How to Stake Dogecoin

This content represents the writer’s opinions and research and is not intended to be taken as financial advice. The information presented is general in nature and may not meet the specific needs of any individual or entity. It is not intended to be relied upon as a professional or financial decision-making tool.

Dogecoin staking is possible because the token uses a so-called proof-of-stake or PoS mechanism. In contrast to proof-of-work, where miners are rewarded for validating new transactions on the blockchain, proof-of-stake networks reward their users for delegating their digital assets to validator nodes. 

The more tokens you hold, the higher the chance one of your tokens ‘’is chosen’’ to validate incoming blockchain transactions and thus provide you with staking rewards. 

In this Dogecoin staking guide, we will explain to you in detail how Dogecoin staking works and what the best trading platforms are to do so. 

Pros & Cons of Staking Dogecoin

What is Dogecoin Staking?

Dogecoin staking basically boils down to putting your Dogecoin holdings to work by locking your Dogecoin up for a certain amount of time and receiving interest in return. Usually, this involves delegating your Dogecoin to a validator node by depositing your tokens into a staking pool. You can compare a Dogecoin staking pool with a high-yield savings account. 

All people that deposit their Dogecoin into the staking pool will receive high interest rates for doing so. The staking pool will use the staked Dogecoins to validate new transactions on the Dogecoin blockchain and thereby making it more secure and reliable. It is possible to stake Dogecoin because Dogecoin is a proof-of-stake token instead of a proof-of-work crypto like Bitcoin. 

Dogecoin staking pools often pay out the staking rewards in Dogecoin but can pay out in different cryptocurrencies like USDT, USDC, and other stablecoins as well. In most cases, you will receive your Dogecoin staking rewards daily, weekly, or monthly whilst the principal (your initially delegated Dogecoin) stays within the staking pool. 

You can unstake your Dogecoin at any given moment if you’ve joined a flexible Dogecoin staking pool whilst you have to wait for a certain amount of time if you’ve chosen to take part in fixed Dogecoin staking. 

How to Stake Dogecoin

Dogecoin Staking on eToro

eToro is the world’s largest social trading broker that allows you to take part in crypto staking as a way to generate a passive income with crypto.

Step 1: Set Up Your Account

Navigate to the official eToro website, click on ‘’Create Account’’ or log in with Facebook or Google. 

OPEN ACCOUNT

In the next form, you will have to enter your mobile phone number. Do this and click ‘’Identity Verification’’. You will now have to provide eToro with a photo of your driver’s license, passport, or national ID card and a proof of residence. Any utility bill or bank statement not older than 3 months will be accepted as proof of residence.

In some cases, eToro will ask for a source of funding. In this scenario, contact the eToro customer support and follow the instructions given.

Step 2: Invest in a Staking Asset

Log into your eToro account and navigate to the cashier area. Choose a desired payment method and specify the amount you want to deposit, Follow the on-screen instructions and finalize the deposit process.

Go to the trading platform, enter ‘’Dogecoin’’ in the search bar, and click ‘’Open Trade’’.

Enter the amount of money you want to invest in Dogecoin and click ‘’Buy Dogecoin’’. 

Step 3: Wait For Your Payout

After you’ve bought Dogecoin, you don’t need to do anything at all as eToro will stake your Dogecoin automatically. 

14 Days after the end of each month, you will receive an email from eToro which states your Dogecoin staking rewards. 

Whenever you wish to unstake your Dogecoin tokens, simply log into your eToro account and transfer your Dogecoin to any external Dogecoin wallet address or sell them to eToro.

Increase your eToro VIP Status to Increase Your Dogecoin Staking Rewards

You can increase your eToro VIP status to increase your Dogecoin staking rewards. All new members start out at the Bronze level, which are eligible to receive 75% of the staking rewards. This can be increased to 90% by reaching the Diamond or Platinum+ Club status. Your eToro VIP status increases by placing more trades and depositing more fiat money and/or crypto into your eToro account.

Note that 75% to 90% aren’t the actual APYs that you‘ll receive for staking Dogecoin at eToro. eToro’s Dogecoin staking returns have been estimated to be around 5% APY, not including costs or price charges. 

OPEN ACCOUNT

Dogecoin Staking Tax

All Dogecoin staking rewards you receive are subject to tax. The value of the received tokens as result of staking is calculated in British Pounds (GBP) and will be taxable as either miscellaneous income or capital gains in the UK. 

If you’re trading on your own behalf and not as a company, you can treat it as savings income and claim personal savings allowance to reduce your effective tax rate. It is also possible to apply capital gains tax on your Dogecoin staking rewards instead.

All individuals have an annual tax-free allowance of 12,300 GBP. Any profits above this allowance are subject to 10% tax up to the basic rate tax band and 20% tax on gains made above this basic rate. 

How to Pay Tax on my Dogecoin Staking Rewards?

You pay tax on your Dogecoin staking rewards by filling these in in your annual self-assessment tax return. You will need to specify the type of token that you have earned, the date(s) you have received them, the number of tokens you currently own, the value of your total token holdings in GBP, any associated wallet addresses, and records of the costs the staking pool charged you to stake Dogecoin.

Luckily, both eToro and Binance allow you to download a .csv file with detailed information about your Dogecoin staking regards. However, you will still need to fill in the other details required not provided in these .csv files. 

If you think you cannot fill in the annual self-assessment tax return honestly yourself, we highly recommend consulting a personal financial advisor. 

Why do People Like Staking Dogecoin?

It is no mystery that many people like Dogecoin in general as it is arguably the meme coin with the largest following globally. By staking a cryptocurrency, users increase the security of its blockchain by verifying new transactions. People like staking Dogecoin not only for the staking rewards this provides them, but also because they want the Dogecoin ecosystem to be as safe and secure as possible. 

Dogecoin Staking FAQ’s