My STAKING Experiment: Is it Really Profitable?

My STAKING Experiment: Is it Really Profitable?

By insidetrader | HODL the Universe | 5 Apr 2020


As you know, there are lots of ways to earn cryptocurrency without trading. One of the most well-known way is ‘’Staking’’. So I wanted to try it and get some experience about ‘’How I gain more within this time?’’ via using Staking option on Binance exchange.

 

What is Staking?

When it’s 2010s, the only way to earn money is trading on stock and cryptocurrency exchanges or depositing some money to banks and gets fixed term interests determined by local central banks. But when we come to late-2010s, we learnt another way to earn money. It is STAKING. This has similar parts with depositing money to banks and getting interest but if you give your money into banks you can’t withdraw your money until the end day of the fixed-term interest. But if you deposit some crypto into exchanges and buy the staking-supported coins, you can also get some rewards for doing this actions which are your daily routine on crypto world. And these crypto assets are not locked until the end date. So you are able to withdraw these assets whenever you want. And when we check the major banks’ interest rates, these numbers are between -0.5% and 0.25% (These are the interest rates for BOJ, BOE, ECB and FED). These numbers mean that you deposit your cash into banks but you pay them for holding your money in their hand. I think that this is madness to give your money to banks for nothing an deven for accepting to lose some of your funds. Even though these features, there’re lots of dollars which are locked on these interests for 10 to 20-year time.

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Besides these characteristics of traditional bank interests, you can earn on crypto world really without losing any of your funds to get some cash. You only have to buy some cryptocurrencies and wait the day of the payment. Let’s further continue with my experiment.

 

Which platform I chose for staking?

I know there are lots of staking-based platforms which allows you to earn cryptocurrency with just waiting the payment date. But I chose Binance because nearly half of my crypto investment lie on Binance. After I decided to try staking, I started searching for stable coin to buy and HODL.

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The term ‘’stable’’ means that I will buy it at the rate of let’s say 10.000 sats and it’ll be available to sell between 9500-10.500 sats to guard myself from losing more than 5% of my funds while waiting the payment date. According to my opinion, I searched for all staking-supported coins on Binance 19 in number totally.

 

What are my criterias to select the stable one?

The first criteria is ‘’high return rate’’ or ‘’high annual yield’’. To select the best coin for staking, I decided this rate between 7-13% because for the higher ones it seems not stable, for the lower ones I can achieve this return rate with simple spot trading. So my candidates decreased to 6.

At second stage, I checked for the details of these candidates. Total and circulating supplies, the liquidty or exchange volume of coin, other utilization areas of that coins which further stabilizes the price etc… After these researches the total candidate number decreased to 4 from 6.

For the last 4 members, the only thing that I haven’t looked forward yet is ‘’the graphs for the related coins’’.  This is the last stage but is the most important step in my opinion to determine the stable one.

 

Which coin is the winner?

After all these steps, I chose the winner: ALGO/Algorand. The expected return rate 8-10% with the ''Initial Bonus''. And I bought this coin at 2600 sats 15 days ago and as you check it’s again between 2550-2650 sats. So in this 15-day period, I didn’t lose anything because of price reduction.

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When we came the results of staking, the real annual yield is 6,6%. It’s lower than my expected rate but I could ignore it.

My total HODLING amount of ALGO is 6629 which equals to 442 ALGO for each day. As you can understand from daily base of my ALGO amount, I invested totally 70$ for this experiment.

 

What is the total profit of my staking experiment?

As you can check the graph, I didn’t gain or lose much because of price movement. So the staking reward became more important for me.

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At 4th of April, the staking rewards distributed and I received only 0.91 ALGO as staking reward. When we check from market, it equals about 0,15$.

 

At the end, I want to point out that the staking process of ALGO is not as much profitable as I expected. So I need your suggestions about 2 topics:

-- Please advise me new coin/coins to invest my 70$ again

-- And please advise me other platforms which offers more staking rates.

Please comment your suggestions, thanks everyone who guides me for the future.

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insidetrader
insidetrader

Freelance crypto writer & translator


HODL the Universe
HODL the Universe

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