Steemit Crypto Academy | Season 3: Week 1 || Staking
Blockchain technology is a trill and with it have come all the sort after cryptocurrencies which government around want to emulate but this time for a state owned digital currencies. As blockchain technology become widely accepted, there has been a need to solve scaling issue and several innovation to keep the fun going.
This weeks lecture on staking an eye-opening. Thank you professor @imagen for this lecture.
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. (Binance is not allowed)
Staking is the act of locking up crypto assets with the aim of making profit on it and this is made possible because of the Proof of Stake consensus algorithm(PoS). PoS is a revolutionized algorithm which works better than Bitcoins Proof of Work(PoW) algorithm, which makes blockchain more scalable, efficient, low fees and reduces energy consumption drastically as compared to PoW. As blockchain and cryptocurrencies are becoming more popular with growing demand on blockchain which as resulted in scalability problem, PoS came as an alternative, which has gained prominence and now several blockchain platforms like EOS, Cosmos, Tezos, , Cardano have adopted the innovative goodness it offers.
It is possible to stake crypto assets on exchange platform and wallets like, Houbi, binance, Trust Wallet and several other platforms; but , remember you can not withdraw staked tokens until stipulated period reaches but even in the wake of such, Atom Wallet allows individuals to be able to unstake tokens at any given time which is an advantage to a trader when there is a shift movement upward to downward.
I will proceed to compare Kraken with Stake.us
In July, 2011, KRAKEN was founded by Jesse Powell in San Francisco. It offers traders the ability to trade in several cryptocurrencies, staking, etc. One can directly buy crypto assets using a credit card directly on kraken without a middle man.
Polkadot (DOT)= +12%, Kusama (KSM)=+12%, Cardano (ADA)= 4-6%, Flow(FLOW)= 4.6%, Ethereum (ETH 2)= 5%-7%, Solana (SOL)= 6.5%, Cosmos (ATOM)= +7%, Tezos (XTZ)= +5.5%, Kava (KAVA)= 20%, Euro (EUR)= +1.5%, US Dollar (USD)= +2%, Bitcoin (BTC)= +0.25%.
Konstantin Gladych, created Atomic Wallet with his extensive knowledge in I.T. The wallet is a decentralized wallet with an exchange with the ability to trade and store 400+ coin and token.
ZILLIQA= ~15%, CARDANO= ~5%, ICON= 10%, SOLANA= 7%, TEZOS= 7%, COSMOS= 10%, AWC= ~20%, TRON= ~5%, BAND PROTOCOL= ~17%, KOMODO= ~5.1%, VECHAIN= ~1.63%, VETHOR= ~1.63%, ALGORAND= ~7.2%, ONTOLOGY= ~5.6%, NEO= ~1.4%, QTUM= ~5.99%, POLKADOT= ~7.83%
Compare Kraken and Atomic
| KRAKEN | ATOMIC |
|---|---|
| kava has hightest at 20% | the highest staking return is 20% on AWC |
| It take 7 days to validate your unstaked coins | instantly unstake coins at will |
| Instant rewards when you stake | takes 2 days to start earning |
| features USD and Euro fiat staking | does not support staking USD and Euro Fiat |
| Zero fees for on staking | no staking fees |
| 12 assets available to stake | 13 assests available to stake with additional 4 coming. |
| +0.25% on BTC as lowest return | 1.4% lowest return on NEO |
Having reviewed the two staking platforms and considering which is the, I will choose Atomic because I gives you total control over your staking assets to the extent that you can pull out immediately at your quest thus you would not have to wait 7 days when you really need to sell some asset to take care of immediate needs and the yearly interest is also good with different assets to choose from and to stake from and 4 additional assets that is soon to be added as compared to Kraken's 12 assets.
I believe profitability also has to do with flexibility.
2.) What is Impermanent Loss?
When the market fluctuation affect a trading pair, it is known as impermanent loss. The good thing is that this changes or loss is not permanent and may get back to normal if the trader is patient enough to wait and once the markets normalizes, the trader is able to gain commission on funds.
The price of tokens in an AMM is not immediately affected by the market price unless arbiters sell assets overprice then there will be an impermanent loss.
There is also the possibility of permanent loss when the the volatility is too high or too much.
For example, if you miss to buy crypto at specific rate, your order in will wait until it can be verified when the price gets back to what your asking price. This can take a few minutes or even seral days before such an order can be finally verified just because you missed the window in a mere seconds.
3.) What is Delegated Proof of Stake (DPoS)?
The concept of Delegated Proof of Stake(DPoS) is an evolution of Proof of Stake(PoS). The idea was to move from the centralized way of PoS where validator with more asset value are favored compared to those with less asset. As the name suggests, networks uses have the power to elect witnesses for block validators. For this to happen, individual share holders stake their assets in a pool, allowing the staked assets to be used as resources for the platform and in turn, the delegates may share profit from verifying blocks with their voters.
This also comes with a price to pay by the delegates as failure to do their jobs will have them evicted and another replaced.
Daniel Larimer is the brain behind DPoS which came into play in 2014 and since then, projects like Steem, BitShare, Tron, Lisk, Cardano and several others adopt DPoS consensus today. DPoS is more scalable than other consensus algorithm. This algorithm does not need too many systems with computation abilities and higher energy consumption to be able to verify a block.
4.) Conclusion
Evidently, DPoS has really helped with the scalability problems and as time goes on, more and more platforms are adopting this consensus algorithm for the good it does thus given power to invested network users to choose delegates there by making it more fair and democratic.
It has been an awesome ride so far with a knowledge in staking and the benefits as well as impermanent loss.
Hi @head1. Thank you for participating in the Third Season of the Steemit Crypto Academy.
You did a good job and demonstrate mastery of the topics requested in this assignment, however, you have yet to give your answer the question of which platform is more profitable after presenting the comparative study. On the other hand, I suggest the use of HTML codes to add more visual appeal to your post.
Keep pushing yourself and I look forward to correcting your next assignments.
Rating: 7.0
Thank you professor @imagen for the review.
I have edited and answered the question on that. I appreciate you calling my attention on that.