How to Earn While Holding Crypto Assets

[Wenbing]

I have been trying to research ways to earn while holding a crypto asset portfolio.

The results i found include; Yield farming and staking.

1. I want the house to throw light on how this works.

2. What are the factors to consider when choosing yield farming platforms?

3. How profitable is yield Farming and staking? Does it really worth it?

[mk4]

When talking about "staking" bitcoin through platforms like BlockFi: take note that you're handing over custody over your funds. If the platform gets in trouble security wise, then you're in for a rough ride[1].

When talking about yield farming and staking with DeFi: You have the risks of impermanent loss[1], and you also could potentially lose your money if the platform gets exploited.

[1] https://cryptosec.info/exchange-hacks
[2] https://medium.com/coinmonks/understanding-impermanent-loss-9ac6795e5baa

[BlackHatCoiner]

And to expand the following further:

When talking about "staking" bitcoin through platforms like BlockFi: take note that you're handing over custody over your funds.

You hand over custody of your funds for a long time. For instance, if you agree on earning an extra 4% of your coins each year, they have to remain on the platform for one whole year. You may wish to withdraw them, but the agreement of the yielding applies if you do what you've agreed.  (I'm not sure if you can actually get them back after you deposit them unless you wait for the required time)


If you want to stake, which means to earn money from owing money, I'd recommend you to look on Cardano. It's a PoS (Proof-of-Stake) cryptocurrency which means you can earn from the staking pools by just providing a proof of the funds' ownership. From what I've seen, most of the pools will require from you to stake at least 300 ADA.

Unpopular opinion: Buying Bitcoin and just holding it is more than fine.

[Wenbing]

When talking about "staking" bitcoin through platforms like BlockFi: take note that you're handing over custody over your funds. If the platform gets in trouble security wise, then you're in for a rough ride[1].

When talking about yield farming and staking with DeFi: You have the risks of impermanent loss[1], and you also could potentially lose your money if the platform gets exploited.

[1] https://cryptosec.info/exchange-hacks
[2] https://medium.com/coinmonks/understanding-impermanent-loss-9ac6795e5baa

Regarding impermanent loss is loss due to the volatility or fluctuation of the market. What I have come to understand is that volatility can also be a positive thing as the price of the crypto asset could rise in his favour.

While we have an impermanent loss, we also have impermanent gains...

[cr1776]

And to expand the following further:

When talking about "staking" bitcoin through platforms like BlockFi: take note that you're handing over custody over your funds.

You hand over custody of your funds for a long time. For instance, if you agree on earning an extra 4% of your coins each year, they have to remain on the platform for one whole year. You may wish to withdraw them, but the agreement of the yielding applies if you do what you've agreed.  (I'm not sure if you can actually get them back after you deposit them unless you wait for the required time)


If you want to stake, which means to earn money from owing money, I'd recommend you to look on Cardano. It's a PoS (Proof-of-Stake) cryptocurrency which means you can earn from the staking pools by just providing a proof of the funds' ownership. From what I've seen, most of the pools will require from you to stake at least 300 ADA.

Unpopular opinion: Buying Bitcoin and just holding it is more than fine.

Personal, buying (or mining) bitcoin and holding has been a good strategy as long as you can keep from panicking and your timeframe isn't just a few days or weeks.

If any of the platforms was insured or could be trusted to have full collateral for the assets, that might change the calculations, but for 2% or 4% the risk/reward is not there.

[so98nn]

When talking about "staking" bitcoin through platforms like BlockFi: take note that you're handing over custody over your funds. If the platform gets in trouble security wise, then you're in for a rough ride[1].

When talking about yield farming and staking with DeFi: You have the risks of impermanent loss[1], and you also could potentially lose your money if the platform gets exploited.

[1] https://cryptosec.info/exchange-hacks
[2] https://medium.com/coinmonks/understanding-impermanent-loss-9ac6795e5baa

Thats really fearful then! I was studying the staking (with poor success) and was thinking to invest into it. I was roaming through platforms like BNB where they have given multiple options to book the slots and stake the crypto with different APY values. However, I never understood how they gonna give me that fixed % of interest if crypto is going up and down like crazy all the time. I think it's getting difficult these days to stake my money and I would think a lot after reading your security concern about the staking. These are obviously true consequences that can happen and we have also experienced the mega hacks in the past. In that case how they will understand whose money was lost and do they take the responsibility of lost funds? There seems no regulations or compensation rules about it. So yeah staking is also getting poor way of earning the money. Gone the days when it was safe or profitable I guess?

[haasanjui]

You can earn through trade your holded Crypto assets. It is best way to earn money because you hold Crypto asset and all Crypto Market's price is unpredictable so if any asset price pumped you can earn money.

[The Cryptovator]

First of all, that's not true that you can earn crypto once you are holding it. Holding mean assets in your custody like on your noncustodial wallet. If you want to earn then you must hand over it to a third party. For example, if you want to earn then you should invest. Either on yield farming or staking. If you stake in Binance then the fund will be controlled by them. So choosing the best platform for that is quite important. I am not a fan of that kind of investment nor I am much familiar with it. Everywhere is a risk once you decide to invest. So you should research more about how could you earn safely with less risk.

[Sterbens]

When talking about "staking" bitcoin through platforms like BlockFi: take note that you're handing over custody over your funds. If the platform gets in trouble security wise, then you're in for a rough ride[1].

When talking about yield farming and staking with DeFi: You have the risks of impermanent loss[1], and you also could potentially lose your money if the platform gets exploited.

[1] https://cryptosec.info/exchange-hacks
[2] https://medium.com/coinmonks/understanding-impermanent-loss-9ac6795e5baa

We will never do that if it has given up our rights to a second party just for the sake of staking Bitcoin. I better keep it until it's bad. It's terrible that anything can happen, targeting Bitcoin with an alibi like this is often found. And the holders must think about this carefully. In my opinion Bitcoin is not to be gambled, As for other altcoins I will not forbid it.

[joniboini]

Thats really fearful then! I was studying the staking (with poor success) and was thinking to invest into it. I was roaming through platforms like BNB where they have given multiple options to book the slots and stake the crypto with different APY values. However, I never understood how they gonna give me that fixed % of interest if crypto is going up and down like crazy all the time. I think it's getting difficult these days to stake my money and I would think a lot after reading your security concern about the staking. These are obviously true consequences that can happen and we have also experienced the mega hacks in the past. In that case how they will understand whose money was lost and do they take the responsibility of lost funds? There seems no regulations or compensation rules about it. So yeah staking is also getting poor way of earning the money. Gone the days when it was safe or profitable I guess?

Well there's no way to avoid the risk. You can also "stake" some coins by running a node instead of locking your coins on a smart contract like BNB/Pancake etc. With time it might mature but you should never expect the platform to be completely secure when the APY is high. If volatility is a problem to you then you can also stake or provide liquidity for stable coins on platform like DYDX for example. There was never a "safe day" in staking/lending platforms, you're looking at the wrong place. If you're that afraid then just stake and unstake regularly, but you'll need a lot of money if you want to make some decent profits by staking for a week or so.

[dansus021]

i would prefer do staking but still monitoring your balance with portofolio tracking like farmfol.io or yieldwatch or you choose binance earn or other platfrom like trustwallet offer, yield farming is delicious give you juicy APR but as far i know that farming also give you impermanent loss so is not pure hodling and i been try it till date  yield farming using two stable coin is also choice  but mostly stable farming is low ApR

[mk4]

Regarding impermanent loss is loss due to the volatility or fluctuation of the market. What I have come to understand is that volatility can also be a positive thing as the price of the crypto asset could rise in his favour.

While we have an impermanent loss, we also have impermanent gains...

Sure. Like how you can win big when betting on certain small caps, but at the same time you could lose big. Completely up to you if you're willing to take the risk.

[enhu]

Sending BTC and ETH to blockfi or Celsius kind of platform is not holding but giving your coins to them. Holding means you have the private key of the coins you have. It's very risky to go into these CEFI platforms because SEC has not dealt with them yet. If all of a sudden SEC sees them as an economic threat, they will seize the coins of these borrow and lending platforms including yours.

Staking is much more like the HOLDING type while you earn. There are many tokens to choose from for this like ETH and DOT. There could be cheaper like ADA so you checkmore.

[syedakhlaque]

You can earn money through both sources stalking and trading etc. It depends upon your choice what you like the most. people in the market earned good money through stalking different coins like cake, bake juld,Julb, etc. But if you have already invested your capital in stalking, farming. Then you should manage extra money to invest for trading or other earning sources. BTC is also expected good for stalking for the next 3 or 4 months.

[Assface16678]

By holding, it doesn't mean you are profiting unless the value that you bought it is lower than the price it is now. In order to earn, you must invest this Assets that you hold or try buy and sell. Also if you can make funds for extra money try to look for other coins that may have a potential growth and invest in it. A good research can make a big impact in your earnings.

[Kong Hey Pakboy]

Staking is better in my opinion, to be honest doing also a job while hodling is helpful too because it can help you with your daily expenses while at the same time not being able to use what you're hodling.

[michellee]

If you are okay with staking in the exchanges, then Binance can fit what you need because, in Binance, you can stake so many coins, including bitcoin and usdt, to earn some rewards. But as the reward is not too big to depend on your initial funds, you need to wait for some time to earn decent money, but that is still worth doing while waiting for the market to recover. If you do not want to stake at the exchange because you are afraid they can scam you, you can use a wallet that supports staking such as Atom, Trust wallet, Cro wallet, and others.

[bittraffic]

If you are okay with staking in the exchanges, then Binance can fit what you need because, in Binance, you can stake so many coins, including bitcoin and usdt, to earn some rewards. But as the reward is not too big to depend on your initial funds, you need to wait for some time to earn decent money, but that is still worth doing while waiting for the market to recover. If you do not want to stake at the exchange because you are afraid they can scam you, you can use a wallet that supports staking such as Atom, Trust wallet, Cro wallet, and others.

It's very risky to stake on exchanges though. The advantage is really good but the risk of losing your coins outweighs these advantages particularly to the thread that exchanges can be hacked. And also there was news lately in which authorities are trying to locate the servers of binance, it's funny how they come up with such fud but I wouldn't disbelieve this kind of threat knowing they are desperate to sue binance in every country.

Staking in a private wallet feels safer especially if you have the right tokens to stake such as ETH, DOT and ADA.

[Reid]

Holding crypto assets doesn't really give you profits unless you surrender the assets you bought from its cheaper price.
Remember, when you sell 1 Bitcoin you lose 1 Bitcoin. Just think about it thoroughly.
1 BTC $800 buy price, same 1 BTC sold for $43000. - At this moment you have $ and will think of a way for re-entry.
If you want to create profits you will be going thru trade so that you could buy back the asset that you sold after a pump.

Staking is kind of a doubtful place for me because of the custody that was gone. If I will stake something I'd rather use cheap altcoins.

[FrancesF]

You can consider holding a currency that can be pledged for mining, and you can also earn money while holding it!