Everyone and their grandmother is looking for the next 1000x token to become a millionaire from a $100 investment, but the odds of that is less than winning on the actual lottery. Sure it’s possible to win big, but why risk everything in the process?
If you don’t want the high risk/high reward that most crypto tokens offer, there are other ways to earn money using crypto tokens. One of the more popular ways, even though slower than traditional spot-trading, is through Staking a.k.a SimpleEarn.
Staking and earning are both used interchangeably throughout this article as are coin and token. Binance terminology uses SimpleEarn, SOL/ETF Staking, AlphaEarn, Subscribe and Redeem.
Staking is almost like the reverse of a traditional bank loan. Instead of you taking out a loan from the bank and paying mortgage fees to the bank, it is you who lend your money to the bank and they pay you interest for doing so. That’s the general idea in a nutshell.
Staking tokens means that you are the validator and your staked tokens help validate transactions and secure the blockchain network. You earn rewards from the network (or DEX i.e Binance) for using your tokens while taking a small mitigated risk for doing so.
Binance offers solid staking programs like SimpleEarn with fixed or flexible APR% (Annual Percentage Rate), so you can choose whatever suits your needs the best.
Just recently, they also opened up the AlphaEarn -hub for its users, which lets you provide liquidity for the Alpha -token liquidity pools and earns you annual interest as well as AlphaPoints (see AlphaEvents for more details) which can boost token allocation and also be converted into Airdrops.
AlphaEarn and SimpleEarn are two separate Binance programs, make sure to familiarize yourself with them before investing.
Sure, it’s not exciting to gain a cumulative earning of e.g 0.3% or even 1% next to your tokens but there are pros and cons to everything. Staking tokens takes away (most) stress and panic that often occurs during peak trading moments in fast moving markets (if you ever limit sold Bitcoin on 1 minute timeframe, you know the pain) so now you can finally set aside your computer or phone and head outside to play with your kids or your dog instead.
Staked tokens are still susceptible to the natural flow of the market and the residing blockchain. Market shifts and security flaws are always present.
For instance $BTC usually has a 0.25% flexible APR on Binance and sure, if you have Bitcoins and plan to HODL (hold) them for a long time, then 0.25% is not bad, and since you are not selling them yet, you have more to gain than what you would lose, especially if the market is stuck between support and resistance.
It is a sound advice to keep an eye on your investments with regular intervals to prevent sudden loss of assets. Remember to set notifications for your staked token thresholds - just in case.
Here are 10 tips to get you started with the not so exciting, but often profitable, way of earning money in your sleep:
1) Staking flexible APR. You may be in luck and find a 30% APR on a token but do be beware that this APR can (and will) fluctuate up and down regularly, even after you Subscribe your token when it was at 30%. Hence the term flexible.
2) Staking fixed APR effectively ‘locks’ your tokens for the agreed upon time e.g 30-days. Sometimes redeeming your tokens before the end of the term may reset your accrued earnings, so be sure to read the agreement and be aware of it, before you Redeem them.
3) Often overlooked is the fact that most staking actually ‘locks’ your tokens into the pool, and that also means that you cannot set a STOP-LOSS/LIMIT-order, or SELL/CONVERT, while your tokens are staked. In order to sell your tokens you need to Un-stake/Redeem them first.
Note: When entering staking on SimpleEarn, your assets will no longer be visible in your spot-wallet but instead appear visible under the ‘Earn’- tab.
4) Look at volatility and trading volumes, because you don’t really want tokens with high volatility and fast movements, you want tokens that are slow and have a steady growth without large flux.
5) If you stake in AlphaEarn remember that ALL Alpha stakes have higher volatility than older established tokens. Also be aware that malicious actors are more prominent around brand new tokens. Be aware of
6) Decentralized Financing (DeFi) is popular when staking because of their assumed reliability and pool of real-world investors who provide backing. There are no guarantees, just increased reliability. Many DeFi’s also offer in-house staking, so please make sure that you are 100% sure that you are looking at the official website before proceeding.
7) Even though staking is a more reliable way of earning money, there is ALWAYS risk involved. Do your own research before investing and plan in advance for potential market dips. In contrast to spot-trading, staking can cause significant loss of profit if you panic, so please do remember that you are investing for the future; not for today.
8) There are many tools like “Staking Rewards Calculators” online but be careful of scams and malicious software. If you stick with Binance they offer a relatively easy UI (User Interface) and decent explanation for planned earnings, so make the most of it.
9) In order to increase liquidity pools for some tokens, Binance will often promote campaigns for limited times on random tokens like
$BNB ,
$SOL or
$LAYER etc. so keep an eye out for them as they can be quite lucrative and significantly increase your earnings. Some offers include staking $X and you earn $Y as a reward. Definitely worth checking out.
10) You can activate ‘automatic staking’ from your spot-wallet. Enabling this option is really useful, especially if you are staking
$BNB as it transfers your tokens daily without any additional settings, into your already staked coins. Combine this with the option to turn ‘dust*’ into
$BNB and you have a great setup for earning more money.
* ‘Dust’ is what Binance calls tokens that are left after trade conversions with a value <$1 and if you have Binance PRO enabled, you can from your spot-wallet convert all the ‘dust’ into
$BNB tokens in one go rather than having to click and convert each one manually.
Best wishes for your future staking journey and remember the story about THE RABBIT & THE TURTLE when things get tough.
(As always, this is not financial advice, just me sharing insights. Invest on your own accord, do your own research and stay smart).
#Write2Earn #Earning #Staking #AlphaEarnHub