IImagine your dog works every day to earn money that goes into your bank account. While that sounds like a great idea, it’s also far-fetched.
However, there is a scenario that is at least somewhat similar to this is a real chance. Just replace “dog” with “dog-inspired meme coin”. Here is the amazing amount of passive income you can earn from staking Shiba Inu (CRYPTO: SHIB) tokens
This dog will hunt
We’ll come to the amount of money in a moment. But first, let’s address an important question: what exactly is staking?
The idea behind staking is that you can earn rewards by staking cryptocurrency tokens. Your tokens are then used to help the underlying blockchain verify transactions. The catch is that the particular blockchain must use the proof-of-stake consensus mechanism, as opposed to the proof-of-work protocol.
At first glance, you might think that the old adage “this dog doesn’t hunt” might apply to Shiba Inu staking. After all, the token builds on that ether (CRYPT: ETH) Blockchain using Proof-of-Work protocol.
However, Ethereum is in the midst of a major upgrade to move to a proof-of-stake consensus mechanism. The beacon chain is already in place, bringing the ability to stake to the Ethereum ecosystem. It is planned that the Beacon chain will be merged with the Ethereum mainnet later this year. When that happens, it will enable staking for the entire Ethereum network.
dig up dollars
The bottom line is that you can wager Shiba Inu tokens. And you can make quite a bit of money with it.
I surveyed three cryptocurrency exchanges that support Shiba Inu staking. Below are the current yields for each:
Maximum annual SHIB staking return
Binance offers the highest annualized return. The number shown requires you to lock your Shiba Inu tokens for 120 days. Binance also offers an alternative that only requires a 10-day lockup period with an annualized yield of 10.12%.
Crypto.com appears to have the least attractive staking opportunity for Shiba Inu. You can currently get a 3% annual return by locking your tokens for three months.
ShibaSwap terms are the most complicated of the three exchanges. You must lock 67% of your wagered tokens for six months. However, the crypto exchange allows you to claim weekly rewards for the remaining 33%.
Exactly how much passive income you earn from staking Shiba Inu depends on which exchange you use, lockup period you choose, and how many tokens you stake. But it is currently possible to earn more than $1,200 in annual passive income for every $10,000 in tokens wagered. That’s a much higher amount than you can find with most other passive income generation methods.
To bark up the wrong tree?
While you can make an impressive amount of passive income from Shiba Inu, it’s not necessarily the best move. If the meme coin price falls during the time your tokens are locked, you cannot sell them. It is possible that your loss will far exceed your staking rewards.
Investors looking to generate passive income by staking cryptocurrencies should consider stablecoins such as tether (CRYPT:USDT). The maximum annualized return for staking the popular stablecoin currently available is 12.3%. Tether is much less volatile than Shiba Inu. Its price has barely moved up or down so far in 2022, while the Shiba Inu is down more than 40% year-to-date.
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Keith Speights has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Ethereum. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.