
<p>Staking Rewards is extremely excited to announce that we have successfully raised 3M CHF from the world’s 3 leading digital asset investment firms; Galaxy Digital, CoinShares, and Digital Currency Group (DCG).</p>



<p>The new investment will fuel our growth and positioning as the trusted data hub for the $40 billion staking industry. The capital will allow us to develop a new suite of products and services catering to the staking space, including the development of investable staking index products.</p>



<h3>Stepping into the future with the support of the world&#8217;s largest digital asset investment firms</h3>



<p>Today, staking generates an estimated $9 billion of revenue throughout the ecosystem, but investors and asset managers have few independent data sources when it comes to understanding and evaluating staking yields, service providers, and staking related investment products. With over 4.7M page views per month and 400k+ unique monthly users, we have become the site of reference for all staking related activities.&nbsp;</p>



<p>Our fundraising round was oversubscribed by 6x, and in order to continue serving as an independent and unbiased hub for the staking industry, we have carefully chosen the right partners to support us on our mission.</p>



<p>We are honored that, for the first time in history, the world’s three largest digital asset investment firms co-lead the investment in a company. They collectively manage over $50 billion of crypto assets on behalf of a global investor base, and are actively collaborating with Staking Rewards on integrating staking into their product suite.</p>



<p>Other investors in the round were 1kx Capital and Sygnal Ventures, along with angel investors including early CoinMarketCap team members, and the cryptoasset advisory firm NxGen.</p>



<p>This fundraising round comes at a pivotal time for Staking Rewards, and will mark the next step for us to provide the highest quality data and research around Staking and Proof of Stake, as well as building industry leading financial products on top of it.</p>



<hr class="wp-block-separator"/>



<h3>The Staking Industry is thriving</h3>



<p>The staking industry has grown over 1,550% in the last 12 months, according to our recent <a href="https://www.stakingrewards.com/journal/2021-staking-ecosystem-report/" target="_blank" rel="noreferrer noopener">2021 Staking Ecosystem Report</a>. 19 out of the 20 largest smart-contract platforms are already based on some sort of Proof-of-Stake consensus mechanism, with the $500B Ethereum network planning to migrate to Proof-of-Stake in the next year. According to a recent <a href="https://www.forbes.com/sites/emilymason/2021/07/01/jpmorgan-says-ethereum-upgrades-could-jumpstart-40-billion-staking-industry/" target="_blank" rel="noreferrer noopener nofollow">JP Morgan report</a>, staking is expected to generate $40 billion of staking rewards per year by 2025, and currently staking cryptocurrencies can earn yields ranging from 4% to as high as 14% annually.&nbsp;</p>



<p>At StakingRewards.com, we have become the de facto central hub for all <a href="https://www.stakingrewards.com/sr20-staking-index/" target="_blank" rel="noreferrer noopener">things staking, and our proprietary SR20 Index</a>, which is a reference benchmark for the thriving industry, has outperformed the general crypto market by 3.35x.</p>



<p>Throughout 2021 we have experienced an explosive user growth rate. Combined with our strong brand and unique positioning around staking, we are proud to welcome the leading digital asset investment firms, in order to double down and shoot this rocket bonkers.</p>



<blockquote class="wp-block-quote"><p><em>“I have been following the Staking Rewards team since I began using their site in early 2018, and our team at CoinShares has been looking for a reputable partner to support our ambitious plans for staking related products and services. We see a great opportunity to work closely together as a partner when it comes to research, data, and product development in the staking space.”&nbsp;</em></p><cite> Meltem Demirors, Chief Strategy Officer of CoinShares, and a long friend of Staking Rewards </cite></blockquote>



<p>We have managed to establish a loyal user base that references StakingRewards.com as a source for reliable data and information around passive income streams within crypto.</p>



<p>As the central information hub and leading data aggregator for cryptocurrency staking, we’re on a mission to increase transparency, reduce entry-barriers and enable private users to become financially independent. We make staking easy &amp; accessible.&nbsp;</p>



<p><a href="https://www.stakingrewards.com/about-us/">Learn more about Staking Rewards here.</a></p>



<hr class="wp-block-separator"/>



<blockquote class="wp-block-quote"><p><em>“One of crypto&#8217;s strongest adoption drivers will be passive income opportunities and Staking Rewards is perfectly positioned to capture a large market of those.”</em></p><cite> Christopher Heyman, Partner, 1kx Capital </cite></blockquote>



<hr class="wp-block-separator"/>



<h3>Some thoughts on the growth of Staking Rewards</h3>



<p>We have grown our team from 4 people at the beginning of the year to 15 people right now, and will be 25 people by Q1 2022. The new capital will allow us to double down on research and data quality, while staying unbiased, neutral and providing reliable third-party data points to the ever-growing ecosystem around Proof-of-Stake.&nbsp;</p>



<p>That being said, I would like to highlight all the people, who have made Staking Rewards what it is today:</p>



<ul><li><strong>Our amazing team</strong> &#8211; a group of extremely smart and beautiful humans, who are constantly rocking this boat.</li></ul>



<ul><li><strong>All the close supporters, friends, and investors</strong> &#8211; who constantly push boundaries, inspire us, and help us to grasp the right focus, while we are thinking big.</li></ul>



<ul><li><strong>All our clients and partners</strong> &#8211; who see value in the products and services that we are providing. You are an incremental part of our story, and your feedback is invaluable to us.</li></ul>



<ul><li><strong>Each and everyone of you</strong> &#8211; who have been visiting our website. You are the main driver for us. We are crafting our data, and tools to help you and your peers to establish sustainable passive income streams. Your gratitude is our motivation.</li></ul>



<p>Thank you all for being part of this, and we are extremely excited to take you on a journey to bring Staking to the next 1 billion people, and open the world where we don’t work for money, but the money works for us. Join us.</p>



<p>And if you are just nearly as excited as I am, make sure to spread the word, watch us, recommend us, and make sure to sign up to the <a href="https://www.stakingrewards.com/sr20-staking-index/">waitlist of the SR20</a>.</p>



<p>If you have questions, ideas, or would like to contribute in any way &#8211; let’s talk! We reply to every message.</p>


Staking Rewards raises 3M CHF from the world’s 3 largest digital asset firms.


<h2>The investing classic has some things to<em> </em>teach us about Crypto investments, too</h2>



<p>By now, almost everyone has heard of the classic personal finance book Rich Dad Poor Dad by Robert Kiyosaki. It was written in 2002 long before the world of cryptocurrencies and the digital economy.</p>



<p>Despite the book coming out years before Bitcoin, Kiyosaki is a fan of cryptocurrencies and ESPECIALLY Bitcoin. Here’s one of what is a fairly typical tweet from him at his handle @therealKiyosaki on the subject.</p>



<figure class="wp-block-image"><img src="https://lh6.googleusercontent.com/y419ExVaBMC2URjTPgXQy93AtTPSC5OshfwViLB9arLD6-cC1FB9nZhtwkE4Pj48OkxdJ68jHLPikempuVJe4DOqwOgGOLojz5vbcGnLq6oKqGVp2tkaUQs1hZJpAtwZuA" alt="Robert Kiyosaki"/><figcaption><a href="https://twitter.com/theRealKiyosaki/status/1455203381786525697?s=20">https://twitter.com/theRealKiyosaki/status/1455203381786525697?s=20</a> </figcaption></figure>



<p>And there are some great ideas we can take from the book, both generally, and in the cryptoeconomy too. Let’s look at some examples.</p>



<h2>RDPD Principle: Passive Income is the name of the game</h2>



<p>I put this one first as it’s the most important goal of all. The other principles we discuss here will help you reach your goals. This one is the only tactic that gets you there.</p>



<p>Kiyosaki says that when the amount of passive income from your assets is more than your monthly expenses, then you are free. Not only are you financially free when this happens, but it’s also the ONLY way to be free.</p>



<h3>RDPD’s Favorite Asset Classes</h3>



<p>Although cryptocurrencies weren’t around when the book was written, Kiyosaki is clearly a fan. He believes the stock market is a huge bubble about to burst and not a great place for most of your long-term savings.</p>



<figure class="wp-block-image"><img src="https://lh3.googleusercontent.com/KeK8YV1sYYtHNJS5JvwV7tafWBsr8T96hiFwB2qwG50DVC72eNa6pp1wASgUNujSnOP_YBQAULLBlj-K6ynsaBc-160xGG_eTdRU0208MtYQY4quy4PxOe7pkEN5p08EuQ" alt="Robert Kiyosaki on financial markets"/><figcaption><a href="https://twitter.com/theRealKiyosaki/status/1441994336850251780?s=20" target="_blank" rel="noreferrer noopener">https://twitter.com/theRealKiyosaki/status/1441994336850251780?s=20</a></figcaption></figure>



<p>Yet, one of the issues to keep in mind, as in this tweet from September, is that Kiyosaki has predicted at least 15 out of the last 3 recessions. In fact, if you follow his account, you would think he was short the S&amp;P 500 because he definitely believes that a reckoning is coming to the US financial markets.&nbsp;</p>



<p>A crash did not happen and the biggest drop was ~7% from the recent highs.</p>



<p>And while most crypto investors agree that there are few fundamentals to invest in with US stocks, most of us in crypto do NOT try to predict when it will happen. Just that it will eventually and we need to be in other asset classes like Crypto.</p>



<p>So this means looking at other asset classes that can give us the passive income we need. Passive here means we are not directly working for the money or trading our time for money. It means we are using our assets to make money.</p>



<h3>Staking is a Great Way to Follow Rich Dad Principles and Earn Passive Income</h3>



<p>Staking is a great investing method to hit this goal. Some platforms have aggressive rates to stake their tokens. From our Staking Rewards website, we can see examples like this.</p>



<p>Wildly popular game <a href="https://www.stakingrewards.com/earn/axie-infinity/" target="_blank" rel="noreferrer noopener">Axie Infinity</a> pays 116% APY to stake their coin, AXS.</p>



<figure class="wp-block-image"><img src="https://lh4.googleusercontent.com/c0Oh_BFx7BW2wVJzq7XyDryn-EY0fVk3E3ZHA5RJPiGxXD9zvZuwkGjuXVOf0iQB1QEbq9NA1AkspMbZa-DIksi-1jSvUOsZLvOnuUr2qPyzlEdG9WARwUgN5aj6CbCByA" alt="Staking Axs"/></figure>



<p>Or <a href="https://www.stakingrewards.com/earn/dodo/" target="_blank" rel="noreferrer noopener">DODO</a>, which is a DeFi protocol and liquidity provider, pays you 29.65%, when adjusted for inflation on the release of new DODO tokens.</p>



<figure class="wp-block-image"><img src="https://lh6.googleusercontent.com/RDFh4KpHIucZyoHGxazeEvHBfWeHuWorTjKRH4qUZyNRO_MI58rT5ieEdgsIekCScaEihgGhDkwTjyR_qq8qwaw1eE8Qub5xGk5HUyXdMZV9ocCq20r1w9jxr2YrKTf9rg" alt="Staking DODO"/></figure>



<p>And for those that like more established projects, the #3 market cap coin Binance Coin (BNB) pays a healthy 12.88% or 15.12% based on if you run your own validator or not.</p>



<figure class="wp-block-image"><img src="https://lh5.googleusercontent.com/NI_PU03PNlhBfDy_DP8fCnvsAOFV2AWdAeFi-Gg-nTF7feLq3J-lhRNIYRsa_YC6pTNqyOa_3CAwA67vBOzXFBY6N15xCEnylzPjIU1rY1HYAtrKDOLkRtORMQH-Jz_obw" alt=""/></figure>



<p>Back to the Rich Dad Poor Dad principles, on the same base of assets, say $100,000, it’s clear you will earn more passive income at higher interest rates. BNB at 12.88% will beat most income-producing real estate that averages a net return of 6-8%.</p>



<p>More importantly, as we’ve shown in other <a href="https://www.stakingrewards.com/journal/retire-on-passive-income-with-staking/" target="_blank" rel="noreferrer noopener">Passive Income articles</a> here, our base of assets can be smaller and still get us a good income when we do things like staking crypto. In our above example, we earn $6-8000 per year from $100,000 in real estate. With the BNB investment, to earn $6000, we only need $46,583 to earn the same amount.</p>



<p>Our knowledge of staking lets us start with less and still get to our passive income goals sooner.</p>



<h2>RDPD Principle: Assets &gt; Jobs</h2>



<p>Income from an asset is ALWAYS better than income from a job. With a job, your income is locked into the place you work and the amount. Assets have much more flexibility. You can often move assets from a poor-performing investment to a better-performing investment easily.&nbsp;</p>



<p>Not always, of course. You can’t move a rental house from a terrible neighborhood to a middle-class neighborhood. But many assets you can move around. And with a job, you can never do that. You are always limited by the salary you negotiate and company policies. This is even true for commission-based earners who earn more money in some years and less in other years.</p>



<p>One of the great things about crypto as an investment, especially staking, is you can start small. You can start with only a few hundred dollars. And you certainly can’t do that with a rental house in most cases. The BNB example shows how you can get your assets working harder for you by staking even when you are investing less money.</p>



<h2>RDPD Principle: Assets &gt; Liabilities</h2>



<figure class="wp-block-image"><img src="https://lh6.googleusercontent.com/PODtPIAt7BjdEkuqNu9_1lvmC0eE9eWE56pqBVhnd5-Iovewma8dQwcooMWkzZchTRtqsjL8yQ79d4x894f8F3Iv_HxFSozkYkkbvhg88z6BgXakkHWzEDu3xUk5BkInaA" alt="Robert Kyosaki on Crypto"/><figcaption><a href="https://twitter.com/BitcoinMagazine/status/1449154434051813381?s=20" target="_blank" rel="noreferrer noopener">https://twitter.com/BitcoinMagazine/status/1449154434051813381?s=20</a></figcaption></figure>



<p>Kiyosaki explains this one concept better than any accounting book I’ve seen. An asset puts money in your pocket. A liability takes money out of your pocket.</p>



<p>And this is why, as we will see in the next principle, that it’s smarter and less risky to think of your house as a liability instead of an asset. More details to come on that.</p>



<p>Building those assets is something that only happens over time. Another place where crypto shines as an investment option is the ability to shorten that time.</p>



<p>Crypto is an asymmetric bet on the future of the digital economy. What we mean by asymmetric is that the returns can be enormous compared to the risks you are taking. This reason alone is why young people in the Millennial and Gen Z groups are flocking to crypto as an investment. That’s a trend that will continue that we cannot ignore.</p>



<p>And within that asymmetry, one of the safest ways to grow your assets is staking. Because you are not only buying crypto you believe in, but you are also earning more money in that crypto.</p>



<h3>Staking is Low Risk Yet Often Misunderstood</h3>



<p>For some reason, this concept is misunderstood by many. I mean do you think Mastercard is a risky investment? They are a toll company for the most part. They maintain the Mastercard network and charge a small fee (the toll) for payment on every single transaction that goes through their network. It’s an amazing business model.</p>



<p>And with staking, YOU get to be Mastercard. Let’s say you are convinced that Solana has a bright future competing with Ethereum. Then staking SOL means you are earning a piece of every fee the network charges to send SOL from one wallet to another. You are Mastercard. Instead of paying the card issuer, the card issuer is paying you. Because staking is holding an asset.</p>



<p>Isn’t that a nice place to be if you believe in cryptocurrency?</p>



<h2>RDPD Principle: Don’t be fooled into thinking your personal residence is an asset when it’s really a liability</h2>



<p>As we just explained above, if a liability takes money out of your pocket, then your home is a liability. I mean who pays when you need a new furnace or if you add a deck to it? You do. And the regular maintenance for upkeep can get expensive.</p>



<p>The other main reason your personal residence is a liability is the fact that you have to live somewhere. You would be paying something one way or the other. Now income-producing real estate is one of Kiyosaki’s favorite assets to get us to that passive income goal.</p>



<p>But how does that compare with Crypto, especially with Staking crypto?</p>



<figure class="wp-block-table"><table><tbody><tr><td>Feature</td><td>Income Producing Real Estate</td><td>Staking Cryptocurrency</td></tr><tr><td>Liquidity</td><td>Very illiquid</td><td>Completely liquid except for lockup periods</td></tr><tr><td>Investment Principal</td><td>Locked into the Property</td><td>Maybe subject to short lockups of 1-3 months. Then easy to move elsewhere</td></tr><tr><td>Income</td><td>In your ‘home’ fiat currency</td><td>In the crypto that you stake</td></tr><tr><td>Your Market</td><td>Locked in</td><td>If fundamentals change, you can sell your ADA and stake SOL instead easily</td></tr><tr><td>Return Potential</td><td>Average 6-8% net</td><td>Many established projects pay more than 10%, some MUCH more</td></tr><tr><td>Additional Costs/Maintenance</td><td>Yes, repairs and upkeep</td><td>No</td></tr></tbody></table></figure>



<p>So you can see that staking cryptocurrencies has advantages over real estate. And that’s with us admitting that real estate is a good investment option compared to most. One of our favorite benefits is that we benefit from the network effects from the cryptos where we stake. You already believe in the specific crypto if you’ve bought it. Why not help it grow and participate in the fees that protocol generates?</p>



<p>Its beauty is its simplicity.</p>



<p>And this is why although Rich Dad Poor Dad predates the cryptoeconomy, Kiyosaki is a big fan of it. It meets all his parameters of an asset class worthy of investment.</p>


Applying “Rich Dad Poor Dad” Principles to Staking Cryptocurrencies


<p>In the <a href="https://www.stakingrewards.com/journal/ethereum-and-the-7-challengers-part-1/" target="_blank" rel="noreferrer noopener">previous post</a>, we looked into seven projects which are attempting to dethrone Ethereum. We introduced each of the seven and briefly discussed their tech and how they aim to steal the crown from Ethereum. Clearly, some projects have made major inroads when it comes to factors like transaction speed, costs. We now take this analysis a step further.</p>



<p>Here, we will delve deeper into these seven projects, evaluating factors including ease of usability and developer interest, level of decentralization, governance framework, security setup, features and more. Which of these projects has it in them to dethrone Ethereum the Goliath, and emerge as the David in this story?</p>



<h2>Level of decentralization</h2>



<p>One measure of estimating the level of decentralization on a blockchain is the number of validators. The chart below puts into perspective the number of validators across each of the seven challengers outlined.</p>



<figure class="wp-block-image"><img src="https://lh5.googleusercontent.com/di6sCXF_wIn0jm8fduzDTJREklFd_MjQUEP0Hd3Mbocz4WkpWx_8zfBeA1LOxSO7dbiZofUP---W8wOAnBr2cuEnDyuXDtKdCAWuLFDjVgV6JasnbfdRzfxkrh9tbxt_-A" alt="Validators"/></figure>



<p>Among the projects selected, Cardano with 2076 validators, Solana with 1065 and Avalanche with 1057 validators clearly lead the rest in terms of number of validators. The higher the number of validators, the greater the level of decentralization on a network.&nbsp;</p>



<p>Taking this a step further, it helps to look at what is known as the Nakamoto coefficient. <a href="https://news.earn.com/quantifying-decentralization-e39db233c28e" target="_blank" rel="noreferrer noopener">First proposed by Balaji Srinivasan</a>, the Nakamoto coefficient is a quantitative measure of a system’s decentralization. It helps determine how many entities one would need to be compromised to control a system. The higher the value of this minimum Nakamoto coefficient, the more decentralized the system is. Among the three listed above, Cardano has a Nakamoto coefficient of 24 (Source: <a href="https://www.adapools.org/groups" target="_blank" rel="noreferrer noopener">ADApools.org</a>), Solana has a Nakamoto coefficient of 19 (Source: <a href="https://solanabeach.io/validators" target="_blank" rel="noreferrer noopener">Solana Beach</a>), while Avalanche has a Nakamoto coefficient of 26 (Source: <a href="https://thecurrencyanalytics.com/altcoins/why-avalanche-avax-is-the-most-decentralized-pos-blockchain-31778.php" target="_blank" rel="noreferrer noopener">Industry Reports</a>).</p>



<p>Another measure of decentralization is the level of staked tokens. This is basically the percentage of eligible tokens that are being staked. As seen below, Solana (77.93%), Binance (76.54%), Tezos (75.53%), and Cardano (70.86%) have over 70% of eligible tokens staked.</p>



<figure class="wp-block-image"><img src="https://lh3.googleusercontent.com/mpSkIsIeuxNwDWj0cOqCXmZBUjERDZvExVvmuWfMcL0E6UOVdDv19wn6F-F8cXJhr73LxpQyKaNwnaHOngDJsEb2Y1FxHEE7qm_JAr4XXt7-SVttQrcJlz71TEsfRuta_A" alt="Ethereum Competitors Staking"/></figure>



<h2>Developer interest</h2>



<p>A recent report by <a href="https://outlierventures.io/wp-content/uploads/2021/09/Blockchain-Trend-Report-Q2-20-21.pdf" target="_blank" rel="noreferrer noopener">Outlier Ventures</a> brought out some interesting statistics (period under consideration: July 20 &#8211; June 21) on developer interest in some of these blockchains. Here are some highlights,</p>



<ul><li>Cardano ranks the highest in terms of average GitHub commits per month (CPM). It registered an average of 701 CPM. Ethereum ranks second highest, with an average of 447 CPM. Solana, Avalanche and Polkadot registered CPM&#8217;s of 247, 237 and 221 respectively.</li><li>Avalanche is a clear winner when it comes to an overall increase in the commits on its blockchain. AVAX recorded a growth of 709.7% of total commits in the recent 12-month period compared to the last one, going from 1,553 commits per year (CPY) to 12,575 CPY.</li><li>Ethereum demonstrated a high number of monthly active developers averaging 168 per month. Cardano had 165 active developers per month. Polkadot averaged 68 active developers per month.</li></ul>



<p>Extending this, which of these platforms is stealing the show when it comes to the trendy sectors within blockchain? Think, <strong><em>DeFi, NFT, Gaming.</em></strong></p>



<h3>DeFi</h3>



<p>According to data aggregator <a href="https://defillama.com/home" target="_blank" rel="noreferrer noopener">DeFi Llama</a>, over $256 billion has been locked into <strong>DeFi</strong> protocols. Of this, nearly 67.5% involves DeFi projects built on Ethereum. However, what&#8217;s interesting to note is that Ethereum&#8217;s dominance has decreased from 97.6% at the beginning of the year. From the projects included in this comparison, networks including Binance, Solana and Avalanche have been eating into Ethereum&#8217;s market share. For a perspective, Solana&#8217;s popularity has grown tremendously over the past few months among DeFi projects. The total value locked (TVL) of all DeFi projects built on Solana is currently at <a href="https://defillama.com/chain/Solana" target="_blank" rel="noreferrer noopener">$14.9</a> billion (5.8% of the overall share), as against 592 million (0.50%) as of 30th June 2021. Avalanche, on its part too, has been making inroads in Ethereum&#8217;s and Binance&#8217;s dominance, with a near 47X growth in TVL since the mid of the year.</p>



<figure class="wp-block-image"><img src="https://lh3.googleusercontent.com/_yu1x67UFPSNbsVYklRkGONAfW55cpTfYzedXg8XeCATQxbP6bJ7p3Qkinq07EuqCzGRjTNGTaw_Vf9g_acYAoAaIsQyC4MJlpu3FzuX2m1qWdYjvYnmhRSssCMEjt0GpQ" alt="Ethereum Competitors TVL"/></figure>



<h3>NFTs</h3>



<p>When it comes to NFTs, Ethereum dominates the space with most collections, marketplaces, and dApps (Source: <a href="https://dappradar.com/nft/marketplaces/protocol/ethereum" target="_blank" rel="noreferrer noopener">DappRadar</a>). However, with well-known downsides in terms of limited scalability (we touched upon TPS in the previous part of this article) and exorbitant transaction fees, other blockchains have been making their mark in this space. Binance Smart Chain, for one, offers significantly lower fees and faster transactions. However, BSC has found limited appeal within the NFT space. Solana, though, has been making rapid inroads in this space. Its <a href="https://solana.com/ecosystem?categories=nft" target="_blank" rel="noreferrer noopener">ecosystem</a> boasts 193 NFT projects.</p>



<h3>Gaming</h3>



<p>On Gaming, Ethereum-based Axie Infinity dominates the space (30 days trading volume is $2.3 billion with over 661K users). However, <a href="https://twitter.com/cz_binance/status/1421327274738028546?s=20" target="_blank" rel="noreferrer noopener">BSC&#8217;s focus on gaming</a> has been evident. As per DappRadar, 15 of the top 20 blockchain games by volume are BSC based.</p>



<h2>Programming languages supported</h2>



<p>Solidity is the programming language popular amongst Ethereum developers. It is designed for developing smart contracts that run on the Ethereum Virtual Machine (EVM). Here&#8217;s a look at the programming languages supported across each of the blockchain outlined:</p>



<figure class="wp-block-image"><img src="https://lh5.googleusercontent.com/t2mS0sbq8Q4FgaGknI9KYS726JApkcxzgv4Wqa5CCWUDU9msqy2FyQ8wQQAhLGwnQZdaHj_goS1oaNmLC86iHu0IlW15zAmmYPO1Lxpij_apKL05BBacJihayTMyofUDfA" alt="Ethereum Competitors Programming Language"/></figure>



<h2>Governance framework</h2>



<p>As against off-chain governance methods (both Bitcoin and Ethereum utilize off-chain governance processes), on-chain governance widens the participants in a blockchain governance process. This aids in limiting the threat of chain splits and forks. Of course, both mechanisms have their pros and cons, and are expected to continue evolving over time. Here&#8217;s a quick take on the governance framework of the blockchains discussed,</p>



<h3>Cardano</h3>



<ul><li>Operates an off-chain governance model</li><li>Input Output Hong Kong (IOHK) and the Cardano Foundation develop and implement protocol updates</li><li>The off-chain governance model will continue until the network reaches the <a href="https://roadmap.cardano.org/en/voltaire/" target="_blank" rel="noreferrer noopener">Voltaire era</a></li><li>Participants, then, will be able to use their stake and voting rights to influence the future development of the network</li></ul>



<h3>Binance Smart Chain</h3>



<ul><li>Binance provides on-chain governance through the Proof of Staked Authority (PoSA) consensus</li><li>BSC has system parameters to dictate network behavior, including slashing amounts, cross‐chain transfer fees, etc. These parameters are defined by the BSC validator set using a proposal‐vote process on Binance Chain</li><li>Anyone can submit a proposal on Binance Chain to update BSC parameters&nbsp;</li></ul>



<h3>Solana</h3>



<ul><li>The Solana Foundation, a non-profit organization, owns Solana’s IP, and alongside Solana Labs, aids in establishing the development direction&nbsp;</li><li>Solana Labs will remain a core contributor to the protocol</li><li>There have been no plans indicated for on-chain governance. It has a delegated proof-of-stake (DPoS) system that allows token holders to select the validator set. However, there is no roadmap for a token-weighted voting system</li></ul>



<h3>Polkadot</h3>



<ul><li>Parity Technologies built the Polkadot protocol and Substrate framework, controlling much of the process initially</li><li>In July 2020, control over the protocol was transferred to the network&#8217;s proposed on-chain governance system</li><li>Network participants are now the primary source of upgrade submissions and approvals</li></ul>



<h3>Avalanche</h3>



<ul><li>Avalanche provides on-chain governance for critical parameters of the network, letting participants vote on changes to the network and network upgrades&nbsp;</li><li>However, Avalanche does not allow unlimited changes to arbitrary aspects of the system. Instead, only a pre-determined number of parameters can be modified via governance</li></ul>



<h3>Tezos</h3>



<ul><li>Tezos employs an <a href="https://messari.io/resource/on-chain-governance" target="_blank" rel="noreferrer noopener">on-chain governance</a> system&nbsp;</li><li>The governance mechanism enables bakers (validators) to vote on upgrade proposals</li><li>A proposal can only be accepted if it has a super-majority (over 80%))</li><li>The Tezos Foundation runs eight bakers capable of casting nearly 30% of the voting power (Source: Messari)</li></ul>



<h3>Near Protocol</h3>



<ul><li>Open to contributions from the community, anyone can submit or comment on a NEAR improvement proposal.&nbsp;</li><li>Governance discussions take place within the <a href="https://gov.near.org/" target="_blank" rel="noreferrer noopener">NEAR forum</a>&nbsp;</li><li>The timing of the proposal&#8217;s implementation will depend on the change&#8217;s urgency</li></ul>



<h2>Security setup</h2>



<p>The switch to ETH 2.0 has raised concerns in areas including a network split, a security breach due to a possible vulnerability in the code. On its part, ETH 2.0 has been devised with a focus on security, making potential attacks extremely costly. ETH 2.0 requires a minimum of 16,384 validators. Security audits of ETH 2.0 code are being carried out by organizations including Least Authority and Quantstamp. The Ethereum Foundation is also setting up a security team to research possible cybersecurity problems.&nbsp;</p>



<p>While most of the blockchains listed here are less susceptible to breaches such as a 51% Attack, given the wider adoption of the Proof of Stake model as against Proof of Work, there remains a focus on improving safety and security across all networks. Here&#8217;s a look at some of the unique security measures implemented within a few of the blockchains considered here,</p>



<p><em>Polkadot</em>: Polkadot, by way of the Relay Chain, has built a system where different blockchains are incentivized to pool their resources and secure the system as a whole. This makes it more difficult for an attacker to gain control over the consensus process.</p>



<p><em>Binance Smart Chain</em>: A number of “rug pulls” and exploits on BSC has often raised questions around the chain&#8217;s security. BSC&#8217;s security algorithm, known as Proof-Of-Staked-Authority (PoSA), is controlled by 21 node operators. The BSC Security Alliance recently released a <a href="https://www.binance.org/en/blog/beyond-the-big-bang-security-report/" target="_blank" rel="noreferrer noopener">whitepaper around security</a> highlighting concerns around potential vulnerabilities and outlining measures to go beyond security audits, bounty programs, and dApps monitoring.</p>



<h2>Community</h2>



<p>Here&#8217;s a quick look at the communities across two popular crypto social media channels, Twitter and Telegram, across each of these projects,</p>



<figure class="wp-block-image"><img src="https://lh4.googleusercontent.com/j8acxtcFFACgSLV2cM1h-FV-25zctimj2W7rd__-AdBgcWobHJuXjXBdFMy7YKJvnEy7KqpmIJMAb9gnHdPGjmQpW0ZHmtBhGAdefvip-8rD9cTt3HLIrFP-gZ_xnAK4XA" alt="Ethereum Competitors Community"/></figure>



<h2>In conclusion</h2>



<p>Ethereum’s network effects as a technology remain unmatched. Besides, it enjoys a far superior degree of trust, security, and dependability given its lineage. Ethereum’s success going forward is heavily dependent on Layer 2 solutions. With the potential to move the majority of transactions off the chain, these Layer 2 solutions could hold the key to some of the Ethereum network&#8217;s current woes, transaction processing speeds and gas fees. While some of these Layer 2 solutions, example Matic (Polygon), have successfully proven their effectiveness, a large number of the Layer 2 solutions are in development or testing stages. Here&#8217;s where the rest of the blockchains stand an opportunity.&nbsp;</p>



<p>Clearly, the dominance of Ethereum has begun to shrink, as reflects in the TVL. From a dominance of over 97% in TVL (31st Dec 2020), Ethereum today holds roughly 67% of the TVL.&nbsp;</p>



<p>As seen in the previous part of this series, blockchains including Solana and Binance Smart Chain have gone way past Ethereum when it comes to TPS and cost per transaction.&nbsp;</p>



<p>Cardano, with an average of 702 commits per month (12-month period till June 2021) surged past Ethereum with an average of 447 CPM. The segment of DeFi which has been in focus through the year has seen projects including Solana and Avalanche make inroads over the past few months into Ethereum&#8217;s and Binance&#8217;s dominance.</p>



<p>Over the last year, Layer 1 platforms have emerged threatening to dethrone Ethereum. It&#8217;s clear though that competition is cut-throat and newer Layer 1 platforms have to focus on retaining users. The lure of return on capital is extremely strong in the crypto market and blockchains will have to present niche use cases, nimble-footedness to keep up with the emerging trends in the space.</p>


Ethereum and the 7 Challengers – Part 2: Does ETH 2.0 ward them off?


<p>A centralized finance (CeFi) platform, <a href="https://www.stakingrewards.com/savings/nexo/" target="_blank" rel="noreferrer noopener">Nexo</a>, lets users earn interest and avail of loans on their cryptocurrencies. Operating since 2018, Nexo is among the largest lending institutions in the digital finance industry. <a href="https://nexo.io/ref/stakingrewards" target="_blank" rel="noreferrer noopener">Nexo</a> claims to manage assets for over 2 million users across 200 jurisdictions. Total assets under management (AUM) stands at <a href="https://real-time-attest.trustexplorer.io/nexo" target="_blank" rel="noreferrer noopener">over $12.5 billion</a>, an over 200% jump from a year ago. As of Q3 2020, the total AUM for Nexo stood at $4 billion. The platform also has a native token, NEXO, which aims to nurture a loyalty program, bringing with it higher earning rates and low borrowing rates. </p>



<p><em>Read on to know more about Nexo, and see if it fits your criteria of an ideal staking service provider. I tried out the service. So I&#8217;ll share my experience within this post.</em></p>



<figure class="wp-block-image"><img src="https://lh5.googleusercontent.com/Yw7SjxV6EbCwNRsyCZINhxkmjSpYe3ZUMgmkpeCyiBPRnrTz_Sq1iumYIUhqE2WBCw5pJPKS6YSxbdLA658hrjCzuEbpTmnC0D5EYNgY7TRmoavsLmLZSPg_Y3ak84MPIQ" alt=""/><figcaption>Source: Nexo</figcaption></figure>



<p>Firstly, creating an account was fairly straightforward and the advanced verification, which included scanning an official ID and a face scan, went off really smoothly and was completed in a matter of minutes.&nbsp;</p>



<p>Purchasing crypto, let&#8217;s say, Bitcoin for example, with a card, came at a cost of 1.49%. For non-EU countries, the charge for card purchases is 3.49%. To get an idea of the amount of crypto received against FIAT purchases, check out their <a href="https://nexo.io/buy-crypto" target="_blank" rel="noreferrer noopener">calculator here</a>. If you are new to cryptocurrencies and looking to buy crypto for the first time, the cost of purchasing crypto with FIAT, in my own personal experience, would not be too different from the rates here. However, please do your own research here. Also, Nexo supports transferring cryptocurrencies from any other exchanges or wallets you may be holding them on. As always, please ensure taking proper note of the address and chain. The platform supports Visa and MasterCard purchases, and the interface was fairly intuitive.&nbsp;</p>



<h2>Delving into the product offerings at Nexo</h2>



<p>Before delving into the products at Nexo, it helps to understand their business model. Quite like a traditional bank, Nexo offers interest on depositing assets and charges interest on giving out loans. The difference between the interest earned and the interest paid out translates into their profit margin. Obviously, given the nature of assets involved here i.e. cryptocurrencies, which may be considered a highly volatile asset class, there are certain adaptions to the business model. This typically involves the adoption of various risk management strategies, including higher collateral and the use of under-leveraging. Let&#8217;s take an example to delve further. A $100 loan on Nexo, for example, would require collateral equivalent to 0.00323453 Bitcoin i.e. $200, at the time of writing, translating into a 50% loan-to-value (LTV). </p>



<p>The same loan using Polkadot (DOT) as collateral has a 30% LTV. A lower LTV protects clients from the daily fluctuations of crypto prices, thus making it less likely that a client will end up losing their crypto. At the same time, it also ensures Nexo is protected, should a user default on a loan. Beyond this, the platform implements the Nexo Oracle which tracks cryptocurrencies’ prices in real-time, thus managing risks. If, for example, the price of the assets deposited as collateral drops, the Nexo Oracle mitigates the risk of potentially having to sell off a portion of a client’s assets by sending notifications to the borrower. This could either include the borrower topping up the collateral or making a partial repayment.</p>



<h2>Nexo Products and Services</h2>



<p>Nexo&#8217;s products and services can also be availed of in a desktop and app version. The app is available on Google Play and AppStore. It&#8217;s easy to use, mimicking functionalities of the desktop platform and comes with a focus on necessary security measures. This includes 2FA authentication and biometric identification, withdrawal confirmations &amp; log-in Alerts. A quick mention here, the app enjoys a rating of 4.5 on Play Store (15,202 ratings) and 3.6 on App Store (578 ratings). Here&#8217;s a quick look at Nexo&#8217;s products:</p>



<h3><strong>Earn Crypto Interest</strong></h3>



<p>One of the mainstay products of Nexo, <em>Earn Crypto Interest</em> advertises an APR of up to 12% APR, paid out daily. Currently, this is offered on over 20 assets. Bitcoin and Ethereum and most major cryptocurrencies invite an annual interest of up to 5%. This, though, depends on the user&#8217;s progress within the NEXO loyalty program. The chart below spells this out, detailing how moving up loyalty tiers depends on the percentage of NEXO tokens held in your portfolio. There&#8217;s more on the loyalty program later in the post.</p>



<figure class="wp-block-image"><img src="https://lh4.googleusercontent.com/QFwDebXVfiMVi9GfE0DtjNIkLe-Zeptp5LPwVdxBrlcmuhzTaw5gfYMp9hbpn3nLaCkGGuHTN1UGQ0nbQPU_MYtE8is3xvtjnUT3vrM6C1up9gDvg-iam1G4l9CTXg5PTw" alt=""/><figcaption>Source: Nexo</figcaption></figure>



<p>A Base account with, let&#8217;s say, no NEXO tokens within one&#8217;s portfolio maintained on the platform, will earn you an interest of 4%* on most major cryptocurrencies supported. Opting to have your interest credited in NEXO tokens can attract an additional 2% rate. The interest rate on Stablecoins goes up to 8% per annum.</p>



<p><br>* FLEX Interest Rate is the current interest rate compounding daily on the balance. It consists of the Savings Interest Rate of one&#8217;s Loyalty Level and the 2% bonus rate when one opts-in to receive the interest in NEXO Tokens.</p>



<figure class="wp-block-image"><img src="https://lh3.googleusercontent.com/sLk4T46Dt51Xw0Lu7e3Pw8d8CwDSkbxjK5YzWX3xnnMUH1XXezEZHi3zg255Ls0thbFPgaNOar7-mOPkQbTNpQcWqWGyxrzOST_sH1zzSA7mKkemoPnpR-CcOzD1_mqkRw" alt=""/><figcaption>Source: NEXO press kit</figcaption></figure>



<h3><strong>Instant Crypto Credit Lines™</strong></h3>



<p>Nexo offers over 20 collateral options and in excess of 40 fiat currencies and stablecoins to borrow in. The process of borrowing is fairly straightforward with instant approval. It typically involves, topping up your collateral, which makes your available credit immediately known, giving you the option to borrow. </p>



<p>Let&#8217;s take a look at this product with an example. To borrow an amount of $1000, you need to provide collateral equivalent to 0.03 BTC ($2010 as of 20 October 2021). You will pay an interest of 13.9% a year at the Base Loyalty Level (refer to the chart above). Depending on the percentage of NEXO tokens staked can lower the interest rate to 6.9% per year.&nbsp;</p>



<h3><strong>Nexo Card</strong></h3>



<p>Finally, completing the NEXO ecosystem is the NEXO Card. Offering 2% cashback on every purchase, the card lets you choose to receive rewards in NEXO Tokens or BTC.</p>



<h2>The team at the helm</h2>



<p>The team is led by <a href="https://www.linkedin.com/in/antoni-trenchev" target="_blank" rel="noreferrer noopener">Antoni Trenchev</a>, co-Founder &amp; Managing Partner. Prior to NEXO, Antoni managed his own hedge fund and was also the Chief Innovation Officer (CIO) of the largest fashion retailer in Bulgaria, MDL Ltd. Interestingly enough, earlier he served as a Member of Parliament in Bulgaria, campaigning for legislation to enable blockchain solutions for government services, including e-voting. Another co-founder of NEXO is <a href="https://www.linkedin.com/in/kalinmetodiev" target="_blank" rel="noreferrer noopener">Kalin Metodiev, CFA</a>. Kalin has served as the Chairman of the Managing Board of the CFA Society Bulgaria since 2005. He carries extensive experience in the field of Corporate Finance and Investment Banking.</p>



<h3>Security and Insurance</h3>



<p>Obviously, as a user, security takes precedence in selecting a provider when it comes to crypto lending and borrowing. Nexo&#8217;s taken some major steps in building trust within this area. By partnering BitGo and Ledger Vault, Nexo has availed of coverage of $375M in insurance protections for digital assets held on the platform, protecting it against security breaches. So far, in its operating history, Nexo has never faced a security breach.</p>



<h3>Compliance &amp; Risks</h3>



<p>Besides this, Nexo has initiated a number of partnerships focused on compliance with regional regulations and global KYC and AML standards. Recently, Nexo engaged Armanino LLP, an accounting firm in the US, to provide attestations over assets and liabilities. A real-time Proof of Reserves assessment is available <a href="https://real-time-attest.trustexplorer.io/nexo" target="_blank" rel="noreferrer noopener">here</a>. This is indeed a major step towards transparency, especially given a platform like Nexo involves a high degree of centralization.</p>



<p><a href="https://nexo.io/licenses-and-registrations" target="_blank" rel="noreferrer noopener">Here&#8217;s a full list</a> of licenses and registrations Nexo has across jurisdictions worldwide. In fact, just recently, Nexo was in the news after being named by New York Attorney General James among two crypto lending companies to cease operations, citing failure to register the business in New York. On its part, <a href="https://cointelegraph.com/news/crypto-lender-nexo-confirms-nyag-order-calls-it-a-mix-up" target="_blank" rel="noreferrer noopener">Nexo said it is not offering its Earn Product and Exchange in New York</a>. The matter is ongoing.</p>



<h3>Community &amp; Support</h3>



<p>Clearly, Nexo has developed a strong community, which reflects across its social channels. Regular updates, as is the case with any project, always helps, and the team seems to be on top of this. A look at the <a href="https://twitter.com/NexoFinance" target="_blank" rel="noreferrer noopener">Twitter account</a> reflects this. Here&#8217;s a look at the followers across its social channels, compared to some other prominent providers:</p>



<figure class="wp-block-image"><img src="https://lh6.googleusercontent.com/nELIp7dhO_48nNi7OiJ6dQjmohO_X5REaNZwgW8ZXLAKNh5VOXyUxHlZqqnyxdCvMvfphn7l8UuE-a9iOGxsIBPzzGcO3Mx8Hvs-94sIyHVVMzOR_SKs1ipxvSMUJspQOA" alt=""/></figure>



<p>The community seems engaged and all of the social channels seem updated and well covered. There&#8217;s also an effort in terms of educating the community with the regular AMA&#8217;s and knowledge-based Brainer sessions on YouTube.<br><br>One thing that stands out for Nexo is that it enjoys a rating of 4.6 on Trustpilot with nearly 6500 reviews. That is significantly higher than BlockFi and Celsius Network.</p>



<h2>Competition &amp; Comparison</h2>



<p>As outlined earlier, Nexo&#8217;s total AUM stands at over $12.5 billion, making it among the top players within this space. To put this in perspective, <a href="https://www.stakingrewards.com/journal/blockfi-the-better-savings-account/" target="_blank" rel="noreferrer noopener">BlockFi</a> has over $15 billion AUM, while <a href="https://www.stakingrewards.com/journal/lending-and-borrowing-with-celsius-network/" target="_blank" rel="noreferrer noopener">Celsius Network</a> has over $26 billion in AUM. </p>



<p>How does Nexo compare with Celsius Network or BlockFi on rates offered? Let&#8217;s assume $1000 worth of Bitcoin. Taking a base case scenario, Nexo offers a 4% interest rate on BTC deposits. BlockFi has a tiered structure, offering 4.5% on Bitcoin deposits of similar value. Celsius Network, at the time of writing, is offering 6.20% on Bitcoin deposits. Benefits vary depending on the loyalty program tier, among other criteria.&nbsp;</p>



<p>Nexo does have a strong loyalty program which comes with a number of benefits depending on the loyalty tier, which encourages trade in the native token NEXO. The chart below provides an overview of the loyalty program:</p>



<figure class="wp-block-image"><img src="https://lh4.googleusercontent.com/Y8SWA1b1ZRe8in8BuiV6PaX3FO3y3ZKI7yRkgE7KEdOP7NhHoYirLI4we49lF0qHbGklIdnQcPsV5ZrYjaCnoLCvchnUvLqN4crcVqUxheF3_1mFe67LAAK_URuITKGpJw" alt=""/><figcaption>Source: Nexo</figcaption></figure>



<p>On the fees, once the free withdrawal limit is reached, users are automatically charged a fee incurred by the network. The fee is not fixed and depends on the current condition of the respective blockchain.&nbsp;</p>



<h2>The NEXO token</h2>



<p>Launched in 2018, the <a href="https://www.stakingrewards.com/earn/nexo/" target="_blank" rel="noreferrer noopener">NEXO token</a> is the basis of the platform&#8217;s loyalty program. Depending on the amount of NEXO tokens held as a percentage of one&#8217;s portfolio, it can invite higher yields, better rates on borrowing, a greater number of free withdrawals and so on. Currently, there are 560 million tokens in circulation from a maximum supply of 1 billion. At the time of writing, the token is valued at $2.69, with a market capitalization of $1.52 billion.&nbsp;</p>



<h2>Summary</h2>



<p>As highlighted in one of our <a href="https://www.stakingrewards.com/journal/staking-how-to-earn-yield-safely-with-crypto/" target="_blank" rel="noreferrer noopener">recent posts</a>, centralized finance apps, like NEXO, have been seeing growing popularity, as reflected in their AUM growth. Ease of use, limited tech knowledge to get going, are some reasons these platforms find favour when it comes to earning a yield on crypto assets.&nbsp;</p>



<p>Here, I&#8217;ve summarised a few pros and cons of the platform as I see them,</p>



<figure class="wp-block-image"><img src="https://lh3.googleusercontent.com/ERCalPymQGrPVDK-PeB5GHzdZxfrXENZ_DDkQ3-2u9ff1_s9F6KzQBjrqJVa0MU9xyZJatICEH4zkPyosYNx_-U9i-HhYi6mhh2mbiU7pCnjfIDk9VKv5s2QQ5wuzm-Yhg" alt=""/></figure>



<p>On NEXO specifically, it is among the frontrunners in its area of operations. With a lineage of over 3 years, backed by an experienced and well-respected team, a focus on safety and security, NEXO seems to tick most of the crucial checkboxes a crypto lending and borrowing service provider must have in place. What particularly stood out was a seamless and intuitive platform, which makes the usage very easy. The platform seems to enjoy a strong level of stickiness with the community which reflects in the ratings it enjoys. This is reciprocated by the team with regular updates and interactions, keeping the community informed.&nbsp;</p>



<p>However, as is the case with other providers, there is a high degree of centralisation at <a href="https://nexo.io/ref/stakingrewards" target="_blank" rel="noreferrer noopener">Nexo</a> too with the involvement of the company. Accordingly, risks persist. So it is essential you are aware of that. </p>


Nexo: Is this the one to &#8216;Unlock the Power of Your Crypto&#8217;?

Universal Basic Income: Is Circles a Viable Blockchain Solution?

Liquid vs. Illiquid Staking – What is better?

Liquid Staking and Liquidity Mining with LKSM – More than Staking on Kusama


<h2>Why Crypto Beats TradFi Options Like Stocks &amp; Real Estate</h2>



<p>You already know if you are reading this that crypto crushes bank rates for earning income. But there are other good ‘traditional’ investments out there. Investments like:</p>



<ul><li>Interest rates in emerging markets</li><li>Dividend-paying stocks</li><li>Buy to let properties (real estate for investment)</li><li>Peer to peer lending</li></ul>



<p>And how do they stack up against crypto? Let’s take a look…..</p>



<h2>Interest Rates in Emerging Markets</h2>



<p>There’s no question that in some emerging markets, your bank account will see high-interest rates. Argentina citizens can get a <a href="https://www.statista.com/statistics/454492/interest-rates-on-fixed-1-year-deposits-by-country/" target="_blank" rel="noreferrer noopener">one-year fixed deposit account that pays up to 34%</a>. That’s huge for a bank. So if you can qualify to open a bank account there, should you?</p>



<p>Probably not for two reasons:</p>



<ol><li>Inflation</li><li>Currency devaluations</li></ol>



<p>Argentina was considered a possible case of hyperinflation until just recently by the <a href="https://www.batimes.com.ar/news/economy/world-bank-economist-rules-out-risk-of-hyperinflation-in-argentina.phtml" target="_blank" rel="noreferrer noopener">World Bank</a>. Their current inflation rate is more than 50% year over year meaning you lose purchasing power even at 34%.&nbsp;</p>



<p>And then we have the second problem, that you are paid in ARS (Argentina Pesos). The ARS consistently loses its value faster than most other currencies. So your declining purchasing power after a year also gets you fewer dollars, Euros, Pounds, or Bitcoin.</p>



<p>Unless you have assets or expenses in an emerging market currency, it’s probably not a good idea to chase yield there.</p>



<h2>Dividend-Paying Stocks</h2>



<figure class="wp-block-image"><img src="https://lh5.googleusercontent.com/Uu4BjcM2jOHfjDKnR-EPLyYcKAQbvRrb6ANIaQmCvKkhjyR0UMyccJH7eaQt2bO3kRzrl6YApzyOfk76CblrosK4kEZlLGtsokjbbHN9iys2-VsiulaLDFOQUAudB0Yk2DPX-xTM=s1600" alt=""/></figure>



<p>As we discussed in our article on <a href="https://www.stakingrewards.com/journal/retire-on-passive-income-with-staking/" target="_blank" rel="noreferrer noopener">Passive Income with Staking</a>, you can earn between 4.5%-7% on U.S. dividend stocks and 6%-10% on some UK dividend stocks. As we stated in that article, the risks you run are:</p>



<ol><li>your principal losing value and&nbsp;</li><li>the deception that a high dividend yield could come from a declining stock price and not from a higher payout.&nbsp;</li></ol>



<p>A higher dividend yield might not get you to whatever your income goal is if the reason the yield is 8% is that the stock dropped in value by 10%. It means your payout stays the same or even drops from the previous quarterly payout. Also, if you aren’t a citizen of these countries, you may not be eligible for an account that lets you buy these stocks.</p>



<h2>Buy to Let Properties</h2>



<figure class="wp-block-image"><img src="https://lh4.googleusercontent.com/yWa1aCSb4ecDoYcrWDXUHf92WWNhNkIxmdJN6aW4Az5ioxYpt7kcfut7ylQIkYuBtj0d_ROe3LmOEXOIyWU1MiGR4pDf75BMIKKpzvQPUbt28xjDYQOJIbv3kW_TvMUMPwBdwgS1=s1600" alt=""/></figure>



<p>Buying real estate to rent it out as an investment is a common traditional investment strategy. <a href="https://www.douglasallen.co.uk/landlord-guides/what-is-a-good-rental-yield/" target="_blank" rel="noreferrer noopener">Numerous companies</a> in this field say that a net yield of 5-8% is a successful investment.</p>



<p>The problem here, aside from the fact we can earn more with low risk in crypto is that real estate is expensive and illiquid. It costs a lot and takes lots of time to sell it if you are unhappy with your investment performance. You are often taking on debt to help finance this purchase. It’s not well-diversified as all your money is tied up in one expensive property at a time.</p>



<h2>Peer to Peer Lending</h2>



<figure class="wp-block-image"><img src="https://lh5.googleusercontent.com/99vLXkVwfYuIeLfbr2pX4pIDVc00Vnu-mIbFlN6pIAdHNlOgSU54aweyH63kNtoFfhAQpUWNR1x0DSKEiZcZ-LHw1sjZd82wIWScBVP0Bo5VRcaZMrQlY9VMFfm_gj14HXUmG6cL=s1600" alt=""/></figure>



<p><em>Picture from <a href="https://www.debt.org/credit/solutions/peer-lending/" target="_blank" rel="noreferrer noopener">Debt.org</a></em></p>



<p>This was my absolute favorite option before discovering cryptocurrency. You often get to choose who you want to lend to. You decide how much risk you want to take by lending to a C credit instead of an A credit or by lending individuals instead of lending to a business. And you have many platforms and risk profiles to choose from. The returns on individual loans are often over 10% too.</p>



<p>However, these loans have no collateral. Defaults can be common especially during difficult economic times. There are no decentralized lending options for p2p lending if done in fiat currencies like USD, EUR, or GBP. An American can’t lend EUR on Mintos and a German can’t lend USD on Prosper either. Both your principal and the potential interest you can earn are at risk. It does not take many defaults to bring your total portfolio return down into normal or sub-optimal territory.</p>



<h2>Staking with Cryptocurrency</h2>



<p>While staking is probably the lowest risk crypto investment, lending of some cryptos such as stablecoins offers lower risks too. Here are some other benefits staking offers:</p>



<ol><li>Anyone can ‘qualify’</li><li>Payments in crypto</li><li>Liquid all the time unless staking has a short lockup period</li><li>Can start small and easy to diversify amongst many cryptos</li></ol>



<p>Anyone from anywhere can qualify as long as they have crypto in a digital wallet. No residency is required like for stock dividends or p2p lending options.</p>



<p>Payments are in crypto which many believe to be a higher quality form of money than most, if not all, fiat currencies. And they are easily converted back into your home currency or another crypto of your choice if you prefer. Far fewer devaluation concerns than emerging market currencies.</p>



<p>Unless you must lock up your crypto for 30 days or 60 days, your entire investment is liquid all the time. You can unstake and sell for another crypto if you are unhappy with the performance, unlike with bank fixed accounts or real estate.</p>



<p>You can start small. No huge commitments like real estate or dividends. If you want to take 1000 EUR and spread 100 evenly over 10 different cryptos, then you can do that. That plus the liquidity features mean you can work to improve the performance of your underlying assets. And you can easily diversify. Try doing that with a piece of property.</p>


Why Traditional Finance Cannot Compete with Crypto


<p>Staking Rewards is proud to announce the release of the extensive Staking Rewards’ 2021 Staking Ecosystem Report which is available for download for free below. </p>



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<p>We are examining the Proof of Stake industry at large and providing a holistic view on the current State of Staking as well as challenges ahead.</p>



<p>The report features unique data from the Proof of Stake Industry, cutting-edge insights from industry thought leaders, analyzed staking habits from over 200 investors.</p>



<p> Enjoy some weekend reading on us!</p>



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<h2><strong>The Proof of Stake Industry Has Grown by 1,550% Over the Past Year&nbsp;</strong></h2>



<p>At the time of writing, the Proof of Stake (PoS) market cap is sitting at $326.775B, which is up from $21.117B just one year ago. An increase of 1,550%! Meanwhile, the overall crypto market is “only” up by 673% ($338B in October 2020, and $2,278B in October 2021). PoS has been the place to be in 2021 and will continue to be for the foreseeable. Below shows us the explosive growth over the past two years!</p>



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<p>And as expected, Proof of Stake is becoming the go-to consensus algorithm in the Web3 world for investors, retail and institutional, utilizing their digital assets via staking to create a passive income stream and to hedge against inflation. It is clear that builders are opting to go with PoS also for a whole suite of advantages. The PoS vs PoW dominance rate has more than doubled in the past two years and that is not even accounting for Ethereum. The proof is in the data and the FOMO is real👇👀</p>



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<p>While drafting this report, we simultaneously surveyed over 200+ Staking Rewards users to understand their habits, insights, and thoughts on the current state of the ecosystem. We questioned them on various topics and areas and the insights are fascinating! A must-read for any validator, investor, or Proof of Stake fanatic.&nbsp;</p>



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<h2><strong>Cutting Edge Insights</strong></h2>



<p>To add to this, we have asked the leaders of the industry to answer specific questions on specific topics throughout the report. See an example below on the kind of insights we have collated from some of the best minds in Proof of Stake.&nbsp;</p>



<p><em>Do you see staking yields competing with DeFi yields? What are the implications of this on network security? How to balance these?</em></p>



<p><strong><em>Felix Lutsch from Chorus One</em></strong>:</p>



<p><em>“I do not see a direct competition here. At the current stage, staking and DeFi attract somewhat different user profiles. I do believe that there will be more and more financial products that help bridge the two worlds and allow users flexibility in how they want to deploy their capital. Tokenizing staking positions appear to be a core building block for this to happen. It is likely that staking will be the backbone of a lot of decentralized finance products in the medium run. I’m excited about further innovation in the liquid staking realm. Examples include two token models where the rewards are separated from the principal or the superfluid staking model introduced by Osmosis (a Cosmos DEX), in which liquidity provider (LP) tokens involving the native OSMO tokens can be staked to generate staking rewards on top of LP rewards (as opposed to deploying a tokenized staking position in a pool).”</em></p>



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<h2><strong>The 2021 Staking Summit by Staking Rewards</strong></h2>



<p>To mark the report, we will also be hosting an online event on October 20th with some key speakers who participated in the report. To attend the free, online event, join us here at 2 pm Lisbon/UK time &#8211; <a href="https://www.crowdcast.io/e/stakingsummit2021">The 2021 Staking Summit by Staking Rewards</a>.</p>



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<h2><strong>About the Report</strong></h2>



<p>The 2021 Staking Ecosystem Report has been a work in progress for the past number of months by the Staking Rewards team and comes at a time when the Proof of Stake industry as a whole has been experiencing exponential growth. Retail and institutional investors alike have been flocking to the scene in an attempt to earn passive income with their digital assets as well as getting involved with various areas of the underlying protocols such as governance and validating.&nbsp;</p>



<p>In this report, we have collated the thoughts, insights, and opinions of 19 diverse Staking industry thought-leaders and over 200+ Staking Rewards’ users/digital asset investors to get an in-depth view on the world of Proof of Stake as it is and where it will be in the not too distant future. We explore 10 key Staking-related topics such as Validator Business, Regulation and Taxation, Industry Challenges, and invite you to dive deep into the mindsets of the leaders behind your favorite companies in the space!</p>



<p>We have interviewed representatives of the following entities and would like to give them a huge thanks from all at Staking Rewards for taking the time to participate and make this report a reality.</p>



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<p>The industry is very much emerging out of its Exploration phase and is well on the path to Realization. We are excited to see where the journey as a whole will take us but one thing is certain, Staking Rewards will be at the forefront of the industry, providing the highest quality of objective research and data on the whole ecosystem.</p>



<p>The report was sponsored by StaFi protocol who is unlocking the liquidity of staked assets on chains like Ethereum, Polkadot, and more.</p>


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Universal Basic Income: Is Circles a Viable Blockchain Solution?

Research

Applying “Rich Dad Poor Dad” Principles to Staking Cryptocurrencies

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Why Traditional Finance Cannot Compete with Crypto

2021 Staking Ecosystem Report