Crypto Academy / Season 3 / Week 1 - Homework Post for [@imagen] Staking
Hello Professor @imagen, I'm happy to partake in your lecture on staking. Here's my homework, I hope you like it.
1.) Research and choose 2 platforms where you can do Staking, explain them, compare them and indicate which one is more profitable according to your opinion. (Binace is not allowed)
Staking Platforms
There are lots of staking platforms out there and this includes the popular Binance, MyContainer, Coinbase Custody, Staked.Us, Figment Networks and others. After some research on staking platforms, I decided on Figment networks and Staked.Us
Figment Networks
Figment Networks is known to be the top blockchain infrastructure and staking provider. It allows users to seamlessly stake coins and earn rewards with over 20 protocols – Cosmos, IRISnet, ICON, Algorand, Livepeer, Harmony, Chainlink, Kava, Terra and others. It is backed by Prota and Lemniscap Ventures; two leading blockchain venture firms and claims to be the first “Legal and Compliant Token Staking Provider”.
It’s an all-in-one staking provider that allows users to stake tokens, build applications, and participate in blockchain governance with over 30 years experience in building successful internet infrastructure and software companies.
It’s an all-in-one staking provider that allows users to stake tokens, build applications, and participate in blockchain governance with over 30 years experience in building successful internet infrastructure and software companies.
Figment Networks offers a unique type of crypto staking which integrates Web 3 protocols complemented by 24/7 customer support via email, Telegram, and phone. This staking infrastructure is integrated with a network of private and public sentry nodes on Google Cloud Providers, Amazon Web Services, Digital Ocean, OVHcloud, and other public cloud platforms. The platform maximizes staking security and minimizes risk by integrating highly secure Web 3 infrastructure developed from the ground. The simple staking infrastructure also allows for quick integration by third parties.
The staking rewards range between 5-30%, with reward fess of 0-15% depending on the PoS coin. One cool feature on the platform is an in-built calculator to determine the staking rewards for each supported coin. Users can also track their transactions in real-time plus track their levels of performance. Figment Networks is a trusted staking platform in the crypto market and deemed to be reliable. It’s a good choice for staking coins and earning rewards but its downside is that it only supports a limited number of digital assets and this can significantly limit your staking choices.
Staked.Us
Staked.Us is one staking platform based in New York that has gained prominence over time. It offers over 30 PoS coins that can be staked and this includes Ethereum 2.0, Polkadot, Cardano, Kava, Livepeer, Synthetix Network, NEAR Protocol and others with annual staking rewards between 5% to 100%. The staking platform leverages an automatic smart contract system – Robo Advisor for Yield (RAY) – to enable stakers understand their staking infrastructure and receive the best possible rewards based on their investment risk profile.
Reward fees of between 5-10% are charged for stakes depending on the staked coin. It also implements staking security by using Kubernetes to distribute across 5 clouds with automated failover. The platform claims to frequently carry out audits to ensure the security of funds entrusted to them by users. Although the Staked.Us platform doesn’t support the direct purchase of PoS tokens on the platform, a featured API has been designed to make staking integrations easy and seamless. It is assumed that staked funds are safe and yield expected rewards because regulatory compliance is not mentioned. The platform also offers DeFi lending on several digital assets for interested users.
Comparison
Both platforms are known and have gained prominence over the years as stake providers and have enabled users to seamlessly stake coins and earn rewards.
- Profit
Profit wise, Figment Networks has staking rewards of between 5-30%, with reward fess of 0-15% whilst Staked.Us has annual staking rewards between 5% to 100%, with reward fees of 5-10% depending on the PoS coin. Figment Networks’ rewards and fees are good because you might not even have to pay reward fees depending on the PoS coin and for Staked.Us, the reward has been declared in annual terms which explains why you can even reap 100% reward with minimal fees.
- Coins Available
Although both platforms support quite many PoS coins it is clear that Staked.Us supports more which gives users more room for their staking options.
- Customer Support Services and Features
Figment Networks has 24/7 customer support with various means to contact them; none was heard from Staked.Us.
Figment Networks has an in-built calculator to determine the staking rewards for each supported coin and allow users to also track their transactions in real-time plus track their levels of performance. Staked.Us have RAY to enable stakers to understand their staking infrastructure and receive the best possible rewards based on their investment risk profile.
Figment Networks has integrated Web 3 infrastructure to maximize staking security and minimize risk. Both implement staking security using clouds.
With these points illustrated, I personally would go for Figment Networks as they have more features that can assist users far more. Staked.Us is equally good as well.
2.) What is Impermanent Loss?
Impermanent Loss
"Impermanent loss refers to a temporary loss caused to a liquidity provider (LP) due to the volatility in a trading pair.
It refers to the difference in value between funds held in an AMM (automated market maker) and funds held in your wallet. Impermanent loss occurs when the value of the funds staked to the AMM fluctuates drastically."
source
A temporary loss of funds occurs when providing liquidity. This happens as a result of an asset provided by a liquidity provider being volatile in relation to the other. That is the change in value of an asset after deposition.
It is called impermanent loss because the loss is not realized until the assets are withdrawn. This is because the asset can go back to its former value due to changes in the market. However, if the LP is to withdraw the asset, then, it becomes a permanent loss.
It is called impermanent loss because the loss is not realized until the assets are withdrawn. This is because the asset can go back to its former value due to changes in the market. However, if the LP is to withdraw the asset, then, it becomes a permanent loss.
3.) What is Delegated Proof of Stake (DPoS)?
Delegated Proof of stake (DPoS)
Delegated Proof of stake (DPoS) is an evolution of the Proof of stake (PoS) concept that is designed to enable other nodes to become validators on the network and not just the “wealthy” to put an end to the criticism of the PoS.
The design of the PoS was such that only those with lots of tokens staked benefitted but the DPoS has been designed in such a way that it is more democratic in the sense that there is fairness. “The first iteration of DPoS was developed in 2014 by former EOS Chief Technology Officer (CTO) Dan Larimer. Larimer first implemented the consensus algorithm on decentralized crypto exchange platform BitShares in 2015. Today, several blockchains, including Cardano, EOS, and TRON use DPoS”.
Over here, users on the network vote and elect delegates also referred to as witnesses or block producers to validate the next block for consensus. Depending on the protocol used, a certain number of witnesses are chosen for each block. As a result, the witnesses of one block varies from the next and so on. The transaction fees from the validated block are given to the witnesses as rewards and this is also shared with the users who voted for them.
Conclusion
Staking platforms enable all sorts of users to be able to stake their coins and tokens to cater for users with all sorts of varying levels of understanding in the crypto market. They provide security and handle the technicalities of staking on our behalf. It's also a nice way of making profit.
Big thanks to @imagen for the lecture. I really learnt a lot from this research.
Big thanks to @imagen for the lecture. I really learnt a lot from this research.
Hi @danielo109. Thank you for participating in Season 3 of the Steemit Crypto Academy.
You did a great job and demonstrate mastery of the topics requested in the assignment, however, the use of quotations even if they are properly referenced is not recommended, the intention is that you develop your own reading and writing skills.
I look forward to continuing to correct your next assignments.
Grade: 8.0
Thank you for the review @imagen