Staking cryptocurrencies encompasses various methods, networks, and objectives. Nonetheless, they all share a common feature: Staking tokens regularly rewards their holders with a proportionate portion of their stakes on the network or application.
This occurs because investors exchange their liquidity, locking their tokens under specific protocol-defined rules, for the privilege of direct participation in the system. This participation can take various forms, including becoming validators in a Proof of Stake (PoS) consensus, participating in protocol governance, or providing liquidity to decentralized exchanges, lending platforms, or collateralized assets. Importantly, maintaining liquidity incurs a cost, often referred to as “passive income.”
Notably, Artificial Intelligence (AI) text generators like ChatGPT, developed by OpenAI, prove invaluable in rapidly gathering complex information, aiding in the identification of financial opportunities and the selection of top projects from a vast pool.
In this context, on October 7, Finbold sought ChatGPT-4’s insight by asking it to “recommend three cryptocurrencies for staking.” In response, the AI highlighted Ethereum (ETH), Tezos (XTZ), and Cardano (ADA) as the most commonly staked assets for earning rewards, using its artificial intelligence capabilities.
Ethereum ETH
Based on information obtained by Finbold from StakingRewards.com, staking Ethereum (ETH) in order to become an Ethereum validator is currently yielding an annual return of approximately 3.71% on the staked amount. Additionally, the website computes the ‘real reward rate,’ which takes into account the token’s long-term inflation, and this stands at 3.34% per year for Ethereum.
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Significantly, as of the current publication, there is a collective stake of $44.57 billion on the Ethereum network, equivalent to 22.15% of ETH’s market capitalization, which stands at $200.74 billion. Over the past 24 hours, there has been a remarkable increase of nearly 14% in the total amount of staked tokens within the network.
Tezos (XTZ)
Through staking XTZ, investors can anticipate an annual yield of 5.18% based on the current network conditions and the staked amount. However, the ‘real reward rate,’ as computed by StakingRewards.com, reveals that the effective yield is, in fact, 0.92% when factoring in token inflation.
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In the past 24 hours, Tezos holders have reduced their token staking by a significant 17.17%. It’s worth highlighting that, as of the current moment, even though Tezos has a market capitalization of $644.87 million, a substantial 71.79% of that value is attributed to staked XTZ, amounting to a total staked value of $476.16 million.
Cardano ADA
As of October 7, StakingRewards.com data sourced by Finbold indicates that the Cardano network offers an annual reward of nearly 3% to its stakers. This stands as the lowest yield among the three selections recommended by ChatGPT-4, and it further diminishes when accounting for ADA’s token inflation, resulting in an anticipated long-term reward of 0.39%.
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The staking market cap for ADA currently stands at $6.08 billion, accounting for a substantial 63.32% of the total market capitalization of Cardano’s native token. Furthermore, at the time of this publication, the staking activity trend mirrors Tezos, exhibiting a negative trend with a significant 12.9% decrease in staked assets.