So while you can’t actually “Stake” stablecoins by the proper definition, you can lock them up and earn interest on them in a very low risk high APR way. This article dives into the 2 best protocols for earning interest on your locked up coins.
Cryptocurrencies typically/usually accepted are . The most profitable platforms and stablecoins I found are Compound financeDy/Dx ExchangeDAIUSDC
- Stable Coin Passive Income
- Comparing The Platforms
- Compound. Finance
- Dy/Dx
- Why is this important?
- DDEX
- Which Is the Winner?
- Staking and crypto-lending are not the same
- Real ROI and volatility
- Number of platforms available and conditions
- Interest in the project
- Conclusion
- Disclaimer
- Most secure solutions — low yield — custodial
- Medium risk — xx% to low xxx% APY — non-custodial
- High/Very high — xxx% to xx,xxx% APY — Degen farming
- Summary
- References
Stable Coin Passive Income
If you just started cryptocurrency and you’re still reluctant on really investing in crypto because of the volatility, there are still high yielding ways to get involved and earn passive decentralized income. The best way to go about this is to use Stable Coins on Decentralized Finance (DeFi) applications.
It’s quite simple.
- Convert your USD to Stable Coins such as; DAIUSDC article better explaining these stablecoins The short summary is that with DAI, it’s an economically incentivized decentralized stablecoin. So its essentially trustless, but you need to trust the smart contract as well as the economics and market makers to keep the system sufficiently collateralized. For USDC, its a trust based system. So if you use USDC you are trusting reputable company Circle that every USDC is backed by a USD in a bank account. USDC is a significant improvement from largest crypto stablecoin USDT
- Deposit your Stable Coins to a Decentralized Finance (DeFi) . For passive income its as easy as just depositing and starting to instantly earn interes. That Is all you have to do. Similar to MakerDAO’s DAI, the system is mostly trustless, but you still need to trust the contract as well as the economics and market makers to keep the system liquid.
Comparing The Platforms
There are a number of platforms where you can trade Stable Coins. Because we’re aiming to determine the best way to earn interest, we will only be comparing the top Decentralized Finance (DeFi) platforms. Namely, Compound.FinanceDy/Dx ExchangeDDEX
Compound. Finance
Is deployed on the which means that the platform is managed by Smart Contracts. Compound.Finance is considered the most decentralized platform to date. That being the case, it is safe to say that it is arguably the most secure and trustworthy platform. For the risk and liquidity it’s definitely one of the best ways to earn interest on your stable coins
Compound currently accepts DAI – Maker Dao as well as USDC as stablecoins for borrowing and lending. You can also use Ethereum and some other quality ERC20 tokens, but the most profitable is by far lending out stablecoins.
- Pros: Decentralized through Smart Contracts Dynamic real time changes on interest rate based on supply and demand. Daily compounding interestCons:
- Pros: Decentralized through Smart Contracts Dynamic real time changes on interest rate based on supply and demand. Daily compounding interest
- Decentralized through Smart Contracts
- Dynamic real time changes on interest rate based on supply and demand.
- Daily compounding interest
- Cons:
Dy/Dx
Why is this important?
Margin trading and derivatives are essential parts of trading, lending and borrowing system that eventually benefit the entire crypto ecosystem.
- Pros: Decentralized through open Smart Contracts, Daily compoundingCons: Historically lower interest and liquidity than compound.finance
- Pros: Decentralized through open Smart Contracts, Daily compounding
- Cons: Historically lower interest and liquidity than compound.finance
DDEX
We were very excited to hear that DDEX will be launching a margin trading platform on its popular decentralized exchange platform. However, unlike Dy/Dx DDEX plans on pulling from compound.finance for borrowing and lending.
Hydro protocol along with using highly liquid compound.finance pool could make for an excellent combination.
Which Is the Winner?
whichever one is paying more. Both contracts are highly audited and tested out in the Ethereum network with millions of dollars on the line. The simple fact that they are still working now after being a literal money honeypot for hackers over the last 6 months is a good enough reason to trust that they will continue to be safe in the future. Afterall, if you hold ETH, you are already exposed to these platforms as if 1 gets hacked, the ETH price is going to tank hard so its in everyone’s interest to keep these protocols safe and functioning.
The potential for DeFi is huge and we are always on the lookout for new and innovative platforms that utilise Smart Contract technology. Can’t wait for the next generation products in this space that offer more than just lending and borrowing!
Staking stablecoins and PoS coins: which is safer and more profitable?
As part of the launch of the first stablecoin USD Neutrino for staking, Ioann Voronin, advisor and product consultant at the multifunctional crypto exchange WAVES-Exchange, analyzed and compared the profitability indicators of staking stablecoins and conventional PoS cryptocurrencies.
If you were not interested in staking before, the variety of coins and platforms that support this type of passive income can make your head spin. And with the advent of stablecoin staking, the choice has become even wider. What type of coins is better in terms of profit and risk?
A year ago, staking cryptocurrencies was much easier than it is now. There were only a few specialized platforms on the crypto market, a couple of popular cryptocurrencies and approximately the same rates of return.
But those days are over: in 2020, staking has grown into a serious segment of the crypto industry for several reasons. First, there are now over 30 PoS coins on the market that support staking. Secondly, many crypto exchanges now have their own PoS nodes — an interesting alternative to special staking platforms. Moreover, investors now have access to staking and deposit accounts in stablecoins, which allow them to minimize risk and get returns on the level of PoS coins or even higher. What to choose?
To find out, you need to compare the two main options on the market (PoS coins and stablecoins), according to a number of clear criteria. However, an important caveat about the nature of staking needs to be made first.
Staking and crypto-lending are not the same
Coins that use the Proof-of-Stake (PoS) consensus algorithm — Tezos, Cosmos, BIP, and LOOM — natively support staking. Whereas the value of stablecoins is tied to a specific asset — for example, to the US dollar.
Real ROI and volatility
Let’s compare the return on investment in PoS coins and stablecoins and how this indicator is affected by the volatility inherent in the crypto market.
PoS coins. Each coin has its own nominal rate of return built into the algorithm. For example, for Cosmos (ATOM) it is 8.35%.
However, the really important value is the real profitability, which is calculated based on the price change over a period. For example, if you invested $10,000 in staking ATOM coins on January 1 this year, you would have earned a nominal return of about 3.5% by June 1. Instead of 2309 coins, you would have 2390. However, over the same period of five months, the price of the coin fell by more than 30%: from $4.33 to $2.96. The cost of a steak, including interest, would be only $7075, and the real ROI would drop to -30%.
Stablecoins. With them, everything is simple: what rate is declared, this is the ROI that the investor receives, minus platform commissions. On crypto lending platforms, the rates are quite stable and allow you to predict income: for example, if 1.94% per annum is charged for deposits in USDC on the Fulcrum platform, then your profit in dollar terms will also be 1.94%, unless something out of the ordinary happens and the USDC coin will not lose its peg to the US dollar.
Verdict: On average, the real ROI of stablecoins is higher and more predictable, since there is almost no volatility. A PoS coin can suddenly rise in value and return 20% or more, but it can also lose half of its value.
Number of platforms available and conditions
Next, let’s compare the number of PoS and stablecoin staking platforms available and the terms they offer to holders.
PoS coins. Dozens of platforms offer staking to popular coins like Tezos and Cosmos. These sites can be divided into two categories:
⁃ Specialized sites — Staked, Staking Lab and Dokia Capital, among others.
⁃ Crypto exchanges — Bitfinex, Kraken and KuCoin among the smaller platforms.
Sure, platform competition is good for investors, but having such a wide variety also means spending more time searching for information. Having chosen a coin, you will need to study the rates of return, taking into account the commission on different sites, and also assess the risks of each of them. At the same time, commission rates on different platforms can vary greatly, which affects the investor’s income. For example, for the ATOM coin, the Binance exchange promises a yield of 6–9% per annum, while on Stakin this figure will be 9.1%, and on Gate.io — only 6.1%.
Stablecoins. This type of digital asset can be deposited on various lending platforms:
⁃ Decentralized — Compound, Nuo, dYdX, Aave and others.
It should be borne in mind that different lending platforms may offer completely different rates for the same coin. For example, the income on deposits in USDC ranges from 1.25% to 8.6%.
Verdict: Regular staking coins win by the number of platforms. However, in the case of staking or lending in stablecoins, choosing a platform is easier: you don’t have to compare so many options.
Interest in the project
Another risk factor is the very platform on which staking takes place. Both centralized (custodian) and decentralized (non-custodial) platforms are available for both stablecoins and PoS coins. A crypto exchange like Binance is a classic example of a custodian solution: you transfer coins to an exchange for safekeeping. If she is attacked by hackers, your steak may disappear.
In the case of non-custodian platforms, the risk of theft or fraud is quite low. It doesn’t matter which asset to use for staking or deposit, and where: USDC — on Compound, USDN — on Waves․Exchange, XTZ — on P2PValidator. And vice versa: on custodian platforms, the risks are higher, both in the case of providing stablecoins on credit, and in the case of staking PoS coins. And since the bulk of PoS staking passes through such exchanges as Bitfinex and Binance, we can conclude that, on average, the risks of PoS asset owners are more serious.
Conclusion
PoS coin nominal rates of return are often very attractive, but price fluctuations can lead to negative profitability. In the case of stablecoins, a positive outcome is almost guaranteed. At the same time, you should not expect more than 15–17% earnings on a stablecoin, although this is possible with a PoS asset.
Ultimately, the choice should depend on your personal attitude to risk. Investors who are willing to take risks in the hope of earning ultra-high returns should invest in a classic PoS coin such as Tezos.
If it is important for you to preserve investments (especially in the case of large amounts), then stablecoins are definitely preferable due to the best ratio of risk to ROI.
As the global economic crisis deepens, more and more investors will acquire crypto assets. This will undoubtedly change the market balance in the staking and crypto lending segments. How exactly? We’ll find out soon.
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В рамках запуска первого стейблкоина USD Neutrino для стейкинга Иоанн Воронин, советник и продуктовый консультант криптобиржи WAVES․Exchange, провел анализ и сравнил показатели доходности стейкинга стейблкоинов и обычных PoS-криптовалют. В материале эксперт рассказывает про перспективы стейкинга как нового способа пассивного заработка, про отличия стейкинга от криптокредитования, а также про основные платформы, предназначенные для этого.
Если вы раньше не интересовались стейкингом, то от разнообразия монет и платформ, поддерживающих данных вид пассивного дохода, может закружиться голова. А с появлением стейкинга стейблкоинов выбор стал еще шире. Какой вид монет лучше с точки зрения профита и рисков?
Еще год назад стейкинг криптовалют был делом куда более простым, чем сейчас. На крипторынке присутствовали всего несколько специализированных платформ, пара популярных криптовалют и примерно одинаковые ставки доходности.
Но эти времена прошли: в 2020 году стейкинг вырос в серьезный сегмент крипто-индустрии по нескольким причинам. Во-первых, на рынке теперь представлено более 30 PoS-монет, которые поддерживают возможность стейкинга. Во-вторых, у многих криптобирж сейчас есть собственные PoS-ноды — интересная альтернатива специальным стейкинговым платформам. Более того, теперь инвесторам доступен стейкинг и депозитные счета в стейблкоинах, которые позволяют минимизировать риск и получить доходность на уровне PoS-монет или даже выше. Что же выбрать?
Чтобы это узнать, необходимо сравнить два основных варианта, представленных на рынке (PoS-монеты и стейблкоины), по ряду четких критериев. Однако вначале нужно сделать важную оговорку о природе стейкинга.
Монеты, в которых используется алгоритм консенсуса Proof-of-Stake (PoS) — Tezos, Cosmos, BIP, и LOOM — изначально поддерживают стейкинг. В то время как стоимость стейблкоинов привязана к определенному активу — например, к доллару США.
Для стейблкоинов доступен не стейкинг, а займы — монеты выдаются в качестве кредита другому пользователю, который в ответ вносит залог. Однако для инвесторов нет особой практической разницы между стейкингом и кредитованием. Вот почему на крипторынке можно услышать, например о «стейкинге USDC».
Сравним окупаемость инвестиций в PoS-монеты и стейблкоины и то, как на данный показатель влияет волатильность, которая присуща крипторынку.
PoS-монеты. У каждой монеты есть своя номинальная ставка доходности, встроенная в алгоритм. Например, для Cosmos (ATOM) она равна 8.35%.
Однако по-настоящему важная величина — это реальная доходность, которая рассчитывается на основе изменения цены за какой-либо период. Например, если бы вы инвестировали $10 000 в стейкинг монет ATOM 1 января этого года, то к 1 июня вы получили бы номинальный доход в размере около 3.5%. Вместо 2309 монет у вас стало бы 2390. Однако за тот же период в пять месяцев цена монеты упала более чем на 30%: с $4.33 to $2.96. Стоимость стейка вместе с процентами составила бы всего $7075, а реальный ROI опустился бы до -30%.
Стейблкоины. С ними все просто: какая ставка заявлена, такой ROI и получает инвестор, за вычетом комиссий платформы. На платформах криптокредитования ставки довольно стабильны и позволяют предсказать доход: скажем, если за депозиты в USDC на платформе Fulcrum начисляется 1.94% годовых, то ваш профит в долларовом эквиваленте тоже будет равен 1.94%, если только не произойдет что-то из ряда вон выходящее и монета USDC не потеряет своей привязки к доллару США.
Вердикт: в среднем реальный ROI стейблкоинов выше и более предсказуем, так как почти отсутствует волатильность. PoS-монета может внезапно вырасти в цене и принести доходность в 20% и более, но также может и потерять половину своей стоимости.
Далее сравним количество доступных платформ для стейкинга PoS-монет и стейблкоинов и условия, которые они предлагают держателям.
PoS-монеты. Десятки платформ предлагают стейкинг популярных монет вроде Tezos и Cosmos. Эти площадки можно разделить на две категории:
- Специализированные сайты — Staked, Staking Lab и Dokia Capital среди прочих.
- Криптобиржи — Bitfinex, Kraken и KuCoin среди более мелких платформ.
Конечно, конкуренция платформ — это хорошо для инвесторов, но такой широкий выбор также означает, что вам придется потратить больше времени на поиск информации. Выбрав монету, нужно будет изучить ставки доходности с учетом комиссии на разных площадках, а также оценить риски каждой из них. При этом ставки комиссий на разных платформах могут сильно различаться, что влияет на доход инвестора. Например, для монеты ATOM биржа Binance обещает доходность в 6–9% годовых, в то время как на Stakin этот показатель составит 9.1%, а на Gate.io — всего 6.1%.
Стейблкоины. Данный тип цифровых активов можно депонировать на различных платформах кредитования:
При этом стоит учитывать, что разные платформы кредитования могут предлагать абсолютно разные ставки для одной и той же монеты. Например, доход по депозитам в USDC варьируется от 1.25% до 8.6%.
Вердикт: по количеству платформ выигрывают обычные стейкинговые монеты. Однако в случае стейкинга или кредитования в стейблкоинах выбрать платформу легче: не придется сравнивать так много вариантов.
Мы уже упоминали волатильность как ключевой фактор риска. При стейкинге стейблкоинов инвестор получает вознаграждение в криптовалюте, которую часто можно обменять на фиат. А вот стейкинг PoS-монет может привести к убыткам из-за волатильности. Еще один фактор, по которому стоит оценивать доходность инвестирования в PoS-монету, — уровень интереса к конкретной монете. У стейблкоинов есть весомое преимущество: они изначально создавались как надежный способ хранить и переводить средства между участниками сделки. В условиях текущего кризиса интерес инвесторов к стейблкоинам может только расти. С другой стороны, каждая PoS-монета — это криптовалюта какого-то блокчейн-проекта, который может как добиться успеха, так и провалиться. Если фаундеры не запустят продукт, то цена токена может обвалиться.
Еще один фактор риска — сама платформа, на которой происходит стейкинг. И для стейблкоинов, и для PoS-монет доступны как централизованные (кастодиальные), так и децентрализованные (некастодиальные) площадки. Криптобиржа вроде Binance — классический пример кастодиального решения: вы передаете монеты на хранение бирже. Если она подвергнется атаке хакеров, ваш стейк может пропасть.
В случае некастодиальных платформ риск кражи или махинаций довольно низок. При этом неважно, какой актив использовать при стейкинге или депонировать и где: USDC — на Compound, USDN — на Waves․Exchange, XTZ — на P2PValidator. И наоборот: на кастодиальных платформах риски выше, как в случае предоставления стейблкоинов в кредит, так и в случае стейкинга PoS-монет. А поскольку основные объемы PoS-стейкинга проходят именно через такие биржи, как Bitfinex и Binance, можно сделать вывод, что в среднем риски владельцев PoS-активов серьезнее.
Вердикт: PoS-монеты более рискованны, поскольку их цена сильно зависит как от интереса к самому блокчейн-проекту, так и от рыночных настроений. Для обоих типов монет безопаснее выбирать некастодиальные платформы.
Номинальные ставки доходности PoS-монет зачастую очень привлекательны, но колебания цены могут привести к отрицательной прибыльности. В случае стейблкоинов положительный результат почти гарантирован. При этом не стоит ожидать заработка на стейблкоине больше 15–17%, хоть и с PoS-активом это возможно.
В конечном итоге выбор должен зависеть от вашего личного отношения к риску. Инвесторам, которые готовы рискнуть в надежде получить сверхвысокий доход, стоит вложить средства в классическую PoS-монету — например, Tezos. Если же вам важно сохранить инвестиции (особенно в случае крупных сумм), то стейблкоины однозначно предпочтительнее благодаря лучшему соотношению риска с ROI.
По мере углубления мирового экономического кризиса все больше инвесторов будут приобретать крипто-активы. Это несомненно изменит рыночный баланс в сегментах стейкинга и криптокредитования. Как именно? Скоро узнаем.
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I discovered only recently that staking stablecoins like USDT, USDT, DAI and FRAX on some platforms could yield an APY of up to two figures and sometimes even more than that.
Disclaimer
This article is for informational purposes only. It contains no financial advice. Always do your own research before investing in any crypto project.
Most secure solutions — low yield — custodial
As of June 21, Nexo.io gives 8-10% APY on stable coins depending on the percentage of Nexo Tokens you hold in your portfolio.
You can get 2% more if you decide to get rewarded in Nexo Tokens instead of the stable you are staking.
This is the lowest yield you’ll find in this article, but it is also the platform that has been around the longest (since 2018). The funds are held in cold storage by BitGo and “Nexo’s total insurance portfolio now amounts to 375,000,000 USD”.
I use Nexo as my ramp to Fiat. Since I live in a country that has a flat tax on the Crypto to Fiat event, each time I convert Crypto to Fiat, I also put aside the amount of money I’ll pay in taxes. I leave that money on Nexo and forget about it until the taxman pays a visit, knowing that it’ll generate some yield until then. Sure, I could earn more elsewhere, but I trust Nexo to be around if all other platforms disappear and I want to be sure the taxman gets his due!
YieldApp is a Nexo competitor that launched in Winter 2020. As of June 2021 it gives 12–20% APY on stables.
Ten percent is paid out in the stable you are staking and 2-10% in YLD, the native token of the platform. The final ratio depends on the amount of YLD you stake on the platform.
There is also a 10% APY on YLD. Let’s say you don’t hold any YLD when you begin staking stablecoins. You will start earning them through your stablecoin staking on day one. You will also get APY on the YLD you have earned.
Here are the different tier levels. I like the fact that your tier depends only on the amount of YLD you hold on the platform, contrary to Nexo where you need to increase the amount of NEXO you hold to remain in higher tiers when you increase your stablecoins holdings.
YLD is oscillating around $0.3 at the time of writing in June 2021, which puts Tier 5 access at $6,000.
Yield.app is a great alternative to Nexo as its lower tier already offers the same APY as NEXO’s highest tier.
Medium risk — xx% to low xxx% APY — non-custodial
- DEX to swap between tokens on RSK (rBTC, rUSDT and SOV, the native platform token).
- Margin trading.
- Lending and borrowing.
- Liquidity mining.
In the lending section you can lend rUSDT, the RSK version of USDT, and get APYs that are often 20-30%. Sovryn has a bridge to convert your USDT to rUSDT.
If you need help connecting your Metamask to RSK network in order to access Sovryn, you can refer to this how-to.
Adamant.finance is a “Yield Farm”. This means it optimizes the APY you get when using other protcols, generally by auto-compounding your rewards. Let me illustrate that with an example.
Let’s say you are providing liquidity on the Quickswap DEX by staking equal amounts of USDT and USDC. You are incentivized to do so because Quickswap gives you the possibility to stake your Liquidity Pool (LP) token on their platform and be rewarded in QUICK tokens for a whopping APY: nearly 15% as of June 2021 (when including the fees paid for providing liquidity — the QUICK reward APY alone is about 5%).
- Claim the QUICK you earned,
- Sell half for USDT, half for USDC,
- Add liquidity to the USDT-USDC pool,
- Stake the resulting LP token.
Native token rewards
But that is not the main source of APY in the Adamant ecosystem. The platform charges a 30% fee on profits from autocompounding and these fees are used to mine ADDY, the native token. These ADDY are redistributed to the stakers and can be either sold on the market or staked or locked to give even more yield. There are several strategies available as what to do with the ADDY you earn and I’ll write a separate article dedicated to that subject alone.
There are many farms on the Ethereum network (Yearn.finance/YFI, Curve/CRV, Compound/COMP), but entering and exiting complex farming strategies can cost up to hundreds of dollars in fees, which eats up all your profits if you invest less than $10,000 — or in some cases less than $100,000.
Adamant runs on Polygon Network, a layer 2 solution on Ethereum network. Polygon has many advantages over Ethereum: it is, most of the time, very fast and nearly free to use. Most transactions go through in a few seconds and cost a fraction of a cent!
The great advantage of yield farming on Polygon rather than on Ethereum is the very low barrier to entry. Polygon fees are essentially non-existent, so you can enter and exit farms for free to test them out, and select the ones that suit you most.
Adamant is a non-custodial solution: you remain in control of your funds at all time. But this comes with risks: you have to trust their smart contracts are safe (so they don’t run off with your LP tokens) and secure (hack-resistant). They are currently being audited by Certik.
High/Very high — xxx% to xx,xxx% APY — Degen farming
You will find vaults on Adamant or similar farms that will promise unbelievable APYs on stable-stable farming. The screenshot below shows the APYs offered on Adamant in early June 2021 for FRAX-USDC and IRON-USDC vaults. Both FRAX and IRON are algorithmic stablecoins, pegged to the US dollar by a complex formula. You can see that the IRON vault has a five figure APY of about 25,000%.
IRON stablecoin — not so stable!
My advice is simple: when you see stable-stable vaults with APYs in the mid to high three figures or above, know that they are not sustainable. Stay away if you’re not an expert at “degen farming”.
Summary
Here is a comparison of the different platforms reviewed in that article. I hope it will help you as you do your own research to find a solution that suits you.
References
Nexo: https://platform.nexo.io/Yield.app: https://app.yield.app/Sovryn: http://live.sovryn.app/Adamant: https://adamant.finance/