How to Stake Polygon in 2024

Formerly known as Matic Network, Polygon represents a highly secure and user-friendly blockchain platform. Backed by Binance and Coinbase, it offers a Layer 2 Ethereum scaling solution aiming to resolve the scalability problem and enable developers to create fast and interoperable decentralized applications (dApps).

Based on the proof-of-stake (PoS) consensus mechanism, the project has managed to achieve its goals. The network is capable of processing up to 65,000 transactions per second at negligible costs. In addition, it enables anyone to earn rewards while securing the network via Polygon staking.

Read this article to find out what Polygon staking looks like, which platforms support this option, and how much you can earn with its help.

Top Polygon Staking Platforms

	Name	Score	Visit	Disclaimer
	1Kraken	7.6	Visitkraken.com
	2Ledger	8.0	Visit
	3Binance	9.1	Visitbinance.com

What is Polygon Staking?

Applied to crypto, staking refers to the process of locking your assets in the network for a predefined period of time in order to validate transactions and make passive income.

Things are slightly different when it comes to Polygon staking, though.

Fueled by its native token MATIC, Polygon Network relies on the Delegated Proof of Stake (DPoS) consensus mechanism. It means that MATIC holders can delegate their tokens to the network validators who govern the network and validate transactions. For this job, the validators earn rewards and share their profits with other users with respect to the size of their contribution.

How does Polygon staking work?

In a nutshell, the process looks as follows:

1. MATIC holders lock up their tokens in a staking pool. In this way, they delegate their assets to a network validator.

2. The validator stakes these tokens on behalf of their holders for a predefined period of time to validate transactions and to make the network secure.

3. In the case of good performance, the validator earns a reward and shares it will all the delegators at the end of the staking period proportionately to the delegated sum.

4. In the case of fraudulent behavior, such as signing double-spend transactions, validators face penalties. The tokens at stake get slashed while the rewards become lower as well.

How decentralized is Polygon?

Interestingly, the maximum number of Polygon validators is capped at 100. At the time of writing, there are around 80 validators in total. The top 3 of them control about 11%, 10.5%, and 7% of the network respectively.

Some users on Reddit raised concerns about the overall level of decentralization of the Polygon Network. Yet, the project doesn’t have any plans to increase their number any time soon, assuming that this number of validators is enough to guarantee the security of the network.

How to Stake Polygon

There are various methods available for Polygon staking. Each of them comes with its own unique set of features, processes and, most importantly, requires a different level of knowledge.

In this section, we are going to give a brief overview of the top three ways that you can try if you want to make passive income while staking Polygon.

Polygon staking on a centralized exchange - Easy

Centralized exchanges, or CEXes for short, operate in a way that is very much similar to traditional banks.

They keep their users’ funds in a centralized vault which makes them prone to different counterparty risks. Yet, they remain one of the most favorable options among end-users.

What are the benefits of a CEX?

• User-Friendly Interface - Centralized exchanges are typically very convenient to use since they are designed to cater to a wide range of customers, including those who are just starting their journey in the world of cryptocurrencies.

• Integrated Services - Next, CEXes often represent all-in-one platforms where users can seamlessly buy and sell cryptocurrencies and enjoy a wide range of associated services. This eliminates the need to navigate between different platforms for the sake of various activities.

• Familiarity - Many users are already accustomed to using centralized exchanges for trading while the interface can be similar across different internal services. This familiarity can attract users who prefer a consistent experience.

• Customer Support - Centralized exchanges usually come with customer support that users can reach out to in case they come across any issues during the staking process.

• Liquidity - Finally, CEXes often have higher trading volumes and higher liquidity in comparison with decentralized platforms. This can be beneficial for users who wish to trade their staked tokens or convert rewards to other cryptocurrencies quickly.

In spite of all these benefits, centralized exchanges may still not be a perfect solution since they also come with some trade-offs in terms of control and security. When staking on a centralized exchange, users are essentially entrusting their assets to a third party, which goes against the principle of self-custody and control that cryptocurrencies aim to provide.

Decentralized solutions, on the other hand, empower users with full control over their private keys and assets, promoting the principle of true ownership and security in the crypto space. Therefore, thoroughly consider all the risks and benefits before you make a final decision.

Joining a Polygon staking pool - Intermediate

Staking pools offer an alternative approach to individual staking by allowing multiple users to pool their tokens together. These pools represent smart contracts aiming to enhance the overall staking experience. Thus, engaging with an established network validator for delegating your MATIC tokens can be quite a rewarding venture.

If you want to consider this method of Polygon staking, there is one more thing you should be aware of. With the overall goal of reaching full self-custody, the crypto community also generally recommends opting for staking through a non-custodial wallet. This approach aligns better with the principles of crypto and provides users with more control over their assets.

Becoming a Polygon validator - Hard

Another way of making a passive income via Polygon staking is to empower the network by running your own validator node.

A validator node is a computer or a server operating within the Polygon network which plays a crucial role in validating transactions. In exchange for this contribution, you'll earn staking rewards and a share of transaction fees within the network.

Polygon staking options compared

Where to stake Polygon

There are several centralized solutions that provide alluring prospects for cryptocurrency enthusiasts to partake in Polygon staking. Kraken, Binance, and Ledger stand out as top-tier choices.

Let's delve into the details of these three leading platforms and explore their offerings and benefits with respect to Polygon staking.

1. Kraken - Best for fee-free Polygon staking

Kraken, a prominent cryptocurrency exchange, introduced Polygon staking on June 29th, 2022. At the initial launch of the service, the platform offered an attractive Annual Percentage Rate (APR) of 14%.

Although the current APR has adjusted to a range of 5-9%, Kraken continues to provide a compelling opportunity for MATIC holders to earn passive income through staking.

Staking Benefits and User Experience

One of the notable advantages of Polygon staking on Kraken is the absence of network transaction fees for various staking actions. Whether you're staking, un-staking, claiming rewards, or withdrawing staking rewards, Kraken doesn’t charge any fees. This user-friendly approach simplifies the process and enhances the overall staking journey.

Moreover, Kraken's flexibility allows you to stake and unstake MATIC at any time, without the constraints of lockup periods. This level of freedom provides users with greater control over their staked assets, ensuring liquidity whenever it's needed.

Important considerations on network compatibility

While Polygon staking on Kraken presents an appealing opportunity, it's crucial to note that the platform supports only the Ethereum network for that. Depositing MATIC on other networks will result in the loss of funds. Therefore, users should ensure that their MATIC holdings are on the Ethereum network to take advantage of Kraken's staking offering.

With its competitive APRs, fee-free transactions, and the freedom to stake and un-stake at will, Kraken acts as a notable platform for MATIC holders seeking to maximize their cryptocurrency holdings through staking.

How to stake Polygon on Kraken

Before you can get started, you’ll need to create an account on the Kraken website and add some MATIC to it.

Step 1: Navigate to the Earn section.

Click on the Earn tab. At the top of the page, you can find the “Stake” and “Unstake” buttons that enable the staking procedure. Scroll down the page to find Polygon.

Step 2: Launch the Polygon staking process

Click on the “Stake” button on the right of MATIC. In the pop-up window, specify the amount you wish to stake and check all the details once again. Finalize the transaction by clicking on the “Stake” button.

Step 3 : Start earning rewards

You will see your transaction at the bottom of the page with the status “Initiated”. This will update to “Successful” after a few minutes and you can view your updated Tezos staking and reward balances.

2. Ledger - Best for asset security

When it comes to asset security, Ledger is one of the leading hardware wallets available on the market. The company develops cold storage for crypto that comes in the form of a flash drive and provides its users with an unprecedented level of security.

Ledger supports Polygon staking among other assets via the Ledger Live app, which is available on a mobile device. The process is not too easy, though, as it requires some specific technical knowledge with regard to how to operate a hardware wallet.

Worries aside, we are going to provide a detailed guide right below.

How to stake Polygon on Ledger

Step 1: Establish the Ledger connection

Connect your device to your computer and open the Ethereum (ETH) app on your Ledger device. The device should state “Application is ready”.

Step 2: Add an Ethereum account to the app

Find the section “Account” in the left menu. Install Ledger on your device to continue.

To do that, select the Ethereum icon and simultaneously press both buttons. Your Ledger device should state "Application is ready."

After these actions, your Ethereum account on Ledger and its ETH balance should become visible within MetaMask. Note that the visibility of your Ledger Ethereum account doesn’t mean that it is in MetaMask, since the wallets have different private keys. Your funds remain well protected by Ledger, which simply uses the interface of the MetaMask wallet.

Step 3: Connect the Ledger account to Polygon via Metamask

Go to the Polygon web wallet and connect the Ledger account to Polygon via Metamask. Press the button Connect Wallet to log in to Metamask. After that, your wallet is ready for Polygon staking.

Step 4: Choose a validator to delegate your assets

Do some careful research to find the most reliable one.

Step 5: Delegate tokens to the selected validator

Click the button “Delegate” on the right.

Step 6: Specify the amount you wish to delegate

Simply type the number of tokens that you’d like to delegate in the pop-up window.

Step 7: Finalize the process

Confirm the permission to complete the delegation procedure.

3. Binance - Best for the versatility of staking options

Binance, a prominent player in the cryptocurrency exchange landscape, stands out not only for its extensive trading offerings but also for its robust staking services.

Established in 2017, Binance has grown to become one of the largest centralized exchanges globally. Its key strength lies in the comprehensive ecosystem as it offers trading, staking, yield farming, and more.

Staking Polygon tokens on Binance provides investors with high returns through extended staking periods. The structure of MATIC staking offers greater crypto rewards to those who commit to longer lockup durations.

Thus, the available lockup periods are equal to 15, 30, 60, 90, and 120 days. At the same time, its anticipated Annual Percentage Yields (APYs) make up 2.5%, 3.6%, 4.5%, 4.9%, and 6.5% APY respectively.

How to stake Polygon on Binance

If you're new to Binance, you'll first need to create an account and complete the necessary verification process by submitting the required documents. Also, you will have to send MATIC to your Binance wallet or purchase some coins with the Buy Crypto tab.

Step 1: Go to Binance Earn

Go to the Finance tab on the top menu of the official website. From the drop-down menu, choose the Binance Earn section.

Step 2: Select MATIC

Scroll down until you find the needed option or simply type the name of the coin in the search field.

Step 3: Specify the amount and other details.

In the pop-up window, you may select a flexible plan with the opportunity to withdraw funds at any time, or a fixed term that implies staking Polygon for 15, 30, 60, 90, or 120 days. The rewards differ with respect to the staking duration.

Step 4: Double-check all the details and confirm the transaction.

To do that, simply click on the “Confirm” button.

Polygon Staking Platforms Compared

How much can you make staking Polygon?

According to the official Polygon staking calculator, the APR that you may earn while staking Polygon equals approximately 4.68%. This is the reward that you may expect to earn if you delegate your tokens to validators through an official Polygon website.

The rewards that you get via other means of staking may vary between 1 and 6.5%.

What factors affect your rewards?

Regardless of the method you choose, the size of these rewards is not set in stone. The amount that you may earn may change in time as it depends on a number of different factors, such as:

• The changes in the rewards distribution policy of the project - E.g., the rewards were reduced in 2022 after the project had successfully worked for two years

• The number of network participants - The rewards get lower as more users join Polygon staking, and vice versa.

• The number of MATIC tokens staked in the system in general

• The token inflation rate - As Polygon constantly mints new tokens, they are subject to yearly inflation of approximately 6-10%.

Also, since MATIC is a volatile asset, your reward will strongly depend on its current rate with respect to fiat currencies.

Is there a downside to staking Polygon?

The ROI that Polygon staking provides is surely higher than any other traditional financial institution.

However, high rewards often come along with significant risks. Consider the following aspects if you decide to earn passive income via staking Polygon:

• Security - Transactions on the Polygon network are just as irreversible as on any other public blockchain. Therefore, if some hackers steal your funds there will be no way to retrieve them. Make sure to protect your accounts through all the possible methods and follow internet security best practices to avoid such a situation.

• Protocol attacks - In August 2021, Poly Network faced one of the largest exploits in the whole history of cryptocurrencies. Although the ethical hacker returned all the funds later, this security event is surely worth remembering.

• Price fluctuations - Polygon’s native token MATIC is not a stable asset as its price is highly volatile and changes together with the overall market conditions. If the token price abruptly drops you will not be able to cash it out until the lockup period ends.

• Slashing - If validators to whom you delegate your tokens face penalties for misbehavior, their stake may be slashed together with your rewards. Staking Polygon via centralized exchanges is often devoid of such a risk, though.

• The lack of liquidity - Making use of your tokens while they are locked in a staking contract is impossible. This may be a serious drawback in case you have an urgent need for liquidity.

• Problems with regulatory bodies - The CEX where you stake MATIC may face local regulatory restrictions. In the worst-case scenario, the company’s funds may be arrested, and you may lose your funds.

• Counterparty risk - Entrusting your funds to a third party always comes with a risk of its failure. The CEX of your choice may be hacked or go bankrupt. Therefore, thoroughly assess its reputation and find out if it has ever faced any breach in the past before you make your decision.

Should I stake Polygon?

The decision to stake Polygon is totally up to you. Keep in mind the following factors when you consider Polygon staking:

• Taxation - In the majority of the regions worldwide, any crypto earnings are considered to be a taxable event. Failing to pay the taxes, in turn, may result in fines and penalties. To avoid such events carefully investigate how the law treats such questions in your region. Consider choosing the platforms for Polygon staking that enable you to export information about your earnings to facilitate the process.

• The level of your knowledge - If you are a newbie in crypto staking, you may prefer doing it via a CEX as this is the most simple and convenient option. More experienced users may select a staking pool while pros may choose to run their own node.

• HODL or trade - If you do not plan to sell your MATIC holdings any time soon and want to hold it long-term instead, Polygon staking may be a nice option to grow your portfolio. On the contrary, if you are an active trader, staking may not be suitable as your assets will be locked.

• The risk vs reward ratio - Honestly answer the following question: how high is your risk tolerance when it comes to investing real funds? If you do not get particularly depressed when losing funds, then Polygon staking may be a good choice for you.

• Security - As mentioned earlier, Polygon Network experienced some serious breaches in the past. Although the team of the project has surely fixed all the associated bugs, there is no guarantee that such a situation will never happen again in the future.

• Gas fees - If you delegate your MATIC tokens to a validator, you will also have to pay the network fees. As an Ethereum scaling solution, Polygon has managed to resolve the problem of high transaction fees. Yet, they may still be substantial when the network is congested which may have a negative effect on the size of your rewards.

Final Thoughts

All-in-all, Polygon represents a nice alternative for making passive income. If you hold MATIC long-term and want to put your idle assets to work, then Polygon staking is the best solution.

Staking via a centralized exchange is quite simple as such platforms typically cater to the needs of novices. Delegating your tokens to a validator is also not too complicated as the Polygon team strives to make the interface as simple as possible. If you want to become a validator yourself, though, you may need to enhance your technical skills first.

Regardless of the method you choose, the returns that you may earn will be much more lucrative than those offered by banks and other centralized financial institutions. Therefore, it is certainly worth considering.

	Name	Score	Visit	Disclaimer
	Kraken	7.6	Visitkraken.com

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