BTC/USD price chart Source: TradingView
Before this, Bitcoin had been on a remarkable bull run. The cryptocurrency saw roughly 350% in gains from the $13000 it was worth in November 2020 to its peak in April 2021. Before starting to invest in crypto, no matter if it is staking or not, you need to understand the risk of volatility. 2. Staking rewards risk
The rates of return on staking rewards are not always guaranteed and may even change over time. Also, there is a risk that the rewards will not be paid (even though it is supposed to be paid). Always check to see if your rewards have been paid or not.
Some staking assets don't pay out staking rewards daily. As a result, stakers have to wait to receive their rewards. To mitigate the negative effects of long reward durations on your overall crypto investment returns, investors can choose to stake assets that pay daily staking rewards. 3. Liquidity Risk
Altcoins that have extremely low liquidity on exchanges may have problems with selling or converting staking returns into bitcoin or stablecoins.
4. Lockup Periods
Most projects require a minimum holding of their coin to be eligible to receive a staking reward. Some assets come with locked periods during which you cannot access your staked assets. If the price of your staked asset drops substantially and you cannot unstake it, that will affect your overall returns. 5. Project failure
Before you stake a coin, please, investigate the project you are investing in. Do not consider only the projects that pay the highest staking rewards. Instead, select projects that have real fundamentals and technology as well as a good community supporting them. 6. Counterparty risk
Since you may be staking through an exchange or wallet, there is also counterparty risk to consider. If for some reason the platform (e.g. wallet or exchange) you are staking through goes out of business and delists all the coins, you will most likely lose all the staked coins held on that platform. Choose a reliable and well-known counterparty. 7. Exposure risk
If all your investments are in one asset, then all your eggs are in one basket – one disaster might destroy everything. To minimize exposure risk, choose a diversification strategy.
Staking is an attractive and relatively low-risk way to generate a passive income on your crypto assets. But more than that, it is a way of actively participating and providing value to a decentralized network.
Crypto investors need to choose carefully the assets they decide to stake and not to choose their staking asset purely based on APY figures.
The holders of the Franklin (FLy) token, the native token of VRM and the Black Ocean ecosystem, also have access to staking as a new type of digital bonds. Black Ocean Liquidity Mining platform offers FLy token holders sustainable projects with high APY. Users can use FLy tokens for staking
or to provide FLy trading pairs on Uniswap with liquidity to earn more FLy
or other promoted tokens.
Liquidity providers generate revenue from trading fees charged and reward pools, which are provided by connected projects. Average annual staking rewards for the FLy token staking program
depends on the amount and locking period – there are 1, 3 and 6-month duration programs.
You can receive more FLy tokens by following the links below: Staking (press here) Liquidity mining (press here)
This article is for informational purposes only, it should not be considered Financial or Legal Advice. Cryptocurrency trading is subject to high market risk. Please make your trades cautiously.
Thanks for your support!
VRM and Black Ocean team