9 Best Crypto Staking Platforms Australia 2023

If you have just started to look into cryptocurrencies, you will likely have come across staking. Staking is a fantastic way to earn passive income on crypto assets without lifting a finger. Some crypto staking platforms in Australia allow users to simply start staking certain cryptocurrencies with the click of a button. 

At Coinware, we’ve done our research to uncover the best platforms to stake crypto in Australia in 2023. This guide has fleshed out each of these options but to summarise these are our top picks:

1. Coinspot – best Australian crypto staking platform
2. Binance – most available coins for staking 
3. Crypto.com – gain additional benefits from staking 
4. Coinbase – easy-to-use staking platform
5. Ledger – stake through your hardware wallet 
6. Nexo – interest-earning and crypto lending 
7. Finder – Australian stablecoin yield 

What is staking? 

Staking involves locking up your crypto on a Proof-of-Stake blockchain network to verify and secure transactions without the need for a central authority. Users who stake their crypto can then earn interest which is presented as a percentage of the coin they are staking. 

This is considered a safe and secure method to earn additional tokens on top of the crypto you already own.

The pros and cons of staking? 

What is the best crypto staking platform in Australia?

Below we’ve listed the 5 best staking platforms in Australia. We have compiled this list based on a number of factors including eligible staking cryptocurrencies, staking rates (APY’s), ease of use, lock-up periods and fees. 

1. Coinspot Staking 

How to use Coinspot Earn

Coinspot have made the process of earning/staking extremely seamless and easy. Simply select ‘Earn’ from the ‘Wallets’ tab at the top of your dashboard. 

Then choose the coin you’d like to earn on and select how much you wish to lend. Once you have confirmed this, you will be able to see your approximate payout amount as well as the rate of return. 

Visit our dedicated Coinspot staking page for more information or get a full review of the Coinspot exchange. 

2. Binance Earn

3. Crypto.com Earn

4. Digital Surge Staking 

5. Coinbase Staking

6. Ledger 

7. Nexo 

8. Finder

Mining vs Staking

The two most common methods of validating transactions on a blockchain network are mining and staking. Mining is conducted on blockchains that use a Proof of Work consensus algorithm, where as staking is the validation method used by Proof of Stake algorithm.

Mining (Proof of Work)

Blockchain or crypto mining refers to computers competing against each to solve complex mathematical equations in order to verify transactions on a network. This is key in Proof of Work (PoW) consensus mechanisms which was pioneered by Bitcoin and later adopted by other large blockchains like Ethereum, Litecoin and Dogecoin. The issue with this is that it requires large amounts of energy, which can be damaging for the environment. Proof of Stake aims to resolve this issue.

Staking (Proof of Stake)

Proof of Stake (PoS) is an alternative method of validation that is quickly replacing Proof of Work. Ethereum is currently in the process of transitioning from PoW to PoS in order to improve the scalability of the network and to reduce its environmental impact.

Instead of using computational power, PoS systems select a user to validate transactions and create new blocks. In order to be selected, users must stake a certain amount of coins.

Is staking crypto worth it? 

Staking crypto can be an effective way to earn passive income on your crypto holdings. Rather than letting your crypto sit in your wallet and collecting dust, you can send it to work and and allow it to make you money while you sleep. Depending on the coin you stake, you can earn up to 80% APY which is far greater than any interest offered by banks.

If you are considering buying a cryptocurrency just so you can stake it, it’s important that you conduct thorough research into the coin. After all, if a coin is earning 101% APY but it loses its value over time, the rewards from staking will not be enough to cover the loss in your investment. 

However, if you have conducted research into a cryptocurrency and believe in its underlying technology, then staking is an added benefit on top.

Is crypto staking safe?

Cryptocurrency staking is safe. The inherent risk from staking comes from the volatility of cryptocurrency. Crypto is a volatile asset class so if the price of the coin your staking decreases, the interest earned through staking might not be enough to cover your overall loss in value.  

Additionally, some staking and earn services, require you to sign a loan contract. When entering into any loan agreement, there is a risk that the company may not be able to repay their customers if they become insolvent. 

How can I stake my crypto? 

Staking your crypto can differ from platform to platform. The process, however, is usually quite simple, particularly on beginner exchanges like Coinspot. Simply sign up and purchase crypto through the app. Then navigate to the Staking/Earn tab and choose which cryptocurrency you’d like to stake. From there, simply select how much you’d like to stake and confirm your order. 

Is staking crypto profitable?

Staking crypto can be very profitable especially if done long term and the crypto asset you’re staking retains its value. Also, with staking you can unleash the power of compound interest. With some crypto staking platforms, your interest compounds daily. For instance, if you stake $10,000 Polkadot (DOT) over 10 years which has an APY of 12%, you’re ending balance will be approximately $189,000. 

Note: This figure are based on the price of Polkadot remaining the same over 10 years. 

Staking through a wallet vs staking through an exchange

The key difference between staking through a crypto wallet compared to an exchange is having ownership of your private keys. One of the most common sayings is ‘not your keys, not your crypto.’ This essentially means, that if you hold your crypto on an exchange, you are not in control of it. You may trust your crypto exchange, however, if it becomes insolvent, they may not be able to repay your crypto that you are either holding or staking within its platform.

Another benefit of staking through a wallet is the available options. Most exchanges (aside from Binance) will only have a limited number of eligible coins to stake. Depending on the wallet you stake through, you may be able to stake low-cap altcoins that are not available on all exchanges. The most common way to stake crypto through a wallet is by connecting it through a decentralised finance (DeFi) protocol. DeFi staking can sometimes offer higher APYs than those found on exchanges. 

Do I need to pay taxes on staking? 

Yes, crypto staking is subject to tax in Australia. Unlike profit made from buying and selling crypto, any rewards you receive from staking will not trigger a capital gains event (CGT). Instead, they are treated as regular income by the Australian Tax Office (ATO). 

As crypto staking rewards are paid out in cryptocurrency rather than cash, you must determine the market value of the asset when you receive it. The income from staking rewards will then be added to your other income and will be taxed in accordance with your tax bracket.

For example, let’s say you stake 1000 Cardano (ADA) which is equivalent to $1000 AUD and earn 60 additional ADA after one year. You look up the market value of 40 ADA which is equal to $60. The additional $60 that you have made staking ADA is now considered ordinary income for tax purposes. 

For more information on staking tax and cryptocurrency in general, visit this guide. 

Use Stablecoins to Hedge Against Price Inflation

Stablecoin yield has become quite popular in recent years as it can be used as a hedge against inflation. Inflation across the world has risen significantly in 2022 & 23. The inflation rate in Australia is at a 20-year high. Across the Pacific, in the United States, it’s at a 40-year high. 

Staking cryptocurrency can be an effective way to earn passive income, however, you’re exposing yourself to the volatility of the crypto market. Stablecoins are designed to be non-volatile as they are pegged to fiat currencies like AUD and USD. Though these currencies can still fluctuate in value, they are not nearly as volatile as cryptocurrencies. 

The interest offered on stablecoins is typically much high than the interest you can earn through a bank savings account. Often, the interest available from through a savings account is lower than the rate of inflation meaning you’re actually losing money in the long term. 

APY vs APR 

Annual Percentage Yield (APY) and Annual Percentage Rate (APR) are both terms used to calculate interest on staking and other earning products. Though they’re similar, these terms mean two different things and it’s important to know the difference when choosing the best platform to stake crypto. 

The key difference between APY and APR is that APY takes compound interest into account. It is the actual rate of return that you will earn from staking crypto and is a method for calculating the amount of money you can earn from staking digital assets over a year. 

For this reason, the APY is larger than the APR. 

Flexible vs locked staking 

Crypto exchanges like Binance and Crypto.com offer both flexible and locked staking. Flexible staking allows you to withdraw your unstake your crypto at any stage. Locked staking, on the other hand, means you must commit your crypto to staking for a specific period of time. Typically, this works in increments of 30 days (i.e. (30, 60, 90, 120 days). If you chose to withdraw your crypto before the locked term ends, then it is likely you will not receive any of the rewards you earned while staking.