tokens on the Tron network to earn an APY. When you’re on the home screen in your dashboard, click on the market screen to have an overall view of how many people are supplying their tokens and how many people are borrowing. Then, you can also check out the governance page, but there’s not much on there as of this writing. For optimal results, choose the low-risk option to avoid borrowing anything. You don’t want to mess with the borrowing option; it involves lots of complexities. You will get good rewards for just supplying. You can then collateralize your supply and borrow against that. But it’s complicated if your knowledge is limited to the basics because if you do something wrong, you can get liquidated and lose all your money.
Hence, just stick with the basics, supply your TRX, and you’ll earn the APY. You get your rewards in TRX, and they are automatically paid to you after seven days. Then, you can take those rewards and supply them again and keep compounding that way. You get over five percent APY on your TRX. These rewards always fluctuate a little bit depending on what’s being supplied, what’s being borrowed, and other factors. The best part about these is you can withdraw your full balance at any time. It’s not frozen or anything like that; you can simply click “max,” then click “withdraw,” and you’re good to go. If you want to supply, click the supply button on the right side when you are logged in on your dashboard, enter the amount and click on accept. Supply your token on JustLend and start earning an APY; it’s that easy. Also, it’s fully decentralized. They don’t take your name, your information, or anything like that. That’s why JustLend gets our recommendation. Staking Tron on the other two sites follows a similar procedure as on JustLend.
How To Stake Tron With Etoro
There are six steps to staking Tron with eToro:
- Create an account on eToro (make sure your state of residence is eligible for trading globally). We suggest you create your account with your Google account – it is a fast way to sign up.
- Once you’ve signed up, check your email for eToro’s activation email. Then, verify your email by clicking on the “verify my email” button.
- When you click on the “verify my email” button, you should be redirected to your dashboard, where you can complete your profile.
Update 2024 – Going forward, the only cryptocurrencies eToro customers in the United States will be able to trade on the platform will be Bitcoin, Bitcoin Cash and Ethereum.
Note: eToro will require you to provide an id (which must include your picture), a phone number to verify your account and your trading objectives.
- Fund your account with a minimum of $30 using any of the acceptable funding methods such as your bank account. Without funding your account, you cant purchase any crypto-asset, whether for staking or any other purpose, including TRX
- Purchase TRX. Keep in mind that you can also stake Cardano (ADA). But the focus here is TRX.
Once you have funded your account, click on the “buy” button beside “TRX.” Then, enter the amount you want to stake and click on “open trade.”
There are two things you need to keep in mind when staking on eToro:
- Your earnings depend on the account type you hold – a premium account gives more rewards than a free account.
- Your staking returns is usually 5% on average without considering fees or price fluctuations
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Get Paid
Once you’ve made your purchase, the staking and reward processes are automated, and your earnings for the month will be sent to you two weeks after that month ends. Etoro pays your earnings in TRX.
Staking Tron With A Wallet
The wallets listed below are in no particular order, but they are proven for staking Tron. Keep in mind that the best way to keep your wallets secure is to use hardware wallets.
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Ledger Nano X
This wallet supports all devices, including desktops, PC and smartphones. Its software for communicating with your ledger account is the ledger live. The Tron staking process using this wallet is very simple. Install the Tron app from the app catalog when you’re logged in to the ledger live. Then, Tron (TRX) will be displayed on your ledger device. Then, select the Tron account to manage your TRX so that you can get the address to receive the TRX digital currency.
You will be requested to verify the address like all other transactions, and we suggest that you do so even though there is an option for you to skip this step. Once you have TRX, stake it with any of the super representatives and earn your rewards. If you want to access more features, connect the ledger to Tronscan (this is the official Tron blockchain explorer).
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Tronlink
Apart from android and apple users that can use this wallet, its chrome browser extension is also available. Like the ledger wallet, you can also connect the Tronlink wallet with the Tron scan. Details about the Tron staking are available on your Tronlink dashboard.
The JustSwap platform is integrated with this wallet to enable immediate swaps between Tron and TRX20 tokens. The JustSwap platform is also useful to explore DeFi apps and NFTs on the Tron network.
Staking Tron With Exchanges
Even though we strongly recommend eToro as the best place to stake Tron, it is not the only option available. You can also stake Tron on Binance, BitTrex, Kucoin and Kraken.
Staking With Binance
The maturity period for staking Tron on Binance is three months. A maximum of 10 million TRX can be staked, while a minimum of 1,000 TRX can be staked. The APY is set at about 21%. Per the official announcement, stakers can view their assets from their Binance dashboard and unlock staked products within 24 hours.
Staking With PancakeSwap
Before any Tron holder can stake on PancakeSwap, they must swap their TRX for cake and participate in one of the many PancakeSwap syrup pools. They can then swap their cake earnings back to TRX tokens.
There are dedicated PancakeSwap pools where staking occurs. Thus, interested participants must always watch out for the opening and closing times of such pools. Usually, TRX pools on PancakeSwap run for two months, while the TRX earnings are distributed after the pools close.
Staking with Poloniex
One main benefit of staking TRX on Poloniex is that participants are entitled to all their staking rewards. Also, there is no lock-up period. Hence, each Tron holder has complete control over his staked holdings. Poloniex calculates staking rewards based on the number of coins in the holder’s wallet at four separate times of the day.
Staking Tron On Defi Platforms
Tron owns a money market protocol (aka a lending platform) called JustLend. The platform establishes fund pools, and there is an algorithm that determines the interest rates. The demand and supply of Tron assets determine how this algorithm works.
The depositor and borrower are the only roles in JustLend. Either or both of these roles can relate to the protocol with respect to interest rates. Judtlend aims to ease the enormous volume of requests for various DeFi offerings.
Loan collaterals and smart contracts on JustLend can be in TRX and a few other selected cryptos. Summarily, Tron lenders earn interest on their assets.
Best Exchanges For Tron Staking
The rising popularity of Tron staking has made it necessary for various platforms to now offer Tron staking services. Here are the top three exchanges for Tron staking:
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eToro
Etoro’s staking-as-a-service offering makes it hugely popular among crypto players. Etoro pays Tron stakers their rewards at the end of each month, with TRX yields commonly varying between 75-90%.
One benefit of TRON staking with eToro is that the platform is regulated, with a low holdup period, while the platform’s staking process is automated. One slight concern is that its staking yields are relatively low.
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Binance
Tron staking was launched on Binance last year and offered similar benefits like eToro. However, Tron staking on Binance isn’t always available. There is always an opening period t enter the staking pool.
Tron staking period on Binance is also seven days like on eToro. The number of tokens staked and the length of the staking period determine the staking rewards. One major turnoff with Tron staking on Binance is the clumsy user interface. Also, some stakers might be put off with the platform’s first come, first serve approach.
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Poloniex
Tron staking was launched on this platform two years ago. Poloniex’s unique selling feature for Tron staking is giving total staking rewards to all stakers. Also, there is no lock-up period when staking Tron on this platform. Hence, Tron stakers can control their tokens as they deem suitable.
However, staking rewards are determined by the amount of TRX in the Poloniex wallet during specified periods as observed by the platform’s snapshots. Poloniex pays staking rewards every two weeks and is available to you so long Poloniex is acceptable in your place of residence. 100 TRX is the minimum amount acceptable by Poloniex to start Tron staking. Most TRX stakers prefer eToro to Poloniex because Poloniex isn’t acceptable in all countries.
How Profitable Is Tron Staking?
Participation in the Tron network through the voting system can yield passive income. Asides from the elected SR’s fees, Tron’s current pay is about 5%. The elected sr will largely determine the number of rewards a staker will receive, and a staker can claim his rewards daily or automate the payment of his earnings as determined by the super representative chosen by the staker.
There are several benefits of Tron staking. No one can steal delegated funds, and the staker doesn’t bear any consequence when an SR fails in his duty. Also, a staker earns enough bandwidth freely, which he can use to validate at least 20 transactions. There is even extra bandwidth for stakers who freeze their assets.
The network’s design is scalable by default – proof that the network’s transaction rate is arguably the highest in the industry. If you need to calculate your potential earnings for staking specific Tron amounts, use this Tron calculator.
Is Tron The Best Crypto To Stake?
As opposed to other cryptos, Tron offers three ways to earn – voting a super rep, running the node for a super representative., and running the node for a potential super representative. The first option gives an APY of 3.35%, the second provides an APY of 3.29%, while the last one yields an APY of 3.03%.
Aside from Tron, Ethereum staking should also be considered as an option/ its rewards are also fascinating. One thing almost no one knows about Tron staking is that when you stake Tron from exchanges, you lose access to the network’s privileges, such as the rewards for voting and bandwith energy.
What Are The Risks Of Tron Staking?
Like other cryptos, holding any digital asset (including Tron) is risky, and it doesn’t matter whether you are holding it for staking purposes. Another risk peculiar with Tron staking is funds freeze. You are mandated to freeze your funds for at least 72 hours when you stake (vote). Hence, you might miss out on potential profits if the price spikes. However, you are allowed to unfreeze immediately or anytime you wish after 72 hours.
One other thing to keep in mind is that you need to check your votes occasionally. You won’t want to miss out on the network’s updates which often happens. Also, you might need to research who to vote for. These SRs offer different staking rates, with some offering above the common 1.3 TRX. Don’t be confused between voting and staking; you can’t vote without staking.
Taxes And Regulations Related To The Tron Staking
Tron taxation and regulation are similar to what obtains with other cryptocurrencies. The IRS notice 2014-21 remarks that convertible digital assets like Tron are subjected to federal income tax with general tax principles applied to it. For a clearer understanding of taxes in crypto staking (including Tron staking), let’s consider this example. Suppose the total value of tokens in an overly simplified illustration doesn’t change regardless of the number of tokens earned from the staking process. Also, suppose that the project’s reward for 1-year staking is one more token. Based on this scenario, 200 tokens at the start of a year (worth about $1 each) would have increased by $200 by the end of the same year. However, the additional $200 is worth $0.50 per token, even though the primary tokens are still worth $200. The reason is that the protocol’s net worth remains constant.
Therefore, the estimated worth from the earned tokens over one year is an average of $0.75 per token—the new IRS code regarding staking rewards as gross income once you are given. Hence, you are mandated to pay taxes on the earned 100 tokens from staking, which means you are paying $75 as tax. Under the IRS code, some digital assets are considered as security for non-tax purposes. However, the legislature desires that brokers and exchanges disclose the cost at which they bought their digital assets for easy calculation of capital appreciation or loss. Hence, the legislature is proposing that virtual assets be considered as covered securities.
Based on the revenue ruling 2019-24, the IRS considers staked earnings as ordinary income, and you will be taxed appropriately based on the amount you sell your coins. The geometric rising number of digital currency transactions is an indication that the IRS needs to provide clarity on crypto staking and other tax-related issues regarding digital currency usage.
There is a new crypto proposal before the legislature, which includes a demand for new reporting methods. This proposal is aimed at ensuring more tax compliance among players in the crypto industry. Hence, it has become necessary for crypto players to hire a competent tax advisor to avoid tax violation issues with law enforcement agents.
Conclusion
Anyone desiring passive income in the crypto space needs to seriously consider holding and staking PoS currencies. The entry requirements aren’t complex, while the reward is fair enough just for keeping funds in your wallet.
There aren’t many platforms better than eToro for Tron staking. Also, while there may be other tokens (such as ETH 2.0) that can be staked, Tron staking offers the best benefits not just in terms of staking returns but also other benefits.
Your next best step is to take action on what you’ve learned and get started today by staking your Tron on eToro. We are convinced you can have enjoyed profit-filled staking provided you follow our instructions.
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