There are several use cases for DeFi, which include banking, cross-border transactions and payments, betting markets, trading markets, and of course the ability to invest your holdings directly on the blockchain: Staking.
Staking is a new way of investing that can and often does bring unparalleled returns, which an investor just cannot get from inside the traditional banking and savings industries. Passive yield can be anywhere from around 5%-8% APY or more.
The Big Q: What Is Staking?
The Big A: a Stake is a form of voting right you earn after buying a certain amount of cryptocurrency coin which will allow you to vote. The size of your staking pool of coin will determine the power of your vote. Investors use this to push the companies to develop the areas they are interested in. The more coins you have in your staking pool, the more voting rights you get.
Plus, stake investors earn annual or monthly or quarterly returns from the company which they have staked in. The most common stake coin is Tron.
There are a lot of similarities between dividends and stakes. However, there are differences between investing in the 2.
1st dividends earn investors less money than a similar amount of stakes on cryptocurrency. This is because there is a physical backing to dividends on stocks. Plus, blue chips stocks follow strict regulations. This highly reduces the price fluctuations in the market.
So, stock dividends are easier to get into than crypto stakes. Stock companies are also transparent on the risks and profit involved, which reduces the responsibility of the investor since there is less management.
SmartUSD is more profitable than staking. AS there are fewer risks involved than staking since the market is less volatile than the cryptocurrency market.
Just like dividends, smartUSD requires less management in terms of research and education from investors. SmartUSDs are more accessible to set up than staking.
But, staking is free of charge but investing in smartUSD is a process which requires money.
You need tools to manage your stake research and trading. Here are our Top picks.
- For comparison and analysis processes, it is advisable to use; stakingrewards.com
- You also need a tool to analyze the price history, and it is advisable to use tradingview.com, although there is a bunch of similar tools online.
- Capital money: Yes, you will need initial finance to buy stakes.
- Any other information can be traced on Google, including how-to videos.
Before you venture into staking, please have a look at these tips.
- Analyze your desired asset price history. This will help you predict the possible price movement in the future. Pay attention to the entire process in general and not the profit alone.
- Create a solid ground to your decisions by conducting thorough research on the process of staking.
- If staking is not working for you, then venture into other methods of earning passively other than staking.
There are several advantages to staking, dividends, and smartUSDs trading.
1st it is an excellent source of passive income if you make it a side hustle. The investment also grows over time as it accumulates. This is ideal if you master the art of reading the market.
It requires little effort, unlike your 9 to 5 job. And it is the right way of saving your money since you cannot access your money when you own stakes. This reduces any tendency of overspending or wasting your money.
It gives you money management mindset over the yrs.
The Big Q2: Is staking worth the effort?
The Big A2: Let us have a look at Tron (TRX).
In Y 2018, the yrly stake yield of TRX was 7.00% which dropped to 4.37% in Y 2019.
Its yearly prices changed from 63% in Y 2018 to 17% in 2019.
Hang on, let’s have a look at the dividends in AAPL, which is a Bullish stock in a less volatile market.
In Y 2018, the yearly dividend yield was 5.90% which dropped to 4.8% in Y 2019
Therefore, dividends are easy to manage, which, unlike crypto stakes, requires keen management due to volatility. However, when done correctly, stakes can earn you better returns in the short term than dividends.
Have a prosperous day, Keep the Faith!