VeChain (VET) is a business blockchain that works with some of the world's top companies like BMW and accounting giant Deloitte, helping them to streamline their supply chains by using blockchain technology. It is one of the biggest and best-known blockchain projects on the market.
VeChain runs a two-token model. The reason for this is to try to stop price speculation of the native cryptocurrency affecting the proper running of the blockchain. We can see this in cryptocurrencies like Ethereum, where the more popular the token is, the harder it is for the blockchain to function properly.
So instead, VeChain allows users to stake VET and earn VeThor (VTHO) tokens. VTHO tokens are used to power calculations and processes on the VeChain blockchain.
The easiest way to earn VET is through an exchange or specialised lending platform which stakes VET on your behalf. Rewards are then paid in VTHO directly to your account. Keep in mind that some services may lend your VET instead of staking it to generate a yield. In this case, you will be paid in VET, so make sure to double-check which token your rewards are paid in as this will vary between platforms and some platforms may even offer both. Unfortunately, our table does not provide this level of detail right now.
Use the table to compare rates on VET and forecast your earnings using the calculator provided.
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Staking is the method of earning a passive income on a cryptocurrency that you already own, by allocating or "staking" it on the blockchain.
It's easy to do and requires no extra effort once the process is up and running. That's why staking cryptocurrency like VeChain is so popular.
Staking VeChain is a way to earn extra yield on the cryptocurrency that you hold, and so is a really useful way to build up your holdings for the future.
For a beginner it might seem confusing, knowing how to stake cryptocurrency like VeChain, but thankfully there are a few simple steps you can follow to make sure you do it right.
There are two main ways to earn free cryptocurrency by staking VeChain. The first is to run a VET Masternode, and the second is to stake VET in a cryptocurrency wallet.
The first method is more involved and requires a lot more difficult technical knowledge, but offers bigger rewards. The second method is more popular with the casual user because it still provides a reward but takes less time and expertise to start.
In each system, users that stake their VET are rewarded with VTHO tokens, usually on a monthly basis.
Today we'll run through how to stake VET to earn cryptocurrency rewards.
The first method, running a VET Masternode, is relatively complex and requires a very large amount of VET tokens to begin with. There are four tiers of holdings, and the larger the amount you own, the higher the possible rewards. They are:
At the time of writing, even the lowest tier would cost US$200,000 to begin with if you were buying VET on the open market.
It's much more likely that you own a smaller amount of VET and want to earn some free cryptocurrency quickly and easily, so we'll run through that method now.
Cryptocurrency wallets are places that hold the cryptocurrency that you own, like a bank account.
There are lots of choices for free and secure cryptocurrency wallets that users can download and begin using instantly.
VeChain offers two official wallets, Sync is for desktop users, while the official VeChainThor wallet is for mobile on both Android and iOS. You can download it to your mobile phone or computer and start earning VTHO quickly.
In the mobile VeChainThor wallet you will generate VTHO every 10 seconds. As mentioned above, the maximum you can earn per VET that you own per day is 0.000432 VTHO.
It's worth noting that with other cryptocurrencies like Bitcoin and Ethereum there are things called mining "pools" where you combine computing power with others to increase the chance of winning rewards.
But with VeChain, earning staking rewards does not depend on computing power, so there is currently no way to pool VET with others to earn more VTHO.
There are a couple of free calculators out there which can help us work out how much we can earn with VeChain staking. The first is Thor Calculator and the second is StakingRewards.com. It is worth using a couple of different calculators before starting to stake VeChain to get a sense of how much we should be earning.
With Thor Calculator, just type in the number of VET you own and it will calculate the average annual return from staking.
StakingRewards.com shows us the average percentage rewards currently possible from the two types of staking: holding it in a cryptocurrency wallet or running a node.
There is not much difference between the two methods: At the moment (May 2021) StakingRewards.com says holding VeChain to earn VTHO tokens will get you around 1.34% per year, while running a node offers rewards of between 1.8% and 2.27% per year. But keep in mind that these numbers are constantly changing.
Staking VeChain is relatively safe as your VET is locked in a smart contract. However, that's not to say there aren't risks. Arguably the largest risk in staking is that the market price or VET or VTHO falls over the long term instead of rising.
As with all blockchain technology, there is still the risk of a vulnerability in the code somewhere (in this case, the smart contract used for staking). So while there is no history of issues with staking VeChain, there is always a risk when interacting with cryptocurrencies and blockchain technology.
The pros of staking VeChain are to earn yield on cryptocurrency that you already own. So instead of your holdings sitting in a wallet or on an exchange gathering dust, they are growing in value the longer you hold them.
However, when you stake cryptocurrency, it is locked away for a certain period of time, and so you can't also use it to trade, or for payments.
The main downside of staking VeChain is that you can't then use it for any other purpose once it is locked up. If you wanted to sell all of your VeChain holdings, you would have to pull it out of staking, thereby losing the rewards already built up for that month.
Staking VET is one of the easiest ways to stake, as the exchange handles most of the backend for you. You simply deposit your tokens and receive rewards. The table below contains a list of exchanges that support VeChain staking and payout rewards to users.
If you already own VeChain then learning how to stake it and earn free cryptocurrency can be a great way to improve your holdings without devoting extra cash to it.
The staking rewards for VeChain are quite low compared to other blockchains, so if you want higher rewards, you may want to consider staking a different cryptocurrency. For example, staking a cryptocurrency like Algorand or Tezos can earn you 6% per year or higher.
The two-token model employed by VeChain also means you won't be earning extra VET by staking your VET. Instead, you'll be earning VeThor (VTHO) tokens. That's a different situation to a lot of other staking reward systems out there.
And the price of cryptocurrency can go down as well as up, so only invest as much as you are willing to lose.
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