Is there an easy way to profit from crypto?
Yes. Yes there is.
Is it risky? Yes and no.
There are more riskier versions, but it can have minimal risk as well.
What am I referring to? Staking your crypto.
If you’re unfamiliar with staking, it’s basically where you take your crypto, convert it into a protocol’s token, add it to their liquidity, and get rewarded for it.
Most times, this comes in the form of compounding the crypto you’ve added. This can also be at varying interest rates.
Which leads to the risk part.
There are some which have stablecoins (USD and USDT) and the risk is not as high as there are billions of dollars staked in these treasuries.
The return on investment can be as much as 30% per year.
Then there are others that offer astronomical interest like 10,000 APY which is great if you’re not left holding the bag.
However, it really is as simple as getting your funds into a crypto currency, converting it to the token necessary, and staking it to earn interest and rewards.
There’s nothing else to do once this is done except unstake it when you want it back in your wallet.
So is there any downfall to staking crypto?
Yes. Even with the most stable projects, it’s also based on the value of the token you’ve staked. So if the value of the token drops, your initial investment does as well.
To give you an example, at one point CAKE (pancakeswap) was as high as $24. They also offered an auto compounding staking option at close to 100% APY.
So with $100,000, people were earning as much as $10,000/mo.
Today, with all the crashes, CAKE is now worth a little over $4. That means people would have lost as much as 84% of their initial funds. Or in the example above, they would now have 16,000 remaining and earning on that.
Also, another factor is that over time, the interest rate offered goes down. So there’s even less funds being earned.
However, if you’re a bit savvy – you can catch some of these projects at their lows, get in, and not only earn from the interest, but also the increase in value of the token as well.
Out of all the ways to earn in the crypto market, staking is by far the easiest.
Just beware of the risks involved.
If you want to have a place where you can check current projects, DeFi Llama is a great place to start: https://defillama.com/