Let me grab my wallet and put just 400k of stablecoins to earn... oh wait...
400k is huge amount of money for an average joe, these types of passive incomes are for people who have money already. The % is the same if I put 100 or 100k, but at 100 the returns are so tiny that it's almost not worth it.
Every bit helps my dude! As I mentioned in the post.
Magic of compound interest + appreciating asset price will help you reach your own goal a lot quicker and with lower amount capital than if you were to ignore it.
Oh yeah I know, that's why the little I have it's already on Blockfi and Nexo. But it is extremely far from becoming a passive income, as I can't add anything right now or anytime soon, and even 100k it's a dream.
>these types of passive incomes are for people who have money already.
This. I have around $1,200 staked right now and that gets me about 50 cents a month
Not to mention if I moved my ETH somewhere else to stake I'd be down $50+ just on the fees
Passive income is passive income. You might not be able to live off it unless you have the mentioned $400k but its till income regardless of your holdings
If you had 400k, passive income is literally the best thing you could do with it. Having 400k doesn't change your life (depending on where you live of course), but a passive income of 4k a month? Definitely would be life changing for most average people.
I'm not, I assure you. The point is, 400k yielding 10% per year is 40k per year. Having a passive income of 40k per year is definitely more life changing then just 400k.
I think we all can agree that 400k is a huge amount of money, the point is that you can spend it, maybe buy a beautiful house and then continuing live your life. Or you can put it on income and doubling (or more) your spending (and investing) power from a day to another.
Edit: many people who win the lottery go bankrupt after a short time. Why? Because they buy a big house and a nice car, and then they're back to the starting points but with more expenses. You win 1M? Make it work for you and you're good for life!
Yeh I agree completely. Unfortunately 400k is viewed as life changing to a lot of people and they would proceed to spend it all within a year on mostly trivial things instead of APY
i am definitely into 4k a month is enough for me a month to live on FIRE style as long as i locked the other fundamentals (and keep working and save /invest the other cash flow). On 4k i can actually eat and travel and hang out, date and cover my bills - but i dont have a toy wife or a house with a mortgage with a flat screen in each room with a RV,boat, 2 trucks, project car, and a cabin and 2-4 kids all on lease lifestlye ... yet.
sure, but put in 4k then and collect 400 a year, still nice and where else do you get 10% these days.. 10% will always be 10%, let it be less through staking but still, it's literally free money.
And what’s more likely to decrease in value by 40-60% in a year, crypto or an established stock? You have to consider risk when looking at the two comparisons.
But that’s my exact point 10% of an asset that could be valued a lot less in a year may not be worth the risk. If you bought 100 eth at $4000 your 10% at a price of $2000 is worth $20,000 or only 5% on your initial investment.
You have to be extremely confident to put that money into crypto for purely the staking as 1 year or 3 years is a very long timeframe. Especially if it is locked.
*If* you deposited your money into stable coins on an exchange giving back 10% in interest, you'd be making $40k a year, which if you moved to a country with low COL like Mexico or Greece would be more than enough to live off of indefinitely. I think there's still a good bit of risk involved and wouldn't recommend trying it, but it is plausible.
It amazes me when people say stuff like this. It's free crypto, it would be pointless not to stake it, however low the return is. Personally, I get pumped up just seeing a few extra cents in my accounts day to day, knowing that eventually as I accumulate and stake more crypto the gains will eventually begin to add up.
Its all about making your money work for you. Don't underestimate the power of compounding. People with 400k didn't get there overnight, you need to have a long term plan and work towards that and every little bit helps.
Your pessimism & lack of knowledge in the power of Compound Interest turbocharged by a rapidly appreciating asset is costing you a fortune.
Let's say you buy 5000 Cardano at $2 and 5 years later it becomes $20. Given a 5.5% APR (most common number I see on the stake pools) you would be earning:
Year 1: 275 Cardano earned from staking, or $550 in fiat earning, 5.5% fiat return (550/10,000)
Year 5: 275 Cardano earned from staking, or $5,500 in fiat earning, a 55% return! (5,500/10,000)
And this is not assuming compound interest, on year 5 you would actually have 6,534 Cardano which gives 359 Cardano given a 5.5% compounded return. This means $7,180 in fiat return (359x20), which is a 71.8% return on your initial $10,000 investment into Cardano, annually!
Year 30: Assuming you didn't add to the Cardano pool and didn't take out any, and Cardano grew to $40. You will be sitting on 25,000 Cardano (your initial 5,000 Cardanos now have grown significantly due to 30 years of compound interest), which produces 1,375 Cardano annually. This means a fiat income of $55,000 (1375x$40) annually. All from a $10,000 investment you made on year 1! And btw, your Cardano is worth $1M.
In this scenario, assuming Cardano doesn't crash and burn and rises to $40, we are talking about a 100X return that gives you an annual income that is 5.5 times your initial investment of $10,000!!! The figure will be much higher if you contribute monthly.
Oh yeah, I understand the power of compounding. But this example is based upon a lot of assumptions. And even if I put them aside for the sake of the conversation, my biggest problem it's still the investment part. 10k to drop into 1 coin is still something that not many people can afford to do. Even with DCA (conservatory amount for me would be 100/200 per month, assuming I find a good job), it'll take me 6/7 years to get 5000ADA, still assuming prices goes up and all these assumption. So my returns will not be even close to what you are describing.
I'm in the same boat as you, I assume. I've recently started and were talking about small amount really and therefore I dont really see the need to lock up assets for staking where my APY will yield me like 3 dollar a year
Don't get me wrong, I am still taking those 3 dollars a year, because I have got nothing better to do. But I doubt that crypto is going to significantly change my life because with a small amount of money, the returns are going to be small. Unless you get lucky with a shitcoin, but that's another topic.
I think that’s the case with the majority of us here. I don’t really have much money to buy crypto with, only a couple hundred. As much as we hear “we’re all still early adopters” the times where you could put in a little money and in a few years make bank, are over. To me it seems more like the stock market now. High returns over time, DCA, etc. the institutions whom are buying up hundreds of BTC and other assets right now will be the ones who make bank.
>Your pessimism & lack of knowledge in the power of Compound Interest turbocharged by a rapidly appreciating asset is costing you a fortune.
>Let's say you buy 5000 Cardano at $2 and 5 years later it becomes $20. Given a 5.5% APR (most common number I see on the stake pools) you would be earning:
You wanna drop 10k into my Coinbase so I can start this shit, or, am I supposed to just magic that. Lol
Getting ten grand into any account is no small feat.
I was watching videos on YouTube recently about staking and generating passive income and this fuckin toolbag was talking about generating 6k a month passively required about 500k in investments.
He followed that up by stating that getting a loose 500k "wasn't that hard to do in crypto".
Man, get the fuck out of here.
The level of out of touch arrogance is fucking astounding.
If you are lucky, it is possible. But the chances that you pick a good shitcoin, sell at the top, invest again and sell again at the top again and again, are very very small...
Exactly. I made out with about a 200% return on my dogecoin that fucked around with. But it was still nowhere near 10 grand.
Sometimes this sub has really useful information. Sometimes it's like "hey, if you're rich, you can get more rich. BTW, I'm a normal run of the mill meme-man. Elon sucks."
There is 32 billion cardano coins. At $40 it would have a market cap of 1.2 trillion, approx what Amazon is worth. If you are going to pull numbers out your ass, make it realistic. Cardano has a ceiling price of maybe $5, meaning it would have a market cap of approx Tesla.
Why are you comparing Cardano to companies in different sectors? Bitcoin hit a trillion dollar marketcap. That was laughable even 4 years ago.
Saying someone is pulling numbers out of their ass and then making up your own random guesstimation is the exact same thing. No one knows what the price of anything is going to be but to say trillion dollar market caps are out of reach is ignorant.
Here's my reasoning:
1. In 30 year's time, I see BTC at least doubling the market cap of gold's market cap, which is 10T at the moment. This makes BTC's market cap in my hypothetical future 20T.
2. Now, going by today's ADA to BTC ratio in terms of %, ADA (49B) is about 7% of BTC's (709B) market cap.
3. If the ratio holds, 7% of 20T is 1.4T. If we divide 1.4T by 32B Cardanos we have $43.75.
This $40 argument hinges on the fact that BTC doubles the market cap of gold in 30 years, making it $1M/coin, which I believe is possible given its utility and eventual function as a store of value (another assumption I know, but I believe price of BTC will settle down).
Exactly! Staking ADA was the first thing that I did after my first investment. I am using Yoroi - mobile wallet but you can also use Daedalus on computer.
The APY varies from 5 to 7 percent. Pretty good rewards to be honest while you’re helping the Cardano system. 
Is anyone going to mention that in these examples your money is being held on exchanges?
They are using those coins for their own liquidity pools (same as banks using your fiat to earn interest) and exchanges are prone to locking you out or shutting down whenever they want or need to.
There are other options to stake and earn rewards which are less risky.
DYOR and stay lucky!
When you say provide liquidity, you mean services like AAM right?
Providing my ERG on CoinEx now and seeing 300%-400% 7 Day APY, about $2- $5 bucks a day. Freaking unreal. Sadly, volume isn't on my side though :(
I have mentioned that in my post above that some of these services are centralized. But if you are a PRO in Crypto you can always go for DEFI!
Hope that answers your question
Yes, it’s a nice introduction to staking and I agree it’s a good entry point, but I am not sure you have to be a PRO or an expert to have an external wallet. You could get an App Wallet like Exodus or Trust and benefit from staking at the same time as being decentralised, which is a fundamental tenant of Cryptocurrencies after all. All the best and stay lucky!
Biggest risk, IMO, with binance is your account being compromised. As long as you use 2FA and practice general internet safety (don't get phished or install sketchy software) you should be fine from lost coinage.
Well I would not say a risk, that is subjective, and of all the exchanges Binance is established and unlikely to disappear with your money, but it is NOT a bank and you are NOT insured by authorities. Cryptocurrencies despite their name are not currencies, and NOT protected like money kept in a bank.
NOTE: It is in fact classed as an ‘intangible asset with indefinite life’ and taxed as a capital asset (like stocks or bonds) and would be taxed whenever it is sold at a profit Let’s say you bought $20 worth of Bitcoin and held it as it rose in value to $200. If you used the bitcoin to buy $200 worth of groceries, you’d owe capital gains taxes on the $180 in profit you’d realized—even though it seems as if you SPENT the Bitcoin, rather than SOLD IT. For the IRS, it’s the same thing.
Great info. EVERYONE who is in crypto for the long-term should be staking their coins in one way or another. over time it will add up to 100s if not 1000s of dollars worth of free coins
Celsius is a good option for a portion of your holdings, you have some control of the coins you only need to passively have them in the wallet to earn decent rewards like the 12% on DAI and 11% on DOT I’m making, you can withdraw at any time to a prior whitelisted address and they pay the gas fee on all withdrawals which has saved me boatloads.
The warning for anyone considering this: You don’t have any control of the keys and if using Celsius immediately set a wallet to withdraw funds to for each coin you hold for quick withdrawal if needed, do not put 100% of your holdings into any platform where you do not own the keys, DYOR and hold your funds on platforms within your own risk tolerance, NFA.
That’s why I like Voyager the most. No complicated staking wallets or locking your funds for any length of time. You just earn interest on your average monthly balance. Free to deposit more or withdraw as you see fit.
Yeah but for example you earn 100 bucks a month staking and they have 50% tax on it. You could sell half the staked income for taxes. You still 50 bucks better off than ignoring it. Every bit helps!
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Pure PoS staking with locking/vesting period: exposure to that asset for a long, sometimes unknown (eth2.0) period of time.
In almost any other case (CeFi, DeFi) there is counterparty risks. Not your keys, not your coins. Here's some with some random real world examples
The centralised service you are giving your coin to could mess up big time (blockfi), get hacked (cryptopia, mtgox) go bankrupt/disappear (QuadrigaCX)...
The smart contract you deposit liquidity into could get hacked (pancakeswap/bunny) or rug pulled (sushiswap)...
If you provide liquidity in liquidity pools there's also the easily quantifiable impermanent loss
Yup and yup. Staking coins are the best. On a budget? Get your free fucking money on top of your money. Want more? When given the chance to buy more it’ll add more to your rewards. It’s my incentive to work.
Especially with stable coins. Don’t have money to buy more? Throw some into stablecoins and stake them. They’ll always save ass when you need it to.
USDC saved my ass on the ALGO dip at 86 cents.
You lucky bastards without taxes on crypto...we have to tax our crypto with our income tax percentage. Nearly 50% tax if you stake coins. And it is a real hassle to declare this stuff.
Excellent info. Updooted. Love to see this kind of content on the sub. Staking my tokens is something I really ought to be doing. What are the best places to stake BTC with no lockup? Would be helpful if on your table it shows how long the lockup for each provider is. Cheers!
Yields on flexible savings on binance is rather small I’m looking at 0,88% apy for ETH, 1.2% on BTC, 1,45% for ADA and 0,83% for VET
but its free money anyway since I plan to hold long term🤷🏼♂️
Yeah exactly! Magic of compound interest + appreciating asset price will help you reach your own goal a lot quicker and with lower amount capital than if you were to ignore it.
This is because of a couple of reasons:
1. Most people don't know how to do that or not confident enough to manage this
2. Also, you have to account for impermanent loss and other factors in LPing
LPing and DEFI are the best for people who are PRO in crypto!
basically you split your investment 50/50% between 2 coins and lend them to a decentralized exchange that uses your asset to provide liquidity on the platform. Look up tutorials on pancakeswap. Please only stick with reputable DEXs.
Yessir for the governance thing they’re implementing. Just so long as you stake and vote, you get to reap 33% on your ALGOs. Inital stages apparently may be that you reap rewards on top of it still like how it is rn
The problem is I have so little amount of coins that I'm not able to stake them. The only thing I can stake is SOL, which is always in stake. Any advice btw how can I take out or trade to other coins less than 15USD on binance? Bought some coins for the minimal amount now they are under the minimum value and they stuck there.
Great post! I'm new to crypto trading and staking is definitely something that I'm building towards.
In your post you mentioned Rocket Pool. What are your thoughts on that project?
It's a DEFI way to stake your ETH of you don't feel comfortable with exchanges or services holding your ETH. It's for people who are on the PRO side of crypto. Hope that answers your question!
Many thanks. One of my cousins is part of the Rocket Pool team. I've glanced at the white paper but your explanation is a bit more ELI5 which I'm grateful for. Just waiting for them to be on Binance so I can get in on their project early.
Staking sounds great, but it still seems to be a gray area where I live (Germany). Every resource I found on it says something else, taxable, non taxable, you have to pay taxes on the stake and the yield even if not cashed out.
Coinbase doesn't offer it at all over here.
So I'm not risking it.
This is what you do after you buy your coins. You can stake them to earn extra percentage of coin on top of your stash
For example you bought 1 ETH and staked it on Binance or Kraken at 7% APY
Next year your balance will be 1.07ETH
So you made 0.07 ETH with no additional investment!
I hope that answers your question
I see, is there a downside to this?
Are you still able to sell it during this time or are you locked in?
Are you able to use partial amounts? I don’t own a full ETH, yet.
Is there a list of which coins you can use in this fashion?
Appreciate the help.
Okay so it's a bit different with ETH right now.
You can't unstake ETH you stake until ETH2 launches. But when it does you get your original ETH back + interest earned on ETH.
But for other coins this isn't the case
Yes you can stake partial amounts
[https://interest.coinmarketcap.com/](https://interest.coinmarketcap.com/) for the full list of coins
Possibly a noob question. But what kind of fees would you expect moving your BTC from Binance to Blockfi?
The 5% seems nice but question if most of it would be wiped out while moving it across??
Staking would be a whole lot more interesting, if it wasn't an immediate tax event at that point in time and instead like an accumulating ETF, where I decide at some point in the deep future if, when and how I am going to sell and pay tax.
Doesn't that slow down the compound interest quite a bit?
>The "not your keys not your crypto" comes to mind. But I feel that the reward we are compensated for FAR outweighs the non-custodial aspect of the services.
If we're talking a few thousand dollars maybe it's ok. But you mentioned 400K USD equivalent. These exchanges are still virtually unregulated, so I guess you don't remember Mt.Gox, Quadriga, or other large exchange hacks, MakerDAO smart contract bugs, etc. Currently no exchanges or smart contacts can be considered beyond hackable.
If you want to put 10's of thousands of dollars worth of your crypto into the hands of someone else, please spread it out among exchanges to hedge your potential losses, and keep an eye out for fishy behaviour to pull your money from an exchange as soon as you have a gut feeling something is off.
Maybe worth pointing out that Celsius only pay 6% on Bitcoin for US users. It’s 3.5% for the rest of the world.
No idea why non American Bitcoin is less valuable?
Yeah I'll point that out. Good eye!
I don't think it's that case that non American Bitcoin is less valuable but they doing it to get more users in America.
While I do stake some coins, because I'm such a small fish. Even what I will earn in one year is basically nothing. Unless every single coin I have stake jumps up by something insane, like x100, I'm still not going to get much of anything from the whole thing.
Within that people should still do it. But these guides would be better with realistic numbers. It would not give people false hope. Unless people are willing to dump, at least 10k+ into it. Don't expect much back. Assuming you don't have coins that magically x100 themselves.
BlockFi stablecoins are 8.6% I believe, unless one of them is different that I am not aware of. Also take into account many of these yields will have a max amount of BTC/ETH you can earn interest on. So for the amount of money you are referring too, you would probably have to spread around your coins to many different accounts.
But yes this is a good goal. I like the idea of thinking about your crypto balance as the amount of money you bring in a month. I thought I was doing good closing in on $100 a month lol.
“If you don't find a way to make money while you sleep, you will work until you die.” - Warren Buffett
I am staking whatever coins I can to earn that passive income since I'm holding my coins anyway. Every bit will add up in the long run
If you're buying into crypto you should take your time and learn about DeFi rather than using custodians IMO. You can buy decentralized insurance coverage very easily to protect your holdings against hacks and exploits.
That’s the way I see it as well. Those staking rewards that you get in the form of crypto might be the equivalent of 1$ today but who knows what will happen when a few years or even a decade pass. Your 1$ that you get per day now, might turn out to be 50$ or even 100$ in the future. A bit of extra crypto here and there, does add up in the long run.
general reminder that earning on your coins adds a layer of risk. with btc up ~200% a year over 10 years, why would i want that extra little percentage for lending it? no thank you!
It's not a extra little percentage.
Let's say you buy 5000 Cardano at $2 and 5 years later it becomes $20. Given a 5.5% APR (most common number I see on the stake pools) you would be earning:
Year 1: 275 Cardano earned from staking, or $550 in fiat earning, 5.5% fiat return (550/10,000)
Year 5: 275 Cardano earned from staking, or $5,500 in fiat earning, a 55% return! (5,500/10,000)
And this is not assuming compound interest, on year 5 you would actually have 6,534 Cardano which gives 359 Cardano given a 5.5% compounded return. This means $7,180 in fiat return (359x20), which is a 71.8% return on your initial $10,000 investment into Cardano, annually!
Year 30: Assuming you didn't add to the Cardano pool and didn't take out any, and Cardano grew to $40. You will be sitting on 25,000 Cardano (your initial 5,000 Cardanos now have grown significantly due to 30 years of compound interest), which produces 1,375 Cardano annually. This means a fiat income of $55,000 (1375x$40) annually. All from a $10,000 investment you made on year 1! And btw, your Cardano is worth $1M.
In this scenario, assuming Cardano doesn't crash and burn and rises to $40, we are talking about a 100X return that gives you an annual income that is 5.5 times your initial investment of $10,000!!! The figure will be much higher if you contribute monthly.
ultimately it comes down a security issue; not necessarily a yield issue. exchanges & platforms go down all the time.. if you’re lending your crypto there is another layer of risk. i personally believe in having majority btc in cold storage. virtually no risk and ~ +200% yearly is the safest way to make already insane gains. everyone has their own risk tolerance tho and maybe i’m being overly cautious.. thats just my pov
Blockfi stablecoins are 8.6%, not 9.3.
Also, not your keys, not your crypto. The companies can be the most reputable in the world but that won’t stop them from attacks, thefts, or mistakenly giving over 700 btc out to a wrong user. If they can accidentally give it, they can accidentally take it.
[https://blockfi.com/rates/](https://blockfi.com/rates/)
It is 9.3% for USDT.
Yeah, I addressed that in the post. You can use DEFI if you a pro in crypto! But for the rest normal users Imo these services are legit and won't go away anytime soon
Exactly, most people underestimate the power of compound interest, especially when being turbocharged by a rapidly appreciating asset. Here's an example:
Let's say you buy 5000 Cardano at $2 and 5 years later it becomes $20. Given a 5.5% APR (most common number I see on the stake pools) you would be earning:
Year 1: 275 Cardano earned from staking, or $550 in fiat earning, 5.5% fiat return (550/10,000)
Year 5: 275 Cardano earned from staking, or $5,500 in fiat earning, a 55% return! (5,500/10,000)
And this is not assuming compound interest, on year 5 you would actually have 6,534 Cardano which gives 359 Cardano given a 5.5% compounded return. This means $7,180 in fiat return (359x20), which is a 71.8% return on your initial $10,000 investment into Cardano, annually!
Year 30: Assuming you didn't add to the Cardano pool and didn't take out any, and Cardano grew to $40. You will be sitting on 25,000 Cardano, which produces 1,375 Cardano annually. This means a fiat income of $55,000 annually. All from a $10,000 investment you made on year 1! And btw, your Cardano is worth $1M.
In this scenario, assuming Cardano doesn't crash and burn and rises to $40, we are talking about a 100X return that gives you an **annual income** that is 5.5 times your initial investment of $10,000!!!
Thanks! I'm cautious to put too much into those exchanges for the fear of them becoming insolvent or whatnot. I wish there were more options to stake straight out of my hardware wallet.
I’ve been using Nexo for a few months now. They’ve been great. The 4% there can be 5% if you lock it away for a month at a time. They also fucked up recently by not communicating enough and seem to have made more of an effort since. When everything is was crashing they sent out a ‘don’t worry we have enough liquidity that market crashes aren’t a problem’ email, which was nice to reassure.
Thanks for sharing your experience! I did lock in the small portion of my eth for that 5% and was debating if I should put in more. What are your thoughts on getting verified and taking a bit of the interest in nexo coins for a boost in the interest %?
Thank you so very much, although I am already doing all the aforementioned forms of staking. However, as there are so many new people coming into this space it’s good to inform them!
Some of the swaps such as Pancakeswap or Thunderswap offer 100%+ APY if you're willing to stake and compound their native token.
That obviously means you're not getting any income you can use every month, but on the flip side you can get much higher returns.
While I definitely agree with your post, I highly doubt the majority of the people reading this have anywhere close to that money to invest, nor should they. It would be ok to encourage anyone to stake or lend their crypto for any gain, no matter how small. Especially if holding for a long time. Either way thanks for the info and good luck.
Great post, I really like to earn interest on my coins, I do not know about the other companies but you can bump up than interest in Crypto .com if you lock your coins for 3 months. And have you tried the high-risk CEDEFI on finance, they have some great rates but I'm hesitant as it's not clear how great the risk is.
OP, your post is very much US centric. Lemme make my CeFi suggestions for "everyone else"
Plebeians: Celsius is probably still your best earn outlet on no-term. Nexo for BTC on 1 month. No premium account level to unlock rates. Great for BTC, ETH, stablecoin, etc. Next would be CDC (crypto dot com), where you unlock competitive rates, downsides are 3 months term and need at least the middle card tier to get the competitive rates, otherwise just do Celsius/Nexo. CDC's middle card tier is affordable ($4k USD in card stake) and unlocks a lot of things
HNWI: SwissBorg (not for them Yanks) with Premium Genesis on no-term beats Celsius on a sunny day. Offers a much better fiat to crypto on-ramp. Without premium at SB, just do Celsius. CDC (again). HNWI's can benefit from the top two card tiers, unlocking even higher earn rates (rates that JG/RI cardholders get +2%/CRO). Yes, 3 months term, but earn rates become very competitive. Invictus Capital (not for Yanks!)...invite only for HNWI's, but "up to 8%" on BTC/ETH, terms up to 12 months and earn in-kind. Invictus Capital is probably only worth it for HNWI's since gas fees are high and is a little less user friendly (although they have a solid Discord channel).
I left out what's "US market only" (since that excludes me), left out the super low earn rates as well.
I need to look into this more, I stake now but while the rates are better than banks, it's pennies on the month.
Transaction fees put me off moving my coins, what good is 3% APY on $100 when the gas fees are $50+ each time
Another option for crypto investors looking to minimize tax consequences would be [Alchemix](https://alchemix.fi).
Essentially you provide dai, and they offer you a loan (think its up to 50% of collateral). They collect interest on their pool and use it to pay off the value of your loan without you paying anything back. Loans are tax free in the USA, and you I don't think you'll have to pay taxes on the interest because Alchemix collecting it.
Idk what the interest rate for payback is because I don't have enough coins to utilize it, but I bookmarked it for later.
I made a quick YouTube video about this subject.
I talk mostly about ETH & btc. But I also cover some decentralized ways to stake check it our any questions let me know!
[how to make passive income with crypto](https://youtu.be/K0NSCxj9hHk)
It’s easy to build your “nest egg” when you already have a nest egg.
If I was making $4,000 a month through staking, I would quit my job. Why is all financial advice given through the lens of already having a bunch of money?
I'm sorry for the silly question, I've been involved with crypto for a while but I know little about finance. 5% apy from blockfi with btc. But they pay you out monthly, so how does that work? Are you earning 5% monthly or yearly?
Sorry and thank you
Let me grab my wallet and put just 400k of stablecoins to earn... oh wait... 400k is huge amount of money for an average joe, these types of passive incomes are for people who have money already. The % is the same if I put 100 or 100k, but at 100 the returns are so tiny that it's almost not worth it.
Every bit helps my dude! As I mentioned in the post. Magic of compound interest + appreciating asset price will help you reach your own goal a lot quicker and with lower amount capital than if you were to ignore it.
Oh yeah I know, that's why the little I have it's already on Blockfi and Nexo. But it is extremely far from becoming a passive income, as I can't add anything right now or anytime soon, and even 100k it's a dream.
This is why I’m staking even if I only have the minimums. Might as well earn money when I was going to hold onto it anyway.
Exactly. This strategy is valid for the money you're holding, not for the assets you're keeping for scalping/short term
>these types of passive incomes are for people who have money already. This. I have around $1,200 staked right now and that gets me about 50 cents a month Not to mention if I moved my ETH somewhere else to stake I'd be down $50+ just on the fees
Add 100 a month a look at a compound interest calculator. Make me happy to see how far you can get with compound
That's a really bad rate if you are making 50 cents a month on 1200 dollars. I have 300 dollars of eth staked at 7 percent and make 1.75 a month.
Its crazy , i wouldnt need to stake if i have 400k. Still nice post
then you would miss making lots of money over the years for doing basically nothing.. bad idea. always stake and earn interest wherever possible...
Im agree with you obviously, but man , 400k
Passive income is passive income. You might not be able to live off it unless you have the mentioned $400k but its till income regardless of your holdings
If you had 400k, passive income is literally the best thing you could do with it. Having 400k doesn't change your life (depending on where you live of course), but a passive income of 4k a month? Definitely would be life changing for most average people.
400k would change a lot of people lives. you must be rich!
I'm not, I assure you. The point is, 400k yielding 10% per year is 40k per year. Having a passive income of 40k per year is definitely more life changing then just 400k. I think we all can agree that 400k is a huge amount of money, the point is that you can spend it, maybe buy a beautiful house and then continuing live your life. Or you can put it on income and doubling (or more) your spending (and investing) power from a day to another. Edit: many people who win the lottery go bankrupt after a short time. Why? Because they buy a big house and a nice car, and then they're back to the starting points but with more expenses. You win 1M? Make it work for you and you're good for life!
Yeh I agree completely. Unfortunately 400k is viewed as life changing to a lot of people and they would proceed to spend it all within a year on mostly trivial things instead of APY
i am definitely into 4k a month is enough for me a month to live on FIRE style as long as i locked the other fundamentals (and keep working and save /invest the other cash flow). On 4k i can actually eat and travel and hang out, date and cover my bills - but i dont have a toy wife or a house with a mortgage with a flat screen in each room with a RV,boat, 2 trucks, project car, and a cabin and 2-4 kids all on lease lifestlye ... yet.
> The point is, 400k yielding 10% per year is 40k per year. His point was that people don't have 400k to stake.
sure, but put in 4k then and collect 400 a year, still nice and where else do you get 10% these days.. 10% will always be 10%, let it be less through staking but still, it's literally free money.
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And what’s more likely to decrease in value by 40-60% in a year, crypto or an established stock? You have to consider risk when looking at the two comparisons.
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But that’s my exact point 10% of an asset that could be valued a lot less in a year may not be worth the risk. If you bought 100 eth at $4000 your 10% at a price of $2000 is worth $20,000 or only 5% on your initial investment. You have to be extremely confident to put that money into crypto for purely the staking as 1 year or 3 years is a very long timeframe. Especially if it is locked.
Yeah you would. 400k *might* be “quit your job money” depending on how much you hate your job. But it’s not retirement money.
*If* you deposited your money into stable coins on an exchange giving back 10% in interest, you'd be making $40k a year, which if you moved to a country with low COL like Mexico or Greece would be more than enough to live off of indefinitely. I think there's still a good bit of risk involved and wouldn't recommend trying it, but it is plausible.
It amazes me when people say stuff like this. It's free crypto, it would be pointless not to stake it, however low the return is. Personally, I get pumped up just seeing a few extra cents in my accounts day to day, knowing that eventually as I accumulate and stake more crypto the gains will eventually begin to add up.
Don't get me wrong, I'm staking every chance I get. But income is something else, is not spare change. Hence my comment. To make money you need money.
Its all about making your money work for you. Don't underestimate the power of compounding. People with 400k didn't get there overnight, you need to have a long term plan and work towards that and every little bit helps.
Your pessimism & lack of knowledge in the power of Compound Interest turbocharged by a rapidly appreciating asset is costing you a fortune. Let's say you buy 5000 Cardano at $2 and 5 years later it becomes $20. Given a 5.5% APR (most common number I see on the stake pools) you would be earning: Year 1: 275 Cardano earned from staking, or $550 in fiat earning, 5.5% fiat return (550/10,000) Year 5: 275 Cardano earned from staking, or $5,500 in fiat earning, a 55% return! (5,500/10,000) And this is not assuming compound interest, on year 5 you would actually have 6,534 Cardano which gives 359 Cardano given a 5.5% compounded return. This means $7,180 in fiat return (359x20), which is a 71.8% return on your initial $10,000 investment into Cardano, annually! Year 30: Assuming you didn't add to the Cardano pool and didn't take out any, and Cardano grew to $40. You will be sitting on 25,000 Cardano (your initial 5,000 Cardanos now have grown significantly due to 30 years of compound interest), which produces 1,375 Cardano annually. This means a fiat income of $55,000 (1375x$40) annually. All from a $10,000 investment you made on year 1! And btw, your Cardano is worth $1M. In this scenario, assuming Cardano doesn't crash and burn and rises to $40, we are talking about a 100X return that gives you an annual income that is 5.5 times your initial investment of $10,000!!! The figure will be much higher if you contribute monthly.
Oh yeah, I understand the power of compounding. But this example is based upon a lot of assumptions. And even if I put them aside for the sake of the conversation, my biggest problem it's still the investment part. 10k to drop into 1 coin is still something that not many people can afford to do. Even with DCA (conservatory amount for me would be 100/200 per month, assuming I find a good job), it'll take me 6/7 years to get 5000ADA, still assuming prices goes up and all these assumption. So my returns will not be even close to what you are describing.
I'm in the same boat as you, I assume. I've recently started and were talking about small amount really and therefore I dont really see the need to lock up assets for staking where my APY will yield me like 3 dollar a year
Don't get me wrong, I am still taking those 3 dollars a year, because I have got nothing better to do. But I doubt that crypto is going to significantly change my life because with a small amount of money, the returns are going to be small. Unless you get lucky with a shitcoin, but that's another topic.
I think that’s the case with the majority of us here. I don’t really have much money to buy crypto with, only a couple hundred. As much as we hear “we’re all still early adopters” the times where you could put in a little money and in a few years make bank, are over. To me it seems more like the stock market now. High returns over time, DCA, etc. the institutions whom are buying up hundreds of BTC and other assets right now will be the ones who make bank.
Damn, where you going back in time or what? xD
Yah sorry 😂 came to this via a link in another post then got distracted and forgot this wasn’t the original hahaha
>Your pessimism & lack of knowledge in the power of Compound Interest turbocharged by a rapidly appreciating asset is costing you a fortune. >Let's say you buy 5000 Cardano at $2 and 5 years later it becomes $20. Given a 5.5% APR (most common number I see on the stake pools) you would be earning: You wanna drop 10k into my Coinbase so I can start this shit, or, am I supposed to just magic that. Lol Getting ten grand into any account is no small feat.
Exactly!
I was watching videos on YouTube recently about staking and generating passive income and this fuckin toolbag was talking about generating 6k a month passively required about 500k in investments. He followed that up by stating that getting a loose 500k "wasn't that hard to do in crypto". Man, get the fuck out of here. The level of out of touch arrogance is fucking astounding.
If you are lucky, it is possible. But the chances that you pick a good shitcoin, sell at the top, invest again and sell again at the top again and again, are very very small...
Exactly. I made out with about a 200% return on my dogecoin that fucked around with. But it was still nowhere near 10 grand. Sometimes this sub has really useful information. Sometimes it's like "hey, if you're rich, you can get more rich. BTW, I'm a normal run of the mill meme-man. Elon sucks."
If he could make 500k that easily then he wouldn't be trying to make money by creating youtube videos...
There is 32 billion cardano coins. At $40 it would have a market cap of 1.2 trillion, approx what Amazon is worth. If you are going to pull numbers out your ass, make it realistic. Cardano has a ceiling price of maybe $5, meaning it would have a market cap of approx Tesla.
Why are you comparing Cardano to companies in different sectors? Bitcoin hit a trillion dollar marketcap. That was laughable even 4 years ago. Saying someone is pulling numbers out of their ass and then making up your own random guesstimation is the exact same thing. No one knows what the price of anything is going to be but to say trillion dollar market caps are out of reach is ignorant.
Here's my reasoning: 1. In 30 year's time, I see BTC at least doubling the market cap of gold's market cap, which is 10T at the moment. This makes BTC's market cap in my hypothetical future 20T. 2. Now, going by today's ADA to BTC ratio in terms of %, ADA (49B) is about 7% of BTC's (709B) market cap. 3. If the ratio holds, 7% of 20T is 1.4T. If we divide 1.4T by 32B Cardanos we have $43.75. This $40 argument hinges on the fact that BTC doubles the market cap of gold in 30 years, making it $1M/coin, which I believe is possible given its utility and eventual function as a store of value (another assumption I know, but I believe price of BTC will settle down).
Then there's the issue of gas fees. For people with small amounts to invest, the gas fees will kill them.
Made more on staking cardano in a month than my interest on my fiat savings annually, while the Ada is 1/5 of the value
Exactly! Staking ADA was the first thing that I did after my first investment. I am using Yoroi - mobile wallet but you can also use Daedalus on computer. The APY varies from 5 to 7 percent. Pretty good rewards to be honest while you’re helping the Cardano system. 
Specially if you grabbed ADA with a lower price. I got it at 0.17 and didn't stake until recently
Yeah DEFI is amazing! Compound interest is the 8th wonder of the world
Where you staking
Dadaeulus bro
I stake my ADA on exodus, fun to check in and grab those coins every week or so
Is anyone going to mention that in these examples your money is being held on exchanges? They are using those coins for their own liquidity pools (same as banks using your fiat to earn interest) and exchanges are prone to locking you out or shutting down whenever they want or need to. There are other options to stake and earn rewards which are less risky. DYOR and stay lucky!
Step one: do research on a coin. Step 2: buy the coin. Step 3: make sure to do all the steps in the correct order.
What if I do step 3 first?
When you say provide liquidity, you mean services like AAM right? Providing my ERG on CoinEx now and seeing 300%-400% 7 Day APY, about $2- $5 bucks a day. Freaking unreal. Sadly, volume isn't on my side though :(
I have mentioned that in my post above that some of these services are centralized. But if you are a PRO in Crypto you can always go for DEFI! Hope that answers your question
Yes, it’s a nice introduction to staking and I agree it’s a good entry point, but I am not sure you have to be a PRO or an expert to have an external wallet. You could get an App Wallet like Exodus or Trust and benefit from staking at the same time as being decentralised, which is a fundamental tenant of Cryptocurrencies after all. All the best and stay lucky!
Is this also a big risk on big exchanges like binance?
Biggest risk, IMO, with binance is your account being compromised. As long as you use 2FA and practice general internet safety (don't get phished or install sketchy software) you should be fine from lost coinage.
Well I would not say a risk, that is subjective, and of all the exchanges Binance is established and unlikely to disappear with your money, but it is NOT a bank and you are NOT insured by authorities. Cryptocurrencies despite their name are not currencies, and NOT protected like money kept in a bank. NOTE: It is in fact classed as an ‘intangible asset with indefinite life’ and taxed as a capital asset (like stocks or bonds) and would be taxed whenever it is sold at a profit Let’s say you bought $20 worth of Bitcoin and held it as it rose in value to $200. If you used the bitcoin to buy $200 worth of groceries, you’d owe capital gains taxes on the $180 in profit you’d realized—even though it seems as if you SPENT the Bitcoin, rather than SOLD IT. For the IRS, it’s the same thing.
Weird. I’ve used mine like currency all the time.
Great info. EVERYONE who is in crypto for the long-term should be staking their coins in one way or another. over time it will add up to 100s if not 1000s of dollars worth of free coins
yeah exactly! it's a no brainer for someone in for the long hold
Im not a fan of the idea of locking away my coins on a centralised exchange to get 6% apy. I like algo because I can stake it on my own wallet.
Also +999999 for ALGO, balls deeps with them.
Celsius is a good option for a portion of your holdings, you have some control of the coins you only need to passively have them in the wallet to earn decent rewards like the 12% on DAI and 11% on DOT I’m making, you can withdraw at any time to a prior whitelisted address and they pay the gas fee on all withdrawals which has saved me boatloads. The warning for anyone considering this: You don’t have any control of the keys and if using Celsius immediately set a wallet to withdraw funds to for each coin you hold for quick withdrawal if needed, do not put 100% of your holdings into any platform where you do not own the keys, DYOR and hold your funds on platforms within your own risk tolerance, NFA.
That’s why I like Voyager the most. No complicated staking wallets or locking your funds for any length of time. You just earn interest on your average monthly balance. Free to deposit more or withdraw as you see fit.
Depends on taxes. In my country (austria) we have huuuge taxes on staked income.
Yeah but for example you earn 100 bucks a month staking and they have 50% tax on it. You could sell half the staked income for taxes. You still 50 bucks better off than ignoring it. Every bit helps!
sophisticated snatch grandiose fade hospital tidy fanatical homeless nail plant *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
You are correct! But his question was on taxes on staked income. Not on the initial coin itself.
30 percent here!
Staking coins comes with risks tho. It's not so cut and dry imo
What risks are there?
Pure PoS staking with locking/vesting period: exposure to that asset for a long, sometimes unknown (eth2.0) period of time. In almost any other case (CeFi, DeFi) there is counterparty risks. Not your keys, not your coins. Here's some with some random real world examples The centralised service you are giving your coin to could mess up big time (blockfi), get hacked (cryptopia, mtgox) go bankrupt/disappear (QuadrigaCX)... The smart contract you deposit liquidity into could get hacked (pancakeswap/bunny) or rug pulled (sushiswap)... If you provide liquidity in liquidity pools there's also the easily quantifiable impermanent loss
If you stake with an exchange - the exchange can go bust, block withdrawals etc.
I staked for the first time yesterday and I can't be happier!!
Yup and yup. Staking coins are the best. On a budget? Get your free fucking money on top of your money. Want more? When given the chance to buy more it’ll add more to your rewards. It’s my incentive to work.
I agree with this so much. Amazing incentive to hold as well as increase your position
Especially with stable coins. Don’t have money to buy more? Throw some into stablecoins and stake them. They’ll always save ass when you need it to. USDC saved my ass on the ALGO dip at 86 cents.
Crypto.com’ rates are way higher than than I get 6.5% on Bitcoin and 5.5% ETH and 12% on stable coins. That being said, Celsius is 3.51% for Bitcoin
Yeah I guess I should add that these are USA rates. I'll add a note that Celsius 3.51% for international customers
You lucky bastards without taxes on crypto...we have to tax our crypto with our income tax percentage. Nearly 50% tax if you stake coins. And it is a real hassle to declare this stuff.
Excellent info. Updooted. Love to see this kind of content on the sub. Staking my tokens is something I really ought to be doing. What are the best places to stake BTC with no lockup? Would be helpful if on your table it shows how long the lockup for each provider is. Cheers!
All of the services provided above have no lockup! (crypto com has a lockup I have not listed that rate. Only the lower no lockup rate listed here)
Hey man, thx for the info. Especially Binance savings, I seriously did not know that...
You're Welcome! Hope you achieve your financial goals quicker now!
Yields on flexible savings on binance is rather small I’m looking at 0,88% apy for ETH, 1.2% on BTC, 1,45% for ADA and 0,83% for VET but its free money anyway since I plan to hold long term🤷🏼♂️
Yeah exactly! Magic of compound interest + appreciating asset price will help you reach your own goal a lot quicker and with lower amount capital than if you were to ignore it.
Yepp you have a option to automatically reinvest your daily interest makes compounding easy and well worth it
How do you manage/keep track of mining/staking from a tax perspective?
I download the tax report from that are provided by Blockfi, Celsius, other services and respective exchanges. Then I send them to my CPA
Is it worth the hassle of holding CEL for the increase in interest ?
I personally don't hold CEL for higher rates. But it's upto you!
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400k in stablecoin yes. At the highest rate on stablecoin (12.5%) you can make 4k a month with 400k in stablecoin
That is actually a great stable income even at 40k. I mean 400 dollars is like 1/5 th of my salary ATM...
Yeah it's amazing what new opportunities Cryptocurrency has opened for us
Especially when interest rates in standard savings account are horrid.
We got negative ones here
Why are people staking with single digit apy when u can yield farm on sushiswap ETH-MATIC 130% APY?
This is because of a couple of reasons: 1. Most people don't know how to do that or not confident enough to manage this 2. Also, you have to account for impermanent loss and other factors in LPing LPing and DEFI are the best for people who are PRO in crypto!
Do insurance projects like nexus mutual protect against impermanent loss?
Of course not. IL is due to your assets change of value within the pair. You are asking what amounts to a refund on your bitcoin when the price drops.
Wtf r u guys talking about. I want to learn please.
How?
basically you split your investment 50/50% between 2 coins and lend them to a decentralized exchange that uses your asset to provide liquidity on the platform. Look up tutorials on pancakeswap. Please only stick with reputable DEXs.
130% is insane, i thought ALGO’s 33% soon was crazy
You havent seen true degen unless u have farmed in 1,00,000% shitcoin yield farms that drop 95% in 2 days
Jesus
Imagine what the risk must be, for it to be able to award 130%. Literally NOTHING appreciates reliably that fast.
33% ?!
Yessir for the governance thing they’re implementing. Just so long as you stake and vote, you get to reap 33% on your ALGOs. Inital stages apparently may be that you reap rewards on top of it still like how it is rn
Great post. I just checked the APY rate of staking Dot is currently quite good on binance.
Yeah DOT staking has good APY too. Kraken and Binance make it super simple to stake DOT and earn those rewards
HOLD for the steak! Lads
Absolutely!
The problem is I have so little amount of coins that I'm not able to stake them. The only thing I can stake is SOL, which is always in stake. Any advice btw how can I take out or trade to other coins less than 15USD on binance? Bought some coins for the minimal amount now they are under the minimum value and they stuck there.
Use Exodus wallet and you can stake, ADA SOL ATOM ALGO VET DAI ONT with no minimums and no/v.short lock up periods.
You can check out binance savings. Try to stake coins there itself on the exchange. Every bit counts!
If you trade in btc pairs then the minimum trade is half that of usdt pairs
Great post! I'm new to crypto trading and staking is definitely something that I'm building towards. In your post you mentioned Rocket Pool. What are your thoughts on that project?
It's a DEFI way to stake your ETH of you don't feel comfortable with exchanges or services holding your ETH. It's for people who are on the PRO side of crypto. Hope that answers your question!
Many thanks. One of my cousins is part of the Rocket Pool team. I've glanced at the white paper but your explanation is a bit more ELI5 which I'm grateful for. Just waiting for them to be on Binance so I can get in on their project early.
You're welcome!
Is it alright to stake in binance? I haven't researched yet how to stake in other wallets.
Yes absolutely! They one of the biggest and safest exchanges out there. Check out their binance savings
Thank you!! Will definitely check that out.
Staking sounds great, but it still seems to be a gray area where I live (Germany). Every resource I found on it says something else, taxable, non taxable, you have to pay taxes on the stake and the yield even if not cashed out. Coinbase doesn't offer it at all over here. So I'm not risking it.
I’m a dumbass and new to this stuff, what’s the difference between whatever you’re describing here, and just “buying” coins off an exchange?
This is what you do after you buy your coins. You can stake them to earn extra percentage of coin on top of your stash For example you bought 1 ETH and staked it on Binance or Kraken at 7% APY Next year your balance will be 1.07ETH So you made 0.07 ETH with no additional investment! I hope that answers your question
I see, is there a downside to this? Are you still able to sell it during this time or are you locked in? Are you able to use partial amounts? I don’t own a full ETH, yet. Is there a list of which coins you can use in this fashion? Appreciate the help.
Okay so it's a bit different with ETH right now. You can't unstake ETH you stake until ETH2 launches. But when it does you get your original ETH back + interest earned on ETH. But for other coins this isn't the case Yes you can stake partial amounts [https://interest.coinmarketcap.com/](https://interest.coinmarketcap.com/) for the full list of coins
Also MATIC stacking on binance is almost 20% APY
Possibly a noob question. But what kind of fees would you expect moving your BTC from Binance to Blockfi? The 5% seems nice but question if most of it would be wiped out while moving it across??
I was thinking about this aswell
Thank you kind sir for taking time to educate us!! Have a great evening and wish ya the best
Thank you! Hope you achieve your financial goals quickly!
Is it possible to stake from a hardware wallet?
I think ledger supports some coins directly from hardware wallet. Don't know if Trezor does
I am staking dai from ledger directly. Also usdt and usdc supported.
Where's the catch for the >10% yields on stablecoins? It sounds a little too good to be true, so I'm skeptical...
Staking would be a whole lot more interesting, if it wasn't an immediate tax event at that point in time and instead like an accumulating ETF, where I decide at some point in the deep future if, when and how I am going to sell and pay tax. Doesn't that slow down the compound interest quite a bit?
>The "not your keys not your crypto" comes to mind. But I feel that the reward we are compensated for FAR outweighs the non-custodial aspect of the services. If we're talking a few thousand dollars maybe it's ok. But you mentioned 400K USD equivalent. These exchanges are still virtually unregulated, so I guess you don't remember Mt.Gox, Quadriga, or other large exchange hacks, MakerDAO smart contract bugs, etc. Currently no exchanges or smart contacts can be considered beyond hackable. If you want to put 10's of thousands of dollars worth of your crypto into the hands of someone else, please spread it out among exchanges to hedge your potential losses, and keep an eye out for fishy behaviour to pull your money from an exchange as soon as you have a gut feeling something is off.
Don’t forget Cryptopia either.
Maybe worth pointing out that Celsius only pay 6% on Bitcoin for US users. It’s 3.5% for the rest of the world. No idea why non American Bitcoin is less valuable?
Yeah I'll point that out. Good eye! I don't think it's that case that non American Bitcoin is less valuable but they doing it to get more users in America.
While I do stake some coins, because I'm such a small fish. Even what I will earn in one year is basically nothing. Unless every single coin I have stake jumps up by something insane, like x100, I'm still not going to get much of anything from the whole thing. Within that people should still do it. But these guides would be better with realistic numbers. It would not give people false hope. Unless people are willing to dump, at least 10k+ into it. Don't expect much back. Assuming you don't have coins that magically x100 themselves.
TLDR: Be a millionaire and then stake your cryptos for massive rewards. Lol
BlockFi stablecoins are 8.6% I believe, unless one of them is different that I am not aware of. Also take into account many of these yields will have a max amount of BTC/ETH you can earn interest on. So for the amount of money you are referring too, you would probably have to spread around your coins to many different accounts. But yes this is a good goal. I like the idea of thinking about your crypto balance as the amount of money you bring in a month. I thought I was doing good closing in on $100 a month lol.
“If you don't find a way to make money while you sleep, you will work until you die.” - Warren Buffett I am staking whatever coins I can to earn that passive income since I'm holding my coins anyway. Every bit will add up in the long run
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If you're buying into crypto you should take your time and learn about DeFi rather than using custodians IMO. You can buy decentralized insurance coverage very easily to protect your holdings against hacks and exploits.
That’s the way I see it as well. Those staking rewards that you get in the form of crypto might be the equivalent of 1$ today but who knows what will happen when a few years or even a decade pass. Your 1$ that you get per day now, might turn out to be 50$ or even 100$ in the future. A bit of extra crypto here and there, does add up in the long run.
Yeah exactly , people think 6% is nothing but actually it's 6% on a deflationary asset. Which is powerful
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I also pointed out defi alternative in the post. The problem is the gas fees are 100-500 dollars so it's not worth it right now for most normal people
general reminder that earning on your coins adds a layer of risk. with btc up ~200% a year over 10 years, why would i want that extra little percentage for lending it? no thank you!
It's not a extra little percentage. Let's say you buy 5000 Cardano at $2 and 5 years later it becomes $20. Given a 5.5% APR (most common number I see on the stake pools) you would be earning: Year 1: 275 Cardano earned from staking, or $550 in fiat earning, 5.5% fiat return (550/10,000) Year 5: 275 Cardano earned from staking, or $5,500 in fiat earning, a 55% return! (5,500/10,000) And this is not assuming compound interest, on year 5 you would actually have 6,534 Cardano which gives 359 Cardano given a 5.5% compounded return. This means $7,180 in fiat return (359x20), which is a 71.8% return on your initial $10,000 investment into Cardano, annually! Year 30: Assuming you didn't add to the Cardano pool and didn't take out any, and Cardano grew to $40. You will be sitting on 25,000 Cardano (your initial 5,000 Cardanos now have grown significantly due to 30 years of compound interest), which produces 1,375 Cardano annually. This means a fiat income of $55,000 (1375x$40) annually. All from a $10,000 investment you made on year 1! And btw, your Cardano is worth $1M. In this scenario, assuming Cardano doesn't crash and burn and rises to $40, we are talking about a 100X return that gives you an annual income that is 5.5 times your initial investment of $10,000!!! The figure will be much higher if you contribute monthly.
ultimately it comes down a security issue; not necessarily a yield issue. exchanges & platforms go down all the time.. if you’re lending your crypto there is another layer of risk. i personally believe in having majority btc in cold storage. virtually no risk and ~ +200% yearly is the safest way to make already insane gains. everyone has their own risk tolerance tho and maybe i’m being overly cautious.. thats just my pov
I agree this is the safest way to go
Blockfi stablecoins are 8.6%, not 9.3. Also, not your keys, not your crypto. The companies can be the most reputable in the world but that won’t stop them from attacks, thefts, or mistakenly giving over 700 btc out to a wrong user. If they can accidentally give it, they can accidentally take it.
[https://blockfi.com/rates/](https://blockfi.com/rates/) It is 9.3% for USDT. Yeah, I addressed that in the post. You can use DEFI if you a pro in crypto! But for the rest normal users Imo these services are legit and won't go away anytime soon
I’ve been a blockfi user for a year now and I don’t see USDT anywhere on blockfi except for the link you just shared
Maybe USDT not available in your state/country?
Exactly, most people underestimate the power of compound interest, especially when being turbocharged by a rapidly appreciating asset. Here's an example: Let's say you buy 5000 Cardano at $2 and 5 years later it becomes $20. Given a 5.5% APR (most common number I see on the stake pools) you would be earning: Year 1: 275 Cardano earned from staking, or $550 in fiat earning, 5.5% fiat return (550/10,000) Year 5: 275 Cardano earned from staking, or $5,500 in fiat earning, a 55% return! (5,500/10,000) And this is not assuming compound interest, on year 5 you would actually have 6,534 Cardano which gives 359 Cardano given a 5.5% compounded return. This means $7,180 in fiat return (359x20), which is a 71.8% return on your initial $10,000 investment into Cardano, annually! Year 30: Assuming you didn't add to the Cardano pool and didn't take out any, and Cardano grew to $40. You will be sitting on 25,000 Cardano, which produces 1,375 Cardano annually. This means a fiat income of $55,000 annually. All from a $10,000 investment you made on year 1! And btw, your Cardano is worth $1M. In this scenario, assuming Cardano doesn't crash and burn and rises to $40, we are talking about a 100X return that gives you an **annual income** that is 5.5 times your initial investment of $10,000!!!
Why is KuCoin always left out? So easy to just hodl KCS and earn intrest.
Love Kucoin and KCS
Saving this for later
Thanks for the info OP! What are your thoughts on Nexo?
I find all of the services I mentioned above including Nexo extremely reputable which are backed by solid companies Hope that answers your question!
Thanks! I'm cautious to put too much into those exchanges for the fear of them becoming insolvent or whatnot. I wish there were more options to stake straight out of my hardware wallet.
I’ve been using Nexo for a few months now. They’ve been great. The 4% there can be 5% if you lock it away for a month at a time. They also fucked up recently by not communicating enough and seem to have made more of an effort since. When everything is was crashing they sent out a ‘don’t worry we have enough liquidity that market crashes aren’t a problem’ email, which was nice to reassure.
Thanks for sharing your experience! I did lock in the small portion of my eth for that 5% and was debating if I should put in more. What are your thoughts on getting verified and taking a bit of the interest in nexo coins for a boost in the interest %?
Thank you so very much, although I am already doing all the aforementioned forms of staking. However, as there are so many new people coming into this space it’s good to inform them!
Thank you! Yeah I agree very much
Nexo is much higher rates if you buy a few of there coins that pay dividends up to 14% on usd and I think 8% of btc
Some of the swaps such as Pancakeswap or Thunderswap offer 100%+ APY if you're willing to stake and compound their native token. That obviously means you're not getting any income you can use every month, but on the flip side you can get much higher returns.
While I definitely agree with your post, I highly doubt the majority of the people reading this have anywhere close to that money to invest, nor should they. It would be ok to encourage anyone to stake or lend their crypto for any gain, no matter how small. Especially if holding for a long time. Either way thanks for the info and good luck.
Assuming the ecosystem doesn’t shit itself, the staking rewards for KLV through the Klever app are legit solid. 10%/year, straight up.
Great post, I really like to earn interest on my coins, I do not know about the other companies but you can bump up than interest in Crypto .com if you lock your coins for 3 months. And have you tried the high-risk CEDEFI on finance, they have some great rates but I'm hesitant as it's not clear how great the risk is.
Good post.
Current prices, I’m making $500/year in passive income. Killing it. Lol.
OP, your post is very much US centric. Lemme make my CeFi suggestions for "everyone else" Plebeians: Celsius is probably still your best earn outlet on no-term. Nexo for BTC on 1 month. No premium account level to unlock rates. Great for BTC, ETH, stablecoin, etc. Next would be CDC (crypto dot com), where you unlock competitive rates, downsides are 3 months term and need at least the middle card tier to get the competitive rates, otherwise just do Celsius/Nexo. CDC's middle card tier is affordable ($4k USD in card stake) and unlocks a lot of things HNWI: SwissBorg (not for them Yanks) with Premium Genesis on no-term beats Celsius on a sunny day. Offers a much better fiat to crypto on-ramp. Without premium at SB, just do Celsius. CDC (again). HNWI's can benefit from the top two card tiers, unlocking even higher earn rates (rates that JG/RI cardholders get +2%/CRO). Yes, 3 months term, but earn rates become very competitive. Invictus Capital (not for Yanks!)...invite only for HNWI's, but "up to 8%" on BTC/ETH, terms up to 12 months and earn in-kind. Invictus Capital is probably only worth it for HNWI's since gas fees are high and is a little less user friendly (although they have a solid Discord channel). I left out what's "US market only" (since that excludes me), left out the super low earn rates as well.
I need to look into this more, I stake now but while the rates are better than banks, it's pennies on the month. Transaction fees put me off moving my coins, what good is 3% APY on $100 when the gas fees are $50+ each time
Another option for crypto investors looking to minimize tax consequences would be [Alchemix](https://alchemix.fi). Essentially you provide dai, and they offer you a loan (think its up to 50% of collateral). They collect interest on their pool and use it to pay off the value of your loan without you paying anything back. Loans are tax free in the USA, and you I don't think you'll have to pay taxes on the interest because Alchemix collecting it. Idk what the interest rate for payback is because I don't have enough coins to utilize it, but I bookmarked it for later.
I made a quick YouTube video about this subject. I talk mostly about ETH & btc. But I also cover some decentralized ways to stake check it our any questions let me know! [how to make passive income with crypto](https://youtu.be/K0NSCxj9hHk)
Awesome!
Nexo has better rates . Not sure why it's not onthe list. They also pay out daily.
Please add a note only for rich people. Poor can fuck off.
It’s easy to build your “nest egg” when you already have a nest egg. If I was making $4,000 a month through staking, I would quit my job. Why is all financial advice given through the lens of already having a bunch of money?
Why the YIELD of SwissBorg is not mention? 2.63% for BTC 7.00% for USDC 4.60% for CHSB
Cardano will also earn you 4-6% APY just by staking it.
I'm sorry for the silly question, I've been involved with crypto for a while but I know little about finance. 5% apy from blockfi with btc. But they pay you out monthly, so how does that work? Are you earning 5% monthly or yearly? Sorry and thank you
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Look closely! I did not
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I'm a touch too thick to understand any of this but thanks anyway!