For many, earning on cryptocurrencies is associated with mining, where special computing equipment is used to solve cryptographic tasks with the aim of adding new blocks to the blockchain. For this work, miners are rewarded with new coins that can be sold or invested.
Is it possible to mine POL? In the traditional sense, mining on the Polygon network is not possible. The most well-known cryptocurrency that miners extract is Bitcoin. Its blockchain uses the Proof-of-Work (PoW) consensus mechanism — this is what allows mining crypto in the conventional sense. The Polygon blockchain network is based on the Proof-of-Stake (PoS) consensus mechanism. Here, the issuance of new tokens is carried out through staking — this is how you can earn POL. Let's find out how it works.
How does Polygon (POL) staking work?
Staking Polygon is the process of supporting the decentralization and security of the network by locking existing POL tokens in the blockchain for a specified period. In return for this participation, a reward in the form of additional coins is provided.
There are two ways to stake POL: become a validator or delegate your assets to another validator and earn a percentage of their profits. The first option, although simpler than traditional mining, still requires the crypto enthusiast to have a certain level of technical skills and a minimum cryptocurrency stake (the amount needed to participate in validation). Therefore, the second method is more popular.
Practically, it looks as follows:
- You are choosing a cryptocurrency wallet that supports Polygon;
- Buy POL tokens on a cryptocurrency exchange or in an online exchanger and transfer them to your wallet;
- Visit the official Polygon staking platform (or another platform, such as an exchange or specialized service, that allows staking this coin);
- Choose a validator from the list based on their reputation, yield, and fee (percentage of your reward for their services);
- You delegate tokens — specify the amount of POL, the lock-up period, and the terms of the deal, and then confirm the transaction.
You receive rewards for participating in the network by periodically requesting them through the Polygon platform (new tokens are not credited automatically, but accumulate);
Withdraw the received profit if necessary (unlocking POL takes several days — only after that can they be used).
The staking reward for Polygon depends on the number of locked tokens, the freeze period, and the current APY (annual percentage yield). The average rate for staking POL is around 4.5% per annum, but it can reach up to 20%: much depends on inflation, validator conditions, and other accompanying factors.
Why is staking POL beneficial?
The staking process of Polygon for ordinary crypto investors has several advantages over traditional mining. The key benefits include:
- There is no need for expensive equipment. The cryptocurrency staking process is similar to a traditional bank deposit — you just need to have assets on your balance and 'transfer' them to the management of the blockchain;
- Low entry threshold. For example, to become a validator in the Ethereum network, you need to stake at least 32 ETH. With delegated staking, it's much simpler — the minimum stake amount is 1 POL, making this format of participation suitable for everyone;
- Completely passive income. However, it is necessary to maintain the operation of nodes (computers connected to the blockchain and processing transactions) or monitor validation. Everything happens without the involvement of a delegate;
- Expected profits. The reward amount can be calculated in advance using special staking calculators;
- Income growth. Some crypto platforms have a feature for reinvesting rewards earned from staking, which provides the opportunity to earn even more coins.
However, before staking Polygon, it is important to ensure the safety of your investments. To do this, you should:
- Explore the platform that offers staking opportunities;
- Check the validator's reliability;
- Learn about all the risks of participating in staking;
- Do not trust smart contracts with unrealistic conditions, such as an inflated annual interest rate that does not match the market.
It is also important to carefully study the terms of cooperation with the chosen staking platform, as some of them may set their own minimum requirements regarding the number of tokens to be locked.
How to maximize profit from staking Polygon (POL)?
Staking is not just a way of earning passive income, but also an investment strategy. If approached responsibly, it can yield maximum profits. To increase your rewards, follow these recommendations:
- Choose a platform based on your goals. Some services allow for quick withdrawals but offer lower returns, while others provide higher interest rates for long-term token locking. Decide what's more important for you — liquidity or profit;
- Please pay attention to the token freezing periods. Platforms with a fixed staking period often offer higher rates, but your POL will be unavailable for the entire lock-up period. Weigh the pros and cons before making a decision;
- Distribute your assets among different validators. This will help minimize risks and protect your crypto capital in case of issues with one of the validators. This approach also allows you to test different staking conditions and choose the most profitable ones;
- Compare yield percentages and fees. Not all staking platforms are equally profitable — investigate what real profit you will receive after deducting all fees and commissions;
- Use reinvestment. If the service supports the automatic reinvestment feature, you will be able to grow your capital through compound interest, which will significantly increase your income in the long term.
Staking the Polygon token (POL) can be a reliable way to generate income, but it is important to remember that the cryptocurrency market is very dynamic. Before investing, it’s crucial to monitor the news, analyze staking condition changes, and thoroughly research all potential risks.