Analysis of the "simplest way to stake" with Binance
Analysis of the "simplest way to stake" with Binance
Analysis of the "simplest way to stake" with Binance

By XawPublish | My token portfolio | 22 May 2020


Some comments about a recent article I wrote about my crypto interest in April recommended to invest in staking Tezos and Cosmos tokens. So, I've searched those tokens and the easiest way of implementing staking for my personal case. As already client of Binance, I've looked in details as what they claim to be "the simplest way to stake" and found out that what available on some review sites was wrong or obsolete.

What is crypto "Staking" ?

Staking is the process of holding crypto assets in a wallet in order to support operations happening on the blockchain of a crypto network. End users choosing to participate to staking are rewarded usually by some crypto interest in the same asset. So, as part of my token portfolio, I consider staking to be another kind of interest on my potential crypto assets.

That being said, staking can be implemented on an exchange like Binance or Coinbase or in a decentralized way using a personal wallet . The choice to use one or the other is a personal decision but here are a couples of pros and cons for the exchange:

Exchange PROS:

  • easy if already a customer of the exchange
  • can be cheaper than stacking using personal wallet with wrong intermediaries
  • can still easily trade staked coins

Exchange CONS:

  • can be expensive if using the wrong exchange
  • usually cannot participate to governance decision
  • not owning the private keys

Staking with Binance

Currently Binance let their customers start staking 21 different coins and they charge 0% fees on the interest generated by those operations. Binance does not let their customers participate to governance decisions but offers some additional interest bonus on some of those tokens. Obviously those crypto coins have very different history, usage and future. I'm not interesting in going in the fundamental details of all those tokens, I will simply compare some technical properties:

Binance staking coins

 The previous table includes a lot of useful information for all the tokens currently open for staking on Binance:

  • The 13612W momentum filter (see my previous post for details) allows to quickly see how a token is behaving recently. Positive values show positive momentum, meaning asset price is going higher.
  • The Correlation to BTC let you see if the token is highly or lowly correlated to Bitcoin. Asset highly correlated to BTC would go up or down at the same time than BTC. This value goes from -1 for asset highly inversely correlated to 1 for asset highly correlated.
  • The value/SMA200 provides the view of the current price of the asset divided by the simple moving average of the asset in the 200 last days.
  • The Announced interest is simply a copy-paste of the announced interest on the Binance staking page.
  • The Actual average interest is an average computed from the historical report of actual monthly interest. I colored here in red assets with interest lower than the announced interest, in green assets inline or even higher than the announced interest.
  • Last column is simply the sum of the capital return of the 12 last months and the average annual interest of the previous column.

Several conclusions can be done from that table:

  • Among the 21 assets available, 4 are fairly recent tokens without even one year of price history, and 2 are very recent addition in the Binance staking list.
  • Announced returned are not always attained, so checking the history might be useful.
  • The last column is not nice for the coins available on Binance, among the 21 coins, only two have actually positive returns when adding interest and capital return.
  • Theta provided the most return with 148% and seems to even have accelerated recently (876% 13612W filter !!!). This seems related to the upcoming introduction of the Mainnet 2.0.
  • Tezos provided a 77% returns in the last 12 months, still has a very positive momentum and seems to be uncorrelated to BTC which is interesting to potentially decrease the volatility of a crypto portfolio.

Conclusion

  • I did invest some of my remaining USDC into Tezos on Binance, more of that in my next monthly post.
  • I may invest in Theta but only if the momentum stays strong after the release in 4 days.
  • I don't plan to invest on any of the other currencies listed by Binance staking for the moment.


XawPublish
XawPublish

Crypto/Blockchain and finance enthusiast


My token portfolio
My token portfolio

This blog tracks the evolution of my token portfolio. In includes a transparent list of apps, services, tokens, transactions I'll be doing while trying to manage this portfolio.

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