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Staking of a retail investor in the crypto world

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Passive income with staking is a great way for retail investors to grow their crypto assets , especially during sideways and bear markets like the one we have experienced in recent months.

Here is a great quote from Robert Kiyosaki , the author of “Rich Father Poor Father” :

“The key to financial freedom and great wealth is a person’s ability or ability to convert earned income into passive income and / or portfolio income.”

In February 2021, I wrote a piece called “The crypto story of a retail investor” , in which I recounted my journey into this nascent space , and in the section “Other income strategies” I gave an overview of some of the ways in which I passively continue to accumulate cryptocurrencies.

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I’ve already talked about yield farming here , while now I’ll talk about staking .

What is staking?

The staking system is a key component of blockchains that use the Proof of Stake (PoS) consensus mechanism . Think of it as analogous to mining Proof of Work (PoW) blockchains like Bitcoin or Ethereum , but without the unsustainable use of electricity and electronic waste of spent hardware like CPUs, GPUs and ASICs. 

I will use Cardano as an example as it is one of the most capitalized PoS blockchains and also part of my passive income strategy. Instead of investing money in mining hardware, in the Cardano ecosystem, investors buy the native cryptocurrency ADA and can set up their own stake pool or delegate their funds to one of the more than 2,000 stake pools that currently run the Cardano network.

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Setting up a stake pool and finding enough delegators to start producing blocks is a pretty big deal, so I recommend you look for a Stake Pool Operator (SPO) you like and delegate to them. 

To facilitate this process I started the Cardano SPO column here on Cryptonomist . A recent guest was Bio Pool [BIO] , which offers all delegates a way they can support environmental projects without impacting the rewards from staking .

The expected rewards are around 5% APY and are paid every Epoch on the Cardano network, which corresponds to 5 days. It is worth noting that the economic interest is compounded , which means that you also earn on the rewards already received.

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I have been staking on the Cardano network since the Shelley Incentivized Testnet in early 2020 and am quite happy with the passive ADAs I have earned , especially considering the ADAs have gone from $ 0.05 back then to $ 1.30 now. At the moment I am delegating most of my funds to 3 pools that I have also interviewed, namely: Ginger’s Pool [GINGR] , MADinArt [MAD] & PsyADA [PSYA] .

How to stake?

The first thing to do is to purchase ADA . This is quite simple as Cardano’s cryptocurrency is listed on many exchanges . I usually use Binance and Crypto.com, but Coinbase is also a safe option.

Some exchanges offer staking on their platform. However, as in the case of Celsius , this requires trusting the exchange. Furthermore, staking on a centralized exchange does not help the decentralization of the Cardano network.

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The safest thing to do is to visit the official website and download the Yoroi wallet to your favorite device. After creating a portfolio and securely writing down your recovery phrase, submit the ADAs from the exchange to the portfolio and open the Delegate section . Here you can explore all the different stake pools or search for a specific one by typing the ticker.

What I recommend that you do is find mission-driven stake pools that donate some of the income (without affecting the rewards of the delegates) to charitable organizations , so that you can have passive income while helping the needy at the same time .

The ADA rewards are very similar across all pools – around 5% APY as I mentioned above. Some stake pools also give NFTs or other tokens to their delegators as an incentive.

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It is important to note that when you delegate and stake your funds, they never leave your wallet and you are the only ones who have access to them, which is why staking from a hardware wallet like Ledger or Trezor is the safest method. absolutely.

The foregoing is for educational purposes only and does not constitute financial advice . The world of cryptocurrencies is still a Far West and there are many risks. Hacks, poorly written codes and rugpulls are everywhere . Assess your risk tolerance before making any type of investment.

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Binance

Binance’s Trading Volume Hits $100 Billion in Just One Day

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Binance continues to see unprecedent trading activity while attempting to sail through regulatory hurdles

Binance’s daily volume hit an eye-popping $100 billion on Oct. 20, according to a tweet by CEO Changpeng Zhao.

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The leading crypto exchange recorded this crucial milestone on the day Bitcoin, the largest cryptocurrency, reached a new all-time high of $67,276.

Despite introducing stricter measures for users due to severe regulatory scrutiny, Binance enjoys a comfortable lead over other crypto exchanges in both spot and derivatives trading, according to data provided by CoinMarketCap.

Eerier this month, the trading platform also announced a $1 billion ecosystem fund.         

Meanwhile, the decentralized finance sector is catching up with centralized behemoths. The total value locked in DeFi protocols has hit $100 billion for the first time.

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Crypto Exchange

Binance Smart Chain DeFi protocol PancakeHunny suffers flash loan attack

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As the users argue “what’s better,” Ethereum or Binance Smart Chain, the latter saw another decentralized protocol being exploited. PancakeHunny on BSC was attacked by a flashloan and no, this wasn’t a first for the protocol.

Blockchain security and data analytics company Peckshield Inc. announced the attack on Twitter.

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The last time that this protocol was exploited, was in June, wherein the team had noted the creation of a smart contract to exploit the Hunny Minter Smart Contract. The contract was subsequently executed 91 times, as per the team.

The team took a long time to respond to the hack this time but assured the users that their funds were safe. The team added in a preliminary report,

“On 20 October 2021, at 0920 UTC. A smart contract was created to exploit the Hunny TUSD vault. The Contract was subsequently executed 26 times.”

PeckShield provided some details about the same noting,

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According to the agency, this hack was possible due to a profit inflation bug, which converts the relatively small amount of harvested ALPACA, to a large amount of TUSD for staking. PeckShield added,

“These converted TUSDs are then counted as profit, now inflated to mint large amount of $HUNNY!”

Source: Twitter

Actions taken by the team

The PancakeHunny team has stopped the minting process for the TUSD vault while assuring that funds in Hives were all SAFE. The exploit did not affect other Hives and Vaults but the price of HUNNY.

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They added that the issue has been identified and the team will change its rooting to higher liquidity pools to prevent the aftereffects of price manipulation of LP pools.

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Coinbase

NBA Makes Coinbase Its Exclusive Crypto Partner

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Coinbase has joined FTX in scoring major partnerships in the sports industry     

The National Basketball Association has announced a multi-year deal with Coinbase, America’s biggest crypto trading platform in an Oct. 19 press release.   

Coinbase will act as the exclusive partner of the NBA, NBA G League, Women’s National Basketball Association (WNBA), and other leagues. 

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As part of the deal, the exchange will have a brand presence during televised games as well as unique content and activations that are meant to boost crypto awareness.  

Kate Rouch, Coinbase’s chief marketing officer, says that the company is proud of joining forces with the NBA:

The freedom to participate and benefit from the things you believe in is at the heart of Coinbase’s mission.  Nobody believes this more than NBA and WNBA fans. We’re proud to become the Leagues’ official cryptocurrency partner.

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The shares of Coinbase are up roughly 3% at press time. 

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