The summer of 2020 will undoubtedly be regarded as a landmark year for the whole decentralized finance (DeFi) space. DeFi didn’t stop creating new and exciting opportunities in borrowing and lending; it went a step further in changing the staking business.
Staking on DeFi is simply but widely known as yield farming or liquidity mining, and it carries lots of opportunities for all involved. For one, staking software draws from centralized finance (CeFi) a little. This is in terms of making it possible for users to accrue interest in cryptocurrency holding.
With the help of smart contracts, DeFi software can manage both the staking and distribution of prizes and rewards. Perhaps one of the biggest perks of staking platforms is the opportunity for a win-win scenario for both the protocol operators and the holders of DeFi tokens.
There’s a lot to be gained in jumping on the DeFi and staking platform bandwagon early on. So if you’re keen to begin your journey in 2021, here’s how to choose a staking platform this year. But first, let’s find out how a staking platform operates.
How Does a Staking Platform work?
Staking on dedicated platforms involves a user holding or locking their funds in a crypto wallet. They do this to partake in maintaining the operations of the platform’s proof-of-stake blockchain system. To an extent, staking is similar to mining cryptocurrency because both rewards participating users while helping networks achieve consensus.
One of the reasons staking is becoming increasingly popular is that it enables cryptocurrency holders to accrue higher APY. So with staking, you can earn more APY than market funds or traditional savings accounts.
In addition to this, platforms like YeFi.one offer users security, scalability, cross-chain compatibility, and good staking returns. What’s more, the opportunity to earn cool passive income is too good to pass on. The yields that you get from staking on YeFi can be as attractive as it is outrageous.
Staking platforms are perfect for people who have low risk-aversion and a high-risk appetite. Besides, with more and more DeFi exchanges offering staking services, staking is becoming more accessible, cost, and energy-efficient.
Here’s How You Can Choose a Staking Platform in 2021
With just a few clicks, you can begin staking your funds and earn passive income. However, you first need to figure out what platform to go with so that you’ll maximize your yields as much as possible. Here’s what you should be looking out for when deciding on which staking platform to choose in 2021:
#1. Look Further Than Annualized Rewards
Getting too caught up in annual percentage yields or annualized rewards and ignoring other vital factors is one way to choose the wrong staking platform. It is essential to choose the platform that benefits you. However, there are other factors you can consider, like its reputation in the crypto world and how long they’ve been in operation.
#2. Read the Platform’s Terms and Conditions
Another tip for choosing the best staking platform in 2021 is to read the platform’s terms and conditions carefully. Also, make sure to go through the rules that govern a particular platform’s staking process.
By reading the rules, you’ll learn about issues concerning wallets being connected daily to the internet like some platforms require and minimum staking amount required. There’s also the matter of cooling periods before unstaking your cryptocurrency. Users will find all of these and more in the rules governing the staking process for a DeFi staking platform.
#3. Use Twitter and Reddit for a Popular Opinion on Any Protocol
This tip is essential if you’re a non-tech person or a newbie to the whole DeFi and staking space. Reddit and Twitter have a large community of staking enthusiasts who will drop opinions and alerts when they discover signs of code vulnerability or any type of foul play. Besides, if you need a raving review, Twitter and Reddit will give you the truth instead of the words of a founder trying to sell.
#4. Go for Reputable DeFi Staking Platforms
Whatever choice you make, reputable, tested, and trusted platforms like YeFi.one should be at the top of your shortlist for staking platforms. There’s always the temptation to go for platforms that offer outrageous staking yields, but more often than not, they’re fraudulent or untrustworthy. So instead of risking your funds, go for reputable staking platforms.
#5. Use Dependable Analytics
Always use accurate and dependable analytics for information on all things proof-of-stake. In addition, stick to reliability when choosing third-party staking services and proof-of-stake or PoS-based DeFi platforms. Doing so will help you avoid scammers.
#6. Conduct Your Thorough Research
When it comes to choosing the right platform to stake at, down to the coin to stake, you may have to rely on both statistics or numbers and your gut. You can start getting success by picking a project that is not only reliable but also resonates with you and your expectations. It should be a project or protocol that will be around in years to come.
Benefits of Crypto Staking over Proof of Work
If you’re still undecided on the benefits of crypto staking on a platform like Yefi.one, here are several ways you can benefit from crypto staking over proof of work blockchains:
- Proof of stake or staking is an excellent means of earning much-needed passive income quickly. You can do this and still keep control of your wealth of digital assets.
- There is no need for robust and expensive pieces of equipment like mining rigs in proof-of-work systems.
- Proof-of-stake protocols make scalability much easier via lower fees and high transaction turnout in less time.
- In terms of environmental effects, you will find that PoS chains consume less energy than PoW chains. Proof-of-stake is more environmentally friendly, and its carbon footprint is much smaller, with little or no impact on our environment. It is essential since more crypto platforms are getting serious about going green.
- There are low barriers to entry in PoS systems compared to PoW and its expensive and energy-consuming mining. Stakers are also saved from too many technical parts of the process when they use staking-as-a-service platforms.
- Proof-of-stake is more cost-effective and a lot cheaper to operate or join than PoW. You don’t need to buy expensive equipment.
- Experts applaud proof-of-stake systems for being more decentralized and secured than proof-of-work protocols.
DeFi staking platforms are on the rise in crypto space. The proof-of-stake offers more to users in terms of decentralization, security, and higher returns. What’s more, users get all these and more with no barriers to entry or need for expensive pieces of equipment. With a click of a button, DeFi staking platforms like YeFi.one can bring you up to speed with the fantastic and profitable world of staking.