The Ultimate Guide on How to Stake VeChain (VET)

VeChainThor, or VET, is an extremely popular cryptocurrency, given its time in the market and its inclusion in the top 50 cryptocurrencies by market capitalization. With hundreds of thousands of wallets holding VET, many users wonder how to stake VET and make the most of their investment.

Luckily, VET is one of the easiest cryptos to stake and earn a passive income from.

In this article, we’ll take you through the ins and outs of staking VET, how and where to get started, and exactly how much you stand to earn by doing it.

Read on!

What is Crypto Staking?

Smart contracts have been one of the most dramatic innovations in blockchain technology since its inception, allowing the industry to shift from simply serving as an immutable ledger of payments to an entire ecosystem of immutable programs. Decentralized applications have been the result of it all, but under the hood, smart contracts have also allowed efficient staking.

Generally, staking is the process of locking funds into a smart contract.

Taking that a step further, though, staking a cryptocurrency means bonding coins to a network via a smart contract to secure them. Stakers can then run validator nodes on the blockchain, helping to decentralize it and taking part in network consensus.

Most cryptocurrencies designed to be staked incentivize it since staking secures the network and assures consensus. The blockchain’s new ‘blocks’ come with a block reward, and those who stake are the ones who benefit from this—leaving non-stakers essentially out in the cold or at the very least, suffering from an economic opportunity cost.

What is VeChain (VET)?

VeChain is a blockchain technology platform specializing in asset digitization, focusing on enterprise-grade and supply chain solutions. With a goal of mass business adoption, VeChain is known for already having significant partnerships with household names such as Walmart, BMW, Bayer, and PricewaterhouseCoopers.

Founded by Chinese blockchain firm BitSE, VeChain’s product offering is supported by its VeChainThor blockchain and token economy, which include VET and VTHO tokens. This dual-token economy intends to isolate market volatility from the cost of using the token—VET stores and transfers value. At the same time, VTHO serves as a gas token.

The VeChainThor blockchain uses a modified proof-of-authority consensus algorithm that uses a network of 101 validators called “Authority Masternodes.” These Authority Masternodes, or simply AMs, are fully vetted and approved by the VeChain Foundation.

How Does VET Staking Work?

As mentioned, crypto staking involves network validators putting up a bond in native tokens or coins to take part in network consensus. That’s also true of Authority Masternodes, who have to hold and stake a certain amount of VET in addition to passing muster regarding the vetting process.

AMs stake a significant number of VET tokens in order to take part in the block production process. On the other hand, you may not wish to devote quite as much capital to just the one token. You also may just be interested in the passive income angle, with running and maintaining a node being of significantly less interest.

Luckily, you don’t need any of that to stake VET. Staking VET is just a matter of buying and holding the token in the correct wallet. If you do so, your staking income will be in the form of VTHO tokens.

Every VET token you stake generates VTHO every 10 seconds at 0.000432 VTHO per VET per day or 0.15 VTHO per VET annually. It’s possible to increase the rate of VTHO generation if you hold 1 million or more VET in an official wallet.

You can either build up a position in VTHO and let them accumulate, or as many people do, use the VTHO to buy more VET and thereby compound your staking gains.

How to Stake VET

Even though staking VET is just a matter of holding it, you do need to choose the right wallet or venue. Not every wallet will allow you to claim your VTHO rewards, so let’s look at exactly how to stake VET for the best results.

#1. Staking VET Through the VeChain Wallet

The VeChainThor Wallet is a secure mobile wallet developed by the VeChain Foundation for iOS and Android mobile platforms. It supports both VET and VTHO as well as VIP180 tokens and contains a node management tool and built-in dApp browser.

All you have to do with a VeChainThor wallet to stake VET is hold it. You’ll be paid VTHO in regular intervals, and you’re not subject to any sort of locking or unlocking restrictions.

If you’re a high roller and have at least 1 million VET, you can claim Economic Node status. This ups your VTHO generation rate, and you can take part in VeVote proposals. There are three types of economic nodes, including Strength (1 million VET), Thunder (5 million VET), and Mjolnir (15 million VET).

It’s also possible to become an Economic X node by buying the node status NFT on the wallet’s trading marketplace for added benefits.

VeChain also features the native Sync wallet for all platforms, providing users with added functionality to the VeChainThor mobile wallets. Staking on Sync works exactly the same—just hold some VET, and you earn VTHO automatically.

#2. Staking VET Through Binance

Not every exchange offers you the ability to stake VET, and even those that do may change the terms offered by the network itself. It’s unlikely that you’ll be able to take advantage of the same 10-second increments and 0.15 VTHO per VET annually as with a native wallet, but some exchanges do offer competitive terms.

Binance, for instance, is a platform with a wide range of passive income options. For example, you can choose between multiple options when you want to earn a yield on your coins, from unlocked terms and daily rewards to longer term fixed deposits with higher rates.

The first step with Binance is to create an account and complete all KYC (Know Your Customer) protocols that the platform requires. Then, you can deposit funds via a bank or crypto transfer or simply use your credit card to purchase some VET before visiting the ‘Earn’ section for a VET staking option that suits you.

Note that Binance.com and Binance.us are different entities, and US-based Binance customers may have to register with the latter. This platform tends not to have all of the products and services that Binance.com does.

#3. Staking VET Through a 3rd Party Wallet

According to the VeChain website, several 3rd party wallets support VET and VTHO. You’ll need to check which of these offers the same easy staking system that the native wallets do.

Here’s a list of which 3rd party wallets support VET and VTHO:

• Arkane Wallet
• Atomic Wallet
• Cobo Wallet
• Ellipal
• Exodus
• Guarda Wallet
• MySafeWallet
• Trust Wallet

The more reputable of these wallets, such as Exodus, make it just as easy to stake VET as the VeChainThor and Sync wallets do. Visit the support page of your wallet if you’re not sure how to stake VET using it.

You can also connect most of these wallets, as well as Sync and VeChainThor Wallet, to your Ledger device in case you’d like to combine the earning potential of staking with the safety of a hardware wallet.

Benefits of Staking VET

Now that you know how to stake VET and which are the best wallets and platforms for doing so, let’s take a look at why you should consider it:

• Network security. Staking is crucial for any proof-of-stake blockchain since it secures the network and assures robust consensus. If you own the token, you’re probably interested in the well-being of the network—you can help ensure that by staking VET.
• Passive income. While it’s often tossed around as a buzzword, receiving a yield on your investment is quite nice. You can then decide what to do with the VTHO you receive—sell it, keep it, or buy more VET and compound your stake.
• Governance participation. While the threshold may be fairly steep, staking VET gives you a chance to participate in Vechain governance.
• Increased scarcity. While VeChain doesn’t have a long lockup period like other staking cryptos, more people staking means more scarcity. While a lack of liquidity may terrify Wall Street and various financial commentators, less VET on the market is good for your investment.
• Easy to do. Buy VET, move it to a non-custodial wallet, and hold it. That’s how to stake VET, making it much easier than with most other cryptocurrencies.

Cons of Staking VET

With the benefits of staking VET now clarified, the potential drawbacks must be investigated. There aren’t many, given that staking VET is easy and not subject to minimums, but some down-sides do exist, namely:

• VTHO token. Staking VET returns VTHO. This can be a good thing, since it gives you options, but VTHO may be considered a fundamentally weaker token since its supply is controlled by the VeChain Foundation. Its value is derived from the usage of the VeChainThor blockchain, which adds a variable element that could go either way.
• No lockup. While this is a good thing if you need to exit your position fast, it also means whales can do the same thing. If VET starts to crash, staking isn’t going to slow things down as it might on other protocols.

Potential Earnings From Staking VET

As mentioned, you can earn a set amount of 0.000432 VTHO per VET token you stake, paid out every ten seconds. To make things a little easier, a stake of 10,000 VET will return 4.32 VTHO daily, 30.24 VTHO monthly, or 129.60 VTHO yearly.

The good thing about this system is that you have several options for setting up your earnings. For example, if you believe in the VTHO token and think it may do well in the long term, you can keep your rewards in VTHO.

Alternatively, you could try and unlock the power of compound interest by selling your accrued VTHO to add to your VET principal. Compounding is always lucrative, especially if you believe the VET token is a better long-term hold than VTHO.

If you’d like to play with numbers a little, here’s a VET staking calculator that shows you how much you’ll generate and an approximate ROI at current market prices.

How Safe is Staking VET?

Many cryptocurrencies involve a lot of extra steps when it comes to staking, and staking to liquidity pools can be quite risky, given that the industry has seen several exploits in that regard. VET, on the other hand, is staked simply by holding it in your wallet.

In that sense, staking VET is just as safe as holding it. If you believe in the technology and reckon that the underlying cryptography isn’t going to be cracked anytime soon, then it’s very safe indeed.

Where the safety element starts to disappear, on the other hand, is with “exchange staking.” 2022 has shown the world that all the safety guarantees corporations offer mean very little when the music stops.

From the seeming malpractice of Celsius to the outright banking fraud employed by Sam Bankman-Fried’s FTX, plenty of crypto custodians are in trouble. Even “backed by the Winklevii” is no longer to be heard now that BlockFi is bankrupt.

So, if you stake VET in your own wallet, the security of those coins (and your wallet’s seed phrase and private key) is on you. If you choose to stake on an exchange, you’re putting your funds’ fate in a for-profit firm’s hands.

Key Takeaways

Staking is a critical component of how many modern blockchains work, and proof-of-authority chains like VeChainThor aren’t very different. The native token is key to the effective functioning of the network and for achieving consensus among validators, and by staking, you can help play a role in that.

With VET, staking is as easy as holding tokens in a non-custodial wallet. VeChain’s official wallets give you a staking return of a small amount of VTHO, VeChain’s gas token, every few seconds. Many 3rd party wallets also allow this, but not every exchange that sells and holds VET will do so.

How to Stake VET FAQ

• Is staking VeChain worth it?

  There are economies of scale at work, and the more you stake under a better class of node (Mjolnir X being the best), the more you earn. The VET staking ROI has historically tended to be around 1%, so you’ll need a significant amount of capital to make this a primary income stream.

• Can you stake VET on a wallet?

  Yes. The best way to stake VET tends to be on a native wallet like Sync or the VeChainThor mobile wallet, but several third-party wallets also allow VET staking.

• Can you stake VET on Binance?

  Yes. Binance is one of several exchanges that allow VET staking. Exchanges may have alternate terms when it comes to staking, though, and pay out different amounts of VTHO and at different intervals than you may receive on-chain with your own wallet.