CoinGecko published a report analyzing staking yields among the largest PoS blockchain projects. The survey analyzed yields, ratios, and other functionality metrics, and found a wide range of viable strategies.
Cosmos, Polkadot, and Tezos currently offer the highest staking yields, but other contenders may take their place.
CoinGecko’s PoS Analysis
CoinGecko, a prominent crypto data aggregator, released a new report today on proof-of-stake (PoS) blockchains. The study looked at staking yields and ratios, as well as network functionality and other metrics. Based on this assessment, CoinGecko determined that Cosmos (ATOM) offers the highest staking yield available.
Read more: Proof-of-Work vs Proof-of-Stake: Which Is Better?
CoinGecko PoS Yields. Source: CoinGecko
PoS consensus algorithms allow users to “lock up” their tokens on a blockchain network. These staked tokens are no longer fungible, but they validate the network’s transactions and keep it secure. Users then reap rewards based on the amount of tokens they staked. However, as CoinGecko points out, the actual returns can vary significantly.
“Staking yields are shaped by several factors. Each blockchain’s unique design influences the rewards, with networks like Ethereum prioritizing security, while Solana focuses on speed. The economics of the token, such as how new tokens are generated and the supply and demand dynamics, play a significant role in determining the staking yields,” the report stated.
Cosmos’ leadership here makes sense for several reasons, since ATOM has dominated market gains lately. As CoinGecko noted, more than half of its circulating supply is currently staked. However, this is not the only sign of network functionality; Cosmos is also home to interesting projects. For example, it’s hosting the first MiCA-compliant stablecoin.
A surprising variety of reasons can help explain a token’s staking yields beyond the aforementioned design capabilities like security or speed. Polkadot makes a point of offering high yields, even if this causes trouble behind the scenes. Tezos, on the other hand, is one of the oldest PoS staking protocols, and focuses on an easy frontend experience and a loyal user base.
Read more: 9 Cryptocurrencies Offering the Highest Staking Yields (APY) in 2024
Ultimately, the staking space in crypto accommodates a wide range of possible strategies. Ethereum and Sui have a 49-point discrepancy in their staking ratios, yet their yields are practically identical. In other words, there is no single formula guarantees the best long-term investment for potential users.