POS earnings

[Henrytrust]

There's no doubt that some of the reward in Defi tokens come from the POS algorithm which is effective in these tokens, but I still have a feeling that in some instance some of these Defi projects include ponzi scheme into their rewards to give investors high rewards and after a while, they pack up.

[Fredomago]

They are doing pretty good. It is like an underdog altcoin which isn't being talked about. But just look to its volume and ranking.
It's been staying there stably. This is like a balancer of someone's portfolio but still, all depends to the understanding and preference of the holder.

You are right indeed. The coin is quietly moving and those who are staking this coin are getting good amount of rewards.

Very nice for passive profits, If you have spare money and you are looking for staking coins
then this project is one of good option, but never to forget doing your DYOR as always.

[tabas]

They are doing pretty good. It is like an underdog altcoin which isn't being talked about. But just look to its volume and ranking.
It's been staying there stably. This is like a balancer of someone's portfolio but still, all depends to the understanding and preference of the holder.

You are right indeed. The coin is quietly moving and those who are staking this coin are getting good amount of rewards.

Very nice for passive profits, If you have spare money and you are looking for staking coins
then this project is one of good option, but never to forget doing your DYOR as always.

A decent passive income for those who also like holding a good altcoin. This isn't a financial advise but they have to create their own research for this coin before investing.
Tezos is just silently growing and I can't deny that I might buy a huge portion of it soon when I've have spare.

[mnporter2001]

i've been doing a lot of reading about DeFi's lately, but i can't seem to wrap my head around rewards and where do they come from? at first i thought that rewards are given just like in proof of work coins, like btc so basically, if one stake a coin, he'll be getting rewards for helping the network, meaning from the blockrewards and transactions fees.

but i then came across some new coins like Swipe, which i'm confident that it does not generate that much in transaction fees, and yet the rewards are high? the coins in question are: Tezos, matic network, cosmos, swipe and ethereum 2.0.

i would appreciate any explanation. thank you

I know having a lot of altcoins with a committed PoS reward of about 30-40% / year is very common. with Tezos on the list having the most modest profit margin, that's about 6%. The smaller the altcoins, the more profitable they are because they are not too confident in the coin they are developing. This means that they only pay you with the same coin that you participate in PoS, not USDT. Therefore, when the price falls sharply, they will not be responsible for you. To be honest, I think everyone should do PoS with the top coins, the risk will be lower but the returns will also be safer.

[Bossfidelity]

Before now we had only the Proof of work algorithm, which is still utilized in several blockchain including bitcoin, until recently when the proof of stake algorithm became mainstream which has been the selling point for Defi projects. The proof of stake gives holders of the coin who stake or lock up an amount of the token rewards for the time the tokens are being locked. On the other hand, proof of work gives rewards to miners.

[leea-1334]

Easy.

You are lending money. And earning interest. That is the basic Defi,,, you put money as capital, people borrow and pay back interest.

OR you put your money to be part of liquidity so people can always swap at any time. That is majorly where the staking comes in.

This is nothing to do with Proof of Stake.

[Insanerman]

Let me explain in simple terms. When it comes to rewards, POS is like POW but you just need to hold your coins in a wallet that can stake. In general, the rewards doesn't necessarily comes from transaction fees alone, rewards can also include new coins that is mined from staking and is added to the circulating supply. Though reward distribution method varies from different projects.

so aside from transaction fees and rewards from newly mined blocks, are there any other methods to generate these earnings? and do you happen to know what are the methods used in the projects i mentioned in my original post please?

Some projects do open investments, like ICO, where there are a lot of discount once you bought a certain coin before its official release. Hence, that is the best option/reason why other coins/tokens can give huge amount of rewards to its system's / token users. They can also have their own trading platform like Binance, which made their own token/crypto named BNB (Binance Coin). Hence, most project either DeFi or an ERC-20 project always starts with investment programs and stuffs to help the project make huge reward afterwards.

[hrunya102]

The interest are often very high, and to write in the smart contract high POS reward is not difficult, the main thing that the price of the token in the end dont fell to the bottom, in my opinion it all rests on peple faith.

[wheelz1200]

PoS and PoW are the old consensus types, now there are lots of new consensus, such as DPoPS, DPoW and others,
and PoS is a consensus made to solve the problem of PoW which consumes large electricity consumption,
with PoS you don't need electricity and big costs, because only holding a certain number of coins you will be rewarded with these coins, the amount of prizes depends on how much ROI applies, because every coin that uses PoS consensus has a different ROI ..

You can also say that PoS creates very centralized holdings as well which is a massive problem.  The rich get richer meaning he who owns the most coins will get most of the rewards and be an even larger holder.  I still think PoW is still fine by design.  Sure other consensus exists but to say one solved the others problem while not seeing the flaws in that same system is a flawed way to look at things.

[bitmover]

is it safe to assume that any coin listed on stakingrewards with a transaction fees slider is not generating rewards from nowhere?

XTZ (with): https://www.stakingrewards.com/earn/tezos/calculate
Polkadot (without: https://www.stakingrewards.com/earn/polkadot/calculate

No, i dont think it is safe to say that.

You would need to check how those coins were firstly originated. How well decentralized really is the network
For example, do they have a master node like iota?

A master node may seems not a big deal to you, but read what the coordinator did to iota.

https://bitcointalk.org/index.php?topic=5227016.0

[fuer44]

but i then came across some new coins like Swipe, which i'm confident that it does not generate that much in transaction fees, and yet the rewards are high?

Let me explain in simple terms. When it comes to rewards, POS is like POW but you just need to hold your coins in a wallet that can stake. In general, the rewards doesn't necessarily comes from transaction fees alone, rewards can also include new coins that is mined from staking and is added to the circulating supply. Though reward distribution method varies from different projects.

yes, in what context was this discussion. if what is discussed is the reward mechanism, then POS with POW is actually the same. it's just that, where does the reward come from, it varies. After all, now a lot is coming from the exchange because the project is making an exchange. so to promote their token as well as their exchange, the reward comes from the exchange.

[SquallLeonhart]

Rewards for stake is a bit different than rewards for mining, in mining the people who have the equipment are the people who get the most rewards, doesn't mean you have to be the richest, you could just manufacture those equipment yourself and mine it yourself and get the rewards, whereas in staking you have to be the richest to make the most money, the person with the most coin will make the most stake, which means you can't really sell too much, if you want you can sell the coins you stake but that's it, if you want to keep staking same amount you have to make sure you increase with the system as well.

This is the big difference because miners could sell all they mine and as long as they have the equipment they will still mine great, but staking requires you to keep the coins, which is great for keeping the price higher.

[wheelz1200]

Rewards for stake is a bit different than rewards for mining, in mining the people who have the equipment are the people who get the most rewards, doesn't mean you have to be the richest, you could just manufacture those equipment yourself and mine it yourself and get the rewards, whereas in staking you have to be the richest to make the most money, the person with the most coin will make the most stake, which means you can't really sell too much, if you want you can sell the coins you stake but that's it, if you want to keep staking same amount you have to make sure you increase with the system as well.

This is the big difference because miners could sell all they mine and as long as they have the equipment they will still mine great, but staking requires you to keep the coins, which is great for keeping the price higher.

To be honest thats exactly what makes PoS sound like a ponzi.  Well maybe not in the traditional sense but you get rewarded basically for saving and penalized for using.  The whole point is to have crypto usable as a method of payment.  The PoS consensus discourages using crypto for anything but getting more and stashing it

[barbara44]

You talked about defi projects first, then you have a topic name about POS earnings and now you are asking about how tezos, eth 2.0 (which is not even out?) which are POS make that money to give to people. POS and defi are totally different things, they are not even remotely close to each other, defi is something totally different whereas POS is just proof of stake coins.

Proof of stake coins do not need transaction fee's to pay to people, they are giving them rewards for staking, which means they are dividing all the money to people who stake. Let's assume there is 100 eth to be mined per 5 minutes, and there is 100 million dollars worth eth staking at that moment, each 1 million staking will get 1 eth, that's it. This is money that is created from zero, just like miners, these are stakers, gets freshly owned eth for staking.