Staking is making a comeback in the middle of the crypto winter. An investor explains how to start making passive income with just $100 and shares 3 altcoin projects he believes will reward users. Staking, the act of locking crypto to earn rewards, is experiencing a comeback in the middle of the crypto winter. Josh Greenwald, head of risk at crypto brokerage Uphold, reveals the firm’s new staking product. Details are on Kriptokoin.com.
Winning strategies and promising altcoin projects
Stakes (the act of “locking” your crypto assets to help validate transactions on the proof-of-stake blockchain in exchange for rewards in the form of tokens), making a comeback in the cold climate of a crypto winter. Faced with high inflation, rising interest rates and rising geopolitical tensions, global markets took a dip. On Wednesday, the S&P 500 plunged even deeper into the correction zone after falling more than 10% from its January high. According to Arcane Research, cryptocurrencies have been trading alongside stocks as Bitcoin’s 90-day correlation with the S&P 500 hit the highest level seen since October 2020. The token is down almost 15% last week, trading at $37,600 on Wednesday afternoon, compared to its peak of around $69,000 in November.
The stress of a crypto winter, where prices have been under pressure for an extended period of time after the initial spike, has escalated further. The global crypto value stood at $1.71 trillion on Wednesday. Against such a backdrop, investors are looking for ways to generate stable returns in crypto rather than keeping their eyes on the screens for profitable trading opportunities that are more difficult to come by in a bearish market environment. With the rise of proof-of-stake blockchains, including popular altcoin projects Solana, Polkadot, and Cardano, the staking market has grown significantly over the past year.
How to get passive income in crypto with $100?
As crypto investors seek to protect fixed passive income through staking, businesses are trying to get a piece of what JPMorgan predicts as a $40 billion business opportunity for the crypto economy by 2025. Uphold, a crypto brokerage serving over seven million clients, has recently launched a staking product where users can stake assets such as popular altcoin projects Ethereum, Polkadot, and Solana, earning up to 10.5% annual returns. The brokerage platform, which manages around $3 billion in client assets, allows users to start staking with as little as $100 and requires no minimum staking time. This means that investors can deposit and withdraw tokens without waiting weeks, and sometimes years, to collect rewards.
In contrast, to be a full validator on the Ethereum blockchain, users must receive a minimum of 32 Ethers without withdrawing their staked and earned tokens until the Ethereum upgrade (previously called ethereum 2.0) is complete. It should lock i. Staking is similar to yield farming in decentralized finance, a much riskier strategy that has yielded three, four, and even five digit returns over the past two years. However, according to Josh Greenwald, Uphold’s head of risk, this has led to a “major squeeze” on such opportunities as crypto hedge funds and transaction firms pour capital to reap these profitable returns.
“Returns from Farming governance tokens have plummeted fast,” he said in an interview. “But I think net flow to crypto will continue to be positive because ultimately there is nowhere else people can put money to get any returns from it,” the President said. Instead, money could flow into more stable crypto products like staking, which offer consistent payouts and decent returns. Greenwald says:
If you are used to earning 10% from your stablecoins, you are not so keen on buying and staking ETH. But now that this kind of free money has dried up for many people, I think most people will accept the market risk of shareable assets. The fact that these assets are 50% off is now particularly attractive.
3 projects that will reward users for time spent on the platform
Greenward, besides betting, an often underestimated opportunity is for end users to spend their time tackling early-stage projects. He noted that he went to bed when they tended to buy because they spent. These rewards often come in the form of airdrops, which is a way for protocols to reward early users by releasing free tokens into their wallets. According to the information received, recent examples of such airdrops include decentralized exchange dYdX (DYDX), which in September delivered a massive airdrop of over $100,000 for its most active users.
Greenwald said he particularly likes projects like Optimism, Arbitrum and StarkWare. “Our expectation is that we will start to see some great opportunities in these second tiers and they are not playing the same game as sidechains,” Polygon said, referring to blockchains like AVAX and Harmoni. Optimism, Arbitrum and Starkware have not yet distributed tokens. “I would expect that at some point that will change and one of these guys will make a marketing move to attract users to the platform,” Greenward said.
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