Just as 2019 was the year of the IEO, 2020 seems to be the year of staking. Exchanges compete to offer the biggest rewards. Which currency should you choose to maximize your earnings?
The cryptocurrency industry continues to look for new ways to offer value to investors. After the failure of the ICOs, the general disappointment of the IEOs and the unsatisfactory results of PoS mining, there comes staking – an investment tool for a maturing market.
Being able to earn a reward while maintaining control over your assets is the best of options. The overall predictability of these rewards is another: many cryptocurrency investors now prefer to get 10 to 12% per year instead of expecting a 300% increase.
At first, almost all stakings took place on specialized platforms like Stake.Fish and Stake Capital. But recently, large exchanges have come into play. Staking an exchange is the ideal solution for investors who are cautious when trying unfamiliar platforms and prefer to deal with well-established companies.
The currency range has also expanded. Along with the well-known Tezos, EOS and Cosmos, some exchanges now allow stake of stablecoins. This is a great way to protect your risks and achieve an ROI at the same time.
Let's compare some recent offers from popular exchange bets.
1) USDT Stake at Tidex
- Yield: 12% per year and more
- Pros: a winning combination of high rewards and zero volatility
Tidex was created in 2017 and is known for its low rates and a USDT loan program. USDT's new stake offer is the only one of its kind on the market. Tether is used to create a new stake in Neutrino (USDN) – a decentralized dollar-linked stablecoin that runs on the WAVES blockchain and is 100% supported by WAVES.
Stake neutrinos participate in WAVES mining, producing 10 to 20% or more, depending on several factors. Tidex converts the resulting rewards into USDT and transfers them back to stakeholders. The result is a high ROI on the most liquid stablecoin, the Tether – all with zero stake rates.
Rewards are paid daily, and users can withdraw at any time.
2) Stake of Tron at Bitfinex
- Yield: 6-8%
- Pro: you don't have to do anything – just hold the coins
Bitfinex calls its offering 'soft staking', which means that all you need to do is deposit coins into your exchange account and staking will start automatically. In addition to Tezos, you can stake Cosmos, Tezos, Algorand, EOS and VSystems. There are no stablecoins on offer, so your real income will depend to a large extent on price movements. For example, Tron has lost 43% of its value in the past 12 months, effectively nullifying any stakes reward.
Rewards are paid once a week, and there are no minimum requirements for participation. Bitfinex retains a small part of the reward as a fee.
3) Stake of Tezos at Binance
- Yield: 6-7%
- Pro: ROI better than other exchanges
With 23 currencies supported, Binance ranks second among exchanges in terms of the variety of staking offers (KuCoin has 24, although its stake arm is called Pool-X). Many of them are not well known, such as Komodo, Ontology and TROY.
Binance offers a higher yield in Tezos than in other exchanges: 6-7% per year, against 6% in Kraken and only 3-5% in Bitfinex.
Each user's reward is calculated based on their participation in the total amount of XTZ coins placed by Binance users throughout each month. Rewards are also paid monthly. The minimum stake is only 1 XTZ.
4) Stake of DAI at OKex
- Yield: 1%
- Pro: ROI is more or less guaranteed
In addition to Tidex, OKex is one of the few exchanges that offer stake in stablecoin. Instead of Tether, it offers stake in MakerDAO's decentralized DAI – stablecoin linked to USDT, but supported by Ether. By the way, starting in March 2020, KuCoin also presents the DAI stake, with daily revenue distributions. However, the yield appears to be close to zero.
The yield is only 1%, but at least you have almost 1% guarantee. OKex offers 8 more stake currencies, including: XTZ, ATOM and EOS. However, unlike Binance, you cannot use your cryptocurrency after placing it on stake.
What should you choose?
Countless experts say the current global crisis will increase the importance of stable currencies. With all the uncertainty arising from the COVID-19 pandemic, preserving wealth and hedge risks becomes as important as achieving high ROI. In that context, the placement of stablecoin may become the next best thing in investing in cryptocurrencies.
Certainly, the number of such offers is still very small, and Tidex's USDT product is practically the only one to generate a large stake return. But with growing demand, other exchanges will certainly follow suit.
This source of this article is portaldobitcoin.com.