Raydium Staking: Earn Crypto Rewards Easily
by Tom Nyarunda
If you're considering making money from your crypto holdings in 2023 and beyond, this guide discusses Raydium staking and shows you how to make money from it.
There are different ways to make a fortune from the burgeoning cryptocurrency market. Most people have only heard about buying and HODLing crypto traditionally while waiting for prices to improve, but staking to earn passive income on idle cryptocurrencies in an ingenious method.
What is Raydium?
Raydium is a decentralized automated market maker (AMM) built on the Solana blockchain. It draws its liquidity from the Serum decentralized exchange (DEX). The platform facilitates trading digital currencies, like cryptos, via liquidity pools, which remain a significant feature in the Decentralized Finance (DeFi) circles.
Liquidity pools are made of individuals (liquidity providers) who lock their crypto in a smart contract to be used as trading pairs in markets for traders on the DEXs. An AMM protocol guarantees liquidity in a digital market, such as a cryptocurrency exchange. AMMs are designed to set asset sales and purchase prices automatically and are primarily used in predictive markets.
As an AMM, Raydium plays two fundamental roles. Apart from providing access to Serum’s order book, its algorithm is based on CFAMM (constant function automated market maker), a continuous function whose architecture is anchored within Solana and Serum.
What is RAY and how does it work?
RAY is the native token of the Raydium ecosystem. It was launched on 21 February, 2021, with an initial supply capped at 555 million tokens. The RAY development team apportioned and locked up 20% of the supply that couldn't be sold for three years. One-third of the total RAY token supply (188 million tokens) is available for mining, and it's estimated that block rewards will be halved every six months. In the same vein, 0.03% of transaction fees earned on the platform are reserved for Raydium staking rewards.
What can RAY tokens be used for?
Holders of the RAY token can generate interest, totaling up to 0.03% of the platform's total trading fees, via Raydium staking, besides getting some limited rights to intervene partially in the protocol's governance. RAY holders can also vote for proposals on amendments and issues submitted to the community. The size of a user's voting power is determined by the amount of RAY tokens they own. You can buy RAY from numerous leading cryptocurrency exchanges where it's listed or directly from the Raydium website.
What is Raydium staking?
Staking in crypto is a process similar to the mining function. Participants are selected to add blocks and establish the validity of transactions for which they get rewarded in crypto. While the exact implementation may differ for different projects, participants lock in their tokens for a specified period to guarantee that they will act in good faith and not violate the rules.
If you're a long-term crypto holder, Raydium staking can work for you by generating passive income instead of you letting your digital assets gather dust in your wallet.
Moreover, staking contributes to the security of the Raydium protocol, making it resistant to attacks as you strengthen its transaction processing ability. Staking Raydium in its farms of fusion pools also enables you to earn more RAY tokens. Currently, stakers can make an annual percentage return (APR) for staking RAY at 9.84%.
How to stake RAY
Raydium staking is a straightforward process that takes three simple steps:
Select your favorite crypto exchange.
Buy RAY tokens or transfer your coins to your crypto wallet.
Stake, and wait to start earning.
You can also stake directly on the Raydium website by clicking the STAKE tab and confirming the transaction.
Your RAY token rewards will grow depending on the current APR against the RAY vault. You can collect your accrued rewards at intervals. At this point, you withdraw your original staked amount plus the earned rewards.
Is staking Raydium a good investment?
Since the character of cryptocurrency experiences a wavelike motion, there's every chance that the price of RAY can appreciate and get to an all-time high as the crypto winter thaws. Should the price of Raydium increase, it could generate good returns, giving Raydium staking a good long-term earning potential.
Tom is a freelance writer with over 15-years’ experience in content creation, blog writing, and SEO specializing in the blockchain and cryptocurrency niche. He is a philosophical figurehead who believes that to make our world a better place, we must invest in incorruptible products and procedures, of which Bitcoin and other cryptocurrencies are leading examples.