Crypto Academy / Season 3 / Week 1 / Homework post for ,Intermediate : Staking ...by @shahidchoudary

Greetings to you all 🤗 !!
I hope you had a good day. I love to make homework posts as they are so informative and i learn a lot from them. So as you may have fetched from the heading i am here to make a homework post that was given by
@imagen .
So, Here we go ;

Source

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)

Ans :

• I did some research on that and i came to know that there are many plateform that allows you to do staking by locking up your coins there. And as asked in the task i would be discuss two of them here, let's briefly introduce them first ;

1) Coinbase

Coin base has a good name in the world of crypto exchanges and it is well known for its services. It was founded in 2011 . You can do staking while leaving the tokens in coinbase wallet . And it is expanding since its start to offer more and more coins for exchange.

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2) kraken

It was also founded during the booming era of cryptocurrencies in 2011 . It was a just a ordinary exchange market in initially but in 2019 it joined stake exchange market.

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Comparison :-

Coinbase	kraken

(▪️) Coinbase stakes itself on the behalf of its customers and then the customers are rewarded directly into their accounts.

( ▪️) Their estimated annual return is around 5% and. Keeps varyiy a little bit.

(▪️) Its pays out are also Twice a week , each three days.

(▪️) Your can take your coin out anytime following very simple un-stake procedure.

( ▪️) No coins are locked for now.

( ▪️) It is much simpler because staking is headed out by coinbase itself.

( ▪️) It has a better security, validaters can get removed instantly they try to attack on the network.

( ▪️) Famous exchange currencies are Ethereum , Tezos and Cosmos (ATOM) where Tezoz is getting much attention.

(▪️) Their staking fee is around 5 to 10 % .

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Indicate which one is more profitable according to your opinion .

I am not an expert but According to my skimming research on these plateforms and i think that Coinbase is better . Because

• Its more secured and frauds are very less likely to happen.

• Its staking fee is less then that of kraken.

• This is less constrained so it's kind a user friendly.

• Your no tokens are locked.

• Withdrawal from staking is easy as you don't have to wait for any un-staking protocol much longer.

So these were the most obvious reasons to chose Coinbase as my choice.

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2.) What is Impermanent Loss?

Mostly simply it can be explained as the change in the value of tokens from the the price when they were deposited into the pool . This change is actually taken in term of change in equivalent dollars price . Some forums do more often face this loss and some face it rarely.

Here a question arises , that why people still invest even after such possible loses
; the reason is transaction fees . Their some percentage goes to the investee to overcome this loss.

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3.) What is Delegated Proof of Stake (DPoS)?

I hope you are familiar with SP delegation and DPoS is also similar in working structure. In liquidity pool different stake holders delegate their tokens to a specific delegation node which is the validating node. Actually they do this by voting for someone in the network. So tokens of delegates are used combinaly to validate a transaction but they are not transferred no anyone. This is all procedure of proof of Stake but it comes with delegations so it is called delegates proof of stake .
The delegates recieve transaction fees and Reward is also shared with the providers of the staking pool.

The pool in which the token are delegated is called staking-pool and delegates are called wintnesses or validators.

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Conclusion 🧾🧾 :

There are some points that i concluded from the whole concept.

• Staking is getting benefits from the token that you hold by sharing them to a pool and locking them up.

• You do this by validating the transactions.

• The validator is chosen randomly , but the one with high value of tokens is more likely to get selected.

• The validator in return get rewards when transactions is proceded and block is formed.

• There are many platforms which provides staking exchanges where you can stake using different coins.

• The percentage of Reward, fee and terms and conditions for un-staking is different for different plateform .

• Staking can also be done by delegations which is called DPoS. The holders vote for witnesses and their combined stake is used in validation.

• Their is an impermanent loss which is due to change in value from the time of deposit to later. But this loss is often overcame by fee of transactions that fill up the loss gaps.

🖤•••THE END•••🖤

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This was all about the homework post . I tried my best to do research and write in a better way.i hope you liked it.😇

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Submitted ßy :

@shahidchoudary