Staking is a way of earning passive income by using specific cryptocurrencies to verify transactions on a blockchain network. Staking differs from crypto mining, although both can generate returns that exceed typical savings accounts.
Although the term staking sounds complicated, the principle is very simple. A growing number of online exchanges aim to make crypto staking easier for everyday users.
FTX is one of the top exchanges in terms of volume and features; you can rest assured they have stakes which is great! In this article, we will be discussing ways to increase FTX staking yield.
About FTX
FTX is a cryptocurrency exchange founded in 2019 by Sam Bankman-Fried and Gary Wang. Although the exchange is only a few years old, FTX has quickly become one of the largest companies in the cryptocurrency and blockchain industry. Traders on FTX have access to spot trading in various cryptocurrencies, and the exchange also has arguably the most comprehensive suite of crypto derivatives on the market. FTX offers perpetual futures and standard futures contracts, leveraged tokens, volatility tokens and even prediction markets.
What is Staking?
Staking is the process by which token holders distribute their tokens to validators, which helps increase the voting weight of those validators. Unlike lending, validators have no ownership or control over your tokens.
By staking a coin to a validator, the coin holder shows that they trust the validator. As the validator accumulates more delegations from different holders, it acts as the network’s “proof” and proves that the validator’s consensus vote can be trusted.
Yet, through this “Proof of Stake”, the network reaches consensus by weighing the collective vote of all validators against their share of the stake delegated to them.
How Does Staking Work on FTX?
Currently, FTX allows its users to stake up to 4 coins, which are all coins associated with the FTX platform. These coins are FTT (FTT), Serum (SRM), Solana (SOL), and Raydium (RAY). Each token can be used for airdrops up to 8% APY of your invested capital, and the rewards are now paid daily.
Staking on FTX is a low-risk way to increase your token holdings. When staking FTT, you will not get additional FTT tokens as a reward, but you will get many benefits for your FTX account.
Note that it takes seven days for your staked tokens to be unstaked. If you choose to cancel your tokens immediately, you will be charged fees. This makes staking on FTX more suitable for users who want to hold the token for a long time.
Now that we know some of the basics of staking on FTX, let’s look at how you can use your cryptocurrency on the exchange. The first step is to create an account with FTX.
Please note that you must complete the identity verification process before trading, depositing or withdrawing cryptocurrencies on FTX. As the industry moves towards better regulatory compliance, these Know Your Customer (KYC) measures are on almost all major cryptocurrency exchanges.
Once your FTX account is ready, you must fund your account with the tokens you wish to wager. You can deposit it into FTX from an external cryptocurrency wallet or buy tokens directly on FTX.
To start staking, you can visit FTX.com/staking and select the token you wish to stake. Then select “Stake” and enter the number of tokens you want to wager. Once wagered, rewards will be paid into your FTX account once a day.
Five Ways to Increase Your FTX Staking Yield
The following are the ways to increase your FTX staking Yields:
- Increased Referral Rebate Rate: The exchange has increased rewards for users who bet and continue to refer others.
- Override of Maker Fees: Stakers have received a new maker fee schedule that overrides the normal fee schedule. So once they place a maker order on the exchange, they enjoy the discounted price.
- Bonus Votes as Rewards: Offer a reward vote for the exchange’s mining pools based on the FTT they hold and their trading volume.
- More Airdrop Rewards: Stakeholders enjoy more SRM airdrops and can earn other tokens and rewards.
- Waived transaction fees: All stakers can withdraw some ERC 20 and ETH for free every day. (No swap fees, although network gas fees remain the same)
- IEO Tickets: Staker receives IEO tickets hosted by the exchange.
Conclusion
FTX’s staking feature comes in very handy for users who own FTT or some of the most popular tokens in the Solana ecosystem. FTX has a very good track record of security, so staking on exchanges is a relatively low-risk way to earn additional tokens or get the privilege of staking FTT.
While the staking process is instantaneous, unstaking takes between 7 and 14 days, depending on the token, unless users are willing to pay an unstaking fee of 10% of the total capital staked.
