Bitcoin Forum

There is currently a time when most crypto projects run on auto staking and auto compounding systems. Where the temptation to invest in a very attractive profit in a year is being shown.
What is the future of these projects?
And how reasonable is the investment?

• The future of any project depends on the use case of the project, how relevant it is and how well executed it can be done. Many of the projects being launches in the crypto sphere, fail on all fronts and their only focus is on marketing and profits for the "team".

• I personally do not buy the idea of staking your supply of a coin or token to get more over a fixed time period as there's a disproportion in supply, with those with higher stashes getting more than those with lower and also diluting the total supply which can affect the market value.
Some people stake simply cause they noticed they can gain xxx amount over a period of time, without researching on the actual product they are buying into.

The future in the vast majority of cases is a great loss for whoever invests in them. As a picture is worth a thousand words, let's look at an example from another thread:


Auto staking and auto compounding to lose 95% of your investment does not sound very smart. In some cases you may hit the lottery and in addition to the staking and compounding gains, the shitcoin will have risen a lot and you will be able to sell with a lot of profit but this does not make the strategy an optimal way of investing.

One thing that I notice to these kind of project is that its value will just keep dumping. The quantity of tokens you have may grow but its the value that keeps declining. This is where you find it not comfortable because it takes several months to a year before going up again.

Perhaps its not very true to some projects but I have experienced it several times  already that I'm staking coins. What you may have to do plan for the perfect timing. When you see that there us a bull market, you just wait until the ATH price and then buy back the tokens when its bottom and then stake it. Sell again upon reaching its new ATH.

As mentioned above, a lot of stake able coins are destined to lose their value (imo the safest are the ones that have been around for a while or that have a reasonable use case).

I think staking coins like dash are probably safe enough and lending out coins like usdc/dai (staking defi coins like compound and aave too if they're stakeable).

I don't like the look of ethereum staking though (and a few others) where they have fixed windows for staking and jnstaking (I could imagine the coin dumping quite hard).

It depends on individual project but know that many new projects are doomed to fail. And if a project later fails like becoming a shit coin, then its staking is worthless. Assuming you stake an altcoin, you earn certain amoun of profit that is calculated based on the percentage of the total amount you staked, if the profit earned from the stake is not up to the amount of money lost in the value of the coin as its price decrease, definitely that is a loss. Altcoins are risky. But if the coin increase in value or if the coin is a stable coin that its price assumes the price of fiat, you can make profit from staking. But there are altcoins that are staked and the value of the coin in price decreased which make staking not to be profitable.

Unfortunately, I don't believe in this segment due to the low rate of adhesion and market strength. In the vast majority it starts at the top and over time it goes towards decline. In addition to the market and its influences we must analyze the team with its development and in this case we can consider the heart of the issue. Creating a project and waiting for investors and supporters is sure to fail and we find this in large quantities this segment. Therefore, we do not see much desire on the part of development, but interest motivated by a rise in the past.

If such programs are using popular cryptos like Bitcoins or ETH or Solana etc. For auto staking and compounding, I would call them a ponzi.

If such programs are using their own token, I would still call them a ponzi because their tokens need to have some utility in order to generate value. Without a proper utility, the program is just bound to fail and probably some investors will loose their savings with them.