Steemit Crypto Academy | Season3:Week1||staking by @imagen

4개월 전

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It's good to be back for season 3. I am glad to be among participants of this intermediate class. I appreciate the effort of our professor @imagen for lecture. Here goes my Assignment.

QUESTION 1 Research and choose 2platforms where you can do staking. Explain them, compare them and indicate which one is more profitable according to your opinion. ( Binance is not allowed)

What is Staking?

Staking is the process of buying an asset and storing it in a wallet to earn or receive incentives. It's similar to HODL, but your balances are locked in stake, and you can't use them anyway you choose. At the same time, this helps the cryptocurrency's blockchain to work properly.

In this my assignment 1, I will be comparing Kucoin and Coinbase platform.

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KUCOIN

KUCOIN was founded by Michael Gan and Eric Don with Its headquarters in Seychelles.
KuCoin was founded with the sole goal of providing a safe and simple platform for people all over the world to trade digital money.
Kucoin is also known as "The People Exchange." It has a large number of trading pairs and crypto-related services. It was founded in 2017, and there are presently over 200 cryptocurrencies and 400 marketplaces on the platform.

KuCoin offers strong liquidity, with 6 million users, and a diverse range of supported assets, fiats, and services. The platform has consistently ranked in the top ten of the world's busiest exchanges.

COINBASE

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Coinbase is a digital currency wallet and platform located in San Francisco that allows merchants and customers to transact with emerging digital currencies such as bitcoin, ethereum, and litecoin. It was established in June of 2012.

provides a variety of services, including an educational platform, an automatic investing option, and a staking service.
Users who keep their tokens in their Coinbase wallet can presently stake three assets. As Coinbase's universe of supported assets grows, more stakable assets are expected to follow.

COMPARISON BETWEEN KUCOIN AND COINBASE

KucoinCoinbase
Short historyKUCOIN was founded by Michael Gan and Eric Don with Its headquarters in Seychelles, It was founded in 2017Coinbase is a digital currency wallet and platform located in San Francisco, It was established in June of 2012.
Stackable coinsKucoin support more coins such asCosmos(ATOM,EOS(EOS), Tron(TRX), Neblio (NEBL), DeepOnion (ONION), Energi (NRG), NULS (NULS), TomoChain (TOMO), EOSForce (EOSC), DAI (Dai) etc.Coinbase do not support more coins, They are just four of them Ethereum (ETH), Cosmos (ATOM) and Tezos (XTZ)
Rewardit takes a longer time to be rewarded and the asset ia locked in for a longer time.kucoin utilises the soft staking system that does not require locking up assets and reward can be collected on daily basis
Staking transaction Feesthe fees charged in staking with coinbase is higher compared to that of kucoin which is around 25-30%the fees charged with kucoin is lower with the rate of 5 to 10%

MY OBSERVATION

For my comparison above I have come to realise that it will be more profitable to stake using kucoin platform for the following reasons:

  • The staking fees for coinbase is higher than the staking fee with kucoin, which a lot of user will put into consideration.

  • The assets supported by kucoin is more, compared to that of coinbase which is just 4 and so therefore users will be able to choose from the list of many assets.

  • Another advantage of kucoin over coinbase is the adoption of soft-staking system which the opportunity to earn stake reward daily.

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QUESTION 2: WHAT IS IMPERMANENT LOSS?

Impermanent loss happens When you supply liquidity to a liquidity pool and the value of your deposited assets changes from when you deposited them, you suffer an impermanent loss. The greater the change, the more vulnerable you are to temporary loss. In this situation, the loss translates to a lower dollar prices at the end of withdrawal than it did at the time of deposit.

How Impermanent Loss Occur

When the value of the cash staked in the AMM swings dramatically, it is called impermanent loss.

The bigger the price changes, the greater the chance of a temporary loss.

Because of the volatility in a trading pair, these price swings essentially result in a temporary loss of capital.

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QUESTION 3: What is Delegated Proof of stake (DPos)?

Delegated Proof of Stake (DPoS) is a consensus technique that was created to safeguard a blockchain by assuring transaction representation. DPoS is a decentralized proof-of-stake system that uses voting and election processes to prevent blockchain from centralization and malicious use. DPOS was created by Daniel Larimer, an American software developer.

How does it work?

Delegated Proof of Stake is most commonly maintained through the election process. Active users of the DPoS-based blockchain cast their votes for "witnesses" and "delegates" by placing their tokens on the names of their candidates (these tokens are not spent; they merely represent the stakeholder's attitude and remain his/her property). Witnesses and delegates have distinct roles in different cryptocurrencies, and one function might absorb or even replace the tasks of another.

Example of project that uses Delegated proof of work DPOS

The DPOS method works through a voting system that is open to everyone on the EOS network. Any user who has staked EOS tokens has the ability to vote in EOS. With the full weight of their stake, each user can vote for up to 30 block producer candidates. For example, if a person has 1000 EOS staked, he can vote for up to 30 BPs with 1000 votes each. The core set of validators consists of the top 21 block producer candidates based on the total number of votes received. The network compensates additional block producers sorted by total votes to serve as standby block producers.

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Conclusion

Staking cryptocurrency is growing in popularity, with many users declaring it as "profitable" as mine. Unlike mining, however, it does not have considerable overhead or electricity expenditures.

When staking, the amount you earn is determined by a number of criteria, including the block reward, the quantity of supply locked, the size of the staking pool, and the highest possible payout, among others.

It's important to remember that staking isn't a get-rich-quick thing, and the returns you may expect may be lower than if you trade cryptocurrency. Staking coins is a less expensive and hazardous technique to earn cryptocurrency by participating in a blockchain network's validation process.

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Thank you professor for the effort you have put in explaining the topic to us.

Cc:
@imagen
@steemitblog
@steemcurator02

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Thank you @feliicia for participating in Steemit Crypto Academy Season 3.

You made a great effort, however, I would have liked to know the range of rates of return offered by each of the platforms you selected for the cryptoassets they offer for staking. This is important information when selecting one of them.

On the other hand, I suggest you to review the HTML codes and Markdown tools to center and justify texts, which adds more visual appeal to your posts, also, you should review them before submitting in order to avoid errors such as confusing the elements corresponding to the 2 column table you made to compare both platforms.

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I hope to continue correcting your next assignments.

Rating: 7.0