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There are many terms used in cryptocurrency, terms that may seem a little more complicated than the functions they describe. “Staking” is perhaps one of these. This is not least as the term is often associated with gambling, or investing in more sophisticated asset classes - like funding a brand-new company, for example.In the world of cryptocurrency and digital assets, however, “staking” simply means depositing, or paying your digital assets into a protocol or platform. Users typically take the digital asset or assets that they own and want to make a return on, and invest them into a project (protocol) that gives them some sort of reward in return.
As is ever the case in this emerging financial ecosystem, however, where you stake your digital assets makes all the difference - both in terms of achievable returns, overall security of your assets (known as credit and counterparty risk in traditional finance) as well as the level of complexity you might face when you do stake. This, combined with your own personal objectives will determine whether staking crypto really works for you.
Staking with a digital wealth management platform
At its most basic level, a user can stake their cryptocurrency with an exchange or digital wealth manager in return for an Annual Percentage Yield, or “APY.” At digital wealth management platform YIELD App, for example, users can stake, or deposit their USDT, USDC, Ether (ETH) and Bitcoin (BTC) in return for a base APY. This can then be boosted depending on the amount of YLD - YIELD App’s native token - that they hold in their wallets.
This model means that YIELD App users are handsomely rewarded for depositing their digital assets with the platform, with up to 20.5% available on the US dollar backed “stablecoins” USDT and USDC, up to 16.5% on ETH and 12% on BTC.
Similar staking systems can be found at a number of different platforms, from top-tier centralized exchanges to other DeFi exchanges and companies operating in the decentralized finance ecosystem. Most will offer different APYs depending on the digital asset a user stakes, how much they stake and how they choose to be rewarded.
This is by far the simplest way to get involved in passive income building with digital assets. This is particularly the case with YIELD App, whose streamlined web application and easy to understand tier system is a user friendly option for those new to crypto. In addition, YIELD App has a number of safeguards in place to protect assets, including an in-house insurance pool and advanced systems and security.
Staking with a DeFi protocol
Those with a little more experience in cryptocurrency may look to stake their digital assets in other ways, including through completely decentralized finance (DeFi) platforms and protocols that reward users in other digital coins and tokens. These include DeFi exchanges and market makers, where users can become “liquidity providers” by staking their digital assets into the platform’s liquidity pools in return for LP tokens that they can then stake in different pools on the platform or other platforms for more and more rewards.
The above is the beginning of a process known as yield farming, through which experienced DeFi users can build complex strategies using staking - as well as borrowing - but which involve a large amount of time and organization to maintain. A self managed approach like this requires significant time, research and a clear understanding of the associated risks, in particular how slippage and impermanent loss can affect the value of ‘staked’ assets.
Ultimately, how you choose to manage your cryptocurrency will depend on your level of experience, the type of assets you have and the sort of return that you want to make. If simplicity and high returns are most important to you, it is likely that staking your crypto with an exchange or a digital wealth management platform will be an attractive option for you. If you prefer to take a little more risk and explore the DeFi ecosystem, staking and yield farming may be attractive. The key will be to assess your own needs and set your own objectives.
About the Company: YIELD App believes that everyone should have access to the best investment opportunities. Its mission is to unlock the full potential of digital assets, combine them with the most rewarding opportunities available across all financial markets and make these available to the world. To achieve this, the company provides an innovative wealth management platform that bridges traditional and decentralized finance in the easiest way possible. For more information, visit www.yield.app
Contact Info:
Name: YIELD App
Email: Send Email
Organization: YIELD App
Website: https://www.yield.app/
Release ID: 89046643
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