"Staking is the Preferred Way for Hodlers to Profit Even in Bear Markets"

3개월 전

This is a headline that I came across which sums up the shift that we are seeing taking place.

It also tells the story of where we can expect to see growth come from in this industry.

Cryptocurrency is a technology that is starting to draw a lot of attention. Due to the attributes that it carries, it is an effective means of creating an alternate system to the one we are presently dealing in. This is what is going to garner the interest of the masses at some point.

I long maintained that giving individuals the opportunity to receive crypto via rewards is crucial. Projects which offer that (such as Steem) are going to stand out. Absence this, we are simply recreating the present system where the few with fiat are able to get involved while the rest are left out.

When dealing with the financial aspect of things, we have two variables to consider: income and wealth. The majority focus upon the first while the elite few are concentrating on the later. Have you ever seen a Forbes 400 List of the highest income earners?

We all know money is not everything yet when one is in a position where he or she cannot even afford the basic necessities in life, there is a problem. Unfortunately, for humanity, the number that fits into this category seems to be growing, at least in the developed countries.

Cryptocurrency offers another alternative. It provides a way to completely reinvent the Internet so that the masses are able to benefit. Over time, I expect the offerings that people can take advantage of to grow. This will provide people with a stream of rewards. When people are being compensated in 25-50 different tokens a month, the possibility exists to grow some wealth.

The headline I cited came from a financial site called "Finance Magnates". It was from an article that discussed how traders often get burned in bear markets, especially in crypto without many ways to short. Hodlers found that getting a return on their tokens is a way to offset this.

Of course, those of us on Steem long realized this. Regardless of what is happening to the token, if one powers up (Steem's form of staking), one's account will grow. Hence, when the market does turn bullish, one is in a better position to benefit since that individual is hodling more tokens.

The rest of the industry is just starting to catch up. What is also fascinating is that Steem is already seeing a second layer of this. Not only does this option exist at the base layer but also with some of the Steem-Engine tokens. We see the ability to stake many of them, some of which provide a payout based upon the inflation rate.

Which brings up another major point.

Steem does not pay interest. This is crucial to those who are in the Muslim world, many of whom believe that receiving interest on loans if forbidden. There are also tax consequences to interest.

Since STEEM is paying out as a way to offset the inflation rate, this is not considered interest. While it might look like it from the outside, it is not. This could open up the doors to a market that most cannot engage upon. There are well over 1B Muslims in the world, many of whom will be looking at cryptocurrency in the future.

Nevertheless, the world of finance is starting to view cryptocurrency as a method of wealth building. The initial phase was straight speculation. Buy a token and hope the price increased. This worked well for many Bitcoin millionaires who hodled their way to "Lambos".

What we are witnessing now is a much bigger wave. When the talk track shifts from Lambos to annual returns, we are opening up a bigger segment of the market. The paradigm moved from those with the gambling mentality to one of growth. This is more appealing to a greater number of people.

As we see platforms expand and more options offered, we could end up seeing this idea penetrating the psyche of millions of people.

It is a rather simple idea that anyone can implement:

Get involved with a platform where one can receive cryptocurrency as a reward. Stake that reward to receive some type of passive return and watch one's holdings grow.

Rinse and repeat.

Isn't that exactly what Steem is offering to people right now?

The answer is not exactly. Steem takes it one step further.

Not only can one stake his or her tokens to capture part of the inflation rate, delegating to other projects also provides an added benefit. When one does this to an application, as an example, he or she can receive that app's native token.

Thus we see a number of different benefits to staking (powering up).

Here is an example of the ideas that are being floated by the financial community.

One of the top-performing tokens in the market is the DAPP token, which is the native token of LiquidApps (DAPP Network). The DAPP token has a total supply of 1,000,000,000 DAPPs, its token generation has started since Feb 26, 2019, and it will end on Jan 25, 2020.

One of the key facts that make DAPP token a top-performing staking token is the fact that investors staking the DAPP token can expect a nice return of about 9% annually.

For long-term crypto hodlers, staking the DAPP token for a decent 9% annual return is a nice low-risk use case compared to low-risk traditional and crypto investments. For instance, people who stake on NEO can only expect a 5.5% annual return on their portfolio.


When looking at these returns, they are dwarfing what the traditional markets are paying with interest rates so low. Yet isn't it ironic they promote the idea of 9% as attractive when Steem has @spinvest with a goal of 20% annually?

For a couple years now, I periodically wrote how Steem is a compounding machine. Each thing we do leads to something more. The action we took today builds upon what we did yesterday, which can help to grow accounts. There are many different ways that rewards can enter one's wallet(s), many offering similar opportunities as the base layer.

This paradigm shift is only going to grow. The idea of attracting a lot of people into cryptocurrency when it is pure speculation is not going to be very successful. However, when the talk track shifts to making an annual return, that is going to open up an entirely new group of people. Instead of trying to find the "rollers of the dice", we are now going to see more conservative people enter the market.

I still believe this is but another phase in the process. Ultimately, we are only scratching the surface with this technology. We have no idea what the third and fourth iterations will ultimately look like. However, in the meantime, we can start with the idea of getting people involved so they can establish a baseline to grow from.

It is very interesting how quickly things can shift.

Proof-of-Stake is starting to gain some attention.

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How is 2.25% APR through the inflation pool for HODLing SP not the same as interest. In my mind, it is exactly the same.
You offter the bank money to be locked up and you used to earn interest on that. With Steem it is exactly the same. You offer to lock up STEEM and receive interest for that.


It’s because the real underlying asset is Vests, not Steem Power.

I did a post about this in August:

It has links to earlier an earlier post where I also discuss the implications for Muslims and a @lukestokes post emphasizing that while on the surface it may look like interest, it really isn’t. Your real holdings are Vests.


Thank you for the reply and the link to the post.
I think I see it clearer now. So the APR is like the bank would give you money to counter the inflation of the currency. Of course, that does not exist in the non-crypto world, so it is no interest but some kind of little counter inflation to compensate you (at least a little) for the losses due to the inflation pool.

I am not sure if I understood this correctly, but it does make sense in my mind now.


I thought they were against paying interest, not receiving it


FWIW, the comment I read that started me thinking about the topic was from a Muslim who was concerned about receiving interest.

For example this Muslim discussion of interest seems pretty clear:

When one reads the Islamic texts concerning interest, one is immediately taken by how stringent the warnings are against any involvement in interest.

Also, two (three?) Muslim Steemians have thanked me and mentioned that they agreed with my analysis. Not as “official” as a ruling from a council of Islamic scholars, but I’ll assume that those who contacted me are more versed in the Quran than I am.


If indeed they can’t accept interest then maybe we should use another word, like “the blockchain is paying rent to the steem power holders” muslims own income property so surely they’ll accept the inflation as rent

Good post, @taskmaster4450 (as usual)! But I don't really get the point of @spinvest. I've read a bit into it, but it still doesn't make any sense. Why wouldn't you simply buy Steempower yourself and delegate them to a project; or use services such as dlease.io. But even then, the max APR on dlease is currently at 17.5%, so how is 20% possible?

But let's say 20% are actually being given out, is there any security that those funds aren't just gone? I mean, you're holding a SteemEngine token from somebody who AFAIK is anon.

Would love to upvote this post, but don't really want to advertise a project which I'm not comfortable with. However, maybe you can clear some of the doubts above.


You certainly raise a variety of good point @therealwolf.

To start, the leasing is only one aspect of the return. Although there is not a lot outside of it at the moment, there will be other avenues pursued over time to also create a return. A small amount of BTC was purchased thus far.

We also know there are other ways to create a return on Steem. For example, posts receive upvotes which provide a bit of rewards each day to the fund not only in SP but also LEO and PAL. The idea of staking LEO (to start) that is earned and curating with it also provides an avenue of growth.

The idea is the community can collectively make it grow as compared to a single individual.

There is no doubt that one can do this on his or her own. The key is time and effort. If one wants to put the time in, he or she can do it. However, there is something that comes into play that few thought about.

If you put 500 SP to work leasing, at the percentage of 17.5% (like you pointed out), there will be 2508.12 after 10 years. This is true if it SPInvest does the leasing or an individual.

However, the SPI token is representative of what is being held. Thus, it is freely trading. Once 1 million tokens are out there, the only way to get them is on the open market. The value of the holding in STEEM is the baseline. However, one does not purchase that but the SPI token. If there are no more available yet there is still a consistent growth rate, that puts a premium on the token.

Hence the value of the tokens representing the 500 SP initially leased out can be worth much more than the equivalent than the 2508 that the SP grows into.

As for your final point, it is completely valid. At this time, things are very centralized since there are only a few people involved. The plan, over time, it is decentralize, automate, and have people taking on more important roles. This includes spreading out the responsibility of those who are in control of the investments.

This is obviously not for everyone and there is a degree of risk added to the equation, especially in the early stages.

The offsetting factor to this, in my view, is the ability to hivemind over time. When more people are involved, they bring knowledge that one individual does not have. In a rapidly changing landscape like crypto, this could be invaluable. The second factor is most of the STEEM is being powered up. This is one that helps the ecosystem along with locking the STEEM in. It does prevent the wake up one day and it is gone deal.

Sure it isnt 100% ideal as you pointed out and that is something all have to factor. Over time, this will get better as more step up to the plate and get involved.

That is the goal anyway.

Thanks for the comment.


You're quite right - there's nothing to stop an account powering up and delegating either directly or through dlease.io. I guess @spinvest is for those people who aren't able or don't want to do that themselves (or wouldn't do it themselves), plus it is a club - there are other people putting forward ideas and interacting, adding a social aspect that wouldn't be there if you did it on your own.
There do appear to be leases at 20.8% on dlease.io and @spinvest has fulfilled some of them. There has also been an off-market lease, and now, @spinvest has off-market leases with steemleo, also at 20.8%.
It is a steem-engine token. It's issued by @silverstackeruk who has two years' previous experience and reputation with the steemsilvergold community, including buying on behalf of the community. I haven't heard any rumours, rumblings or other reverberations from the steemsilvergold community or anywhere else about silverstackeruk.
The funds from token sales are all powered up - you can see what happens through steemworld.org/@spinvest and through https://steem-engine.rocks/@spinvest. They could be stolen, I guess. But they would have to be powered down first which would be a bit of an alert.
There is governance in place - an investment club partnership agreement. This is informal, and investors would have to go to court in the event of an unresolved dispute, like funds disappearing, and that might be difficult across national boundaries. Informal investments clubs governed by a partnership agreement are common in the UK. It may be easier to control investments and prevent fraud by having dual signatories for bank accounts etc, but I guess if someone wants to con you, they will, off or on chain.
The @spinvest account posts almost daily: there are weekly updates of holdings and earnings and investors (and club members, which is not all investors). Group conversions and off-chain buys are all documented in posts. The daily posts, over time, have set out a long-term vision for the investment club, including incorporating and having trustees in due course.
I'm an investor in @spinvest: I read every post, every day, and I ask questions. I'm probably a pain in the arse, but if you are investing money, then that is your responsibility to do.
There are fundamental risks:
i) not your keys, not your coins and
ii) steem-engine tokens are only pieces of digital fluff.
But as @taskmaster4450 says in his response, that will change over time as more people become involved and responsibilities are shared.


Thanks for being positive regarding dlease, just confirming that my current average is nearly 20% and was over 20% a week ago, my highest lease is 28.6% and have quite a few in the 22% range, If you are patient and keep the window open all day you will find them.

The thing about staking coins is getting in at the right time

What if you buy the staking coin at $10 each, expecting 9% returns annually. But then the coin plummets to $0.60 (kinda like how steem went from around $3 to $0.17 now) then that 9% is garbage and so is your staking position!!

I think the luckiest people are the ones who already had a decent amount to invest and they invested in like 24 dash masternodes back in the day.

24 dash masternodes would on average get you 0.22 Dash an hour, THIS is probably the best source of passive income I have ever seen, you don’t have to do anything other than the initial setup and making sure your power and internet are on at all times...

Good post, I hope steem goes back up in price and gets listed when staking coins are being discussed

Yes, !BEER Markets
I like that!

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Steem is in a good spot as it is able to take advantage of the capabilities of POS as well as using the Steem Power to help create value in the ecosystem. I have been looking at ways to get more investment driven here which will be interesting to see if others follow suit!

Spot on!

I have introduced so many people to Steemit through our musicians community but most have left due to the price going down. I've banged on incessantly about "compound growth" and the market cycle but most aren't willing to do their own research to realise what a MASSIVE opportunity we have in our hands right now!

I must admit I became very despondent myself during "Powerdowngate" but since the restructuring, the launch of Steem Engine and the hard fork I'm really excited again!

We launched our own token on Steem Engine (ATOM) to reward people who listen to independent music on our website and I have been staking every single token we receive on our @musicvoter account so people benefit even more from our curation trail.

I have also got my son involved as he is just about to start uni and I told him that if he posts and stakes regularly I think he will be amazed at the income that will be available to him when he has to find his first job. I'm even thinking he may be able to work for himself right away and maybe find a "hot desk" location so he can still benefit from the social side of being in an office environment.

The future of blockchain is a bright one!


Earn ATOM tokens listening to independent music on AtomCollectorRecords.com

Thank you so much for participating in the Partiko Delegation Plan Round 1! We really appreciate your support! As part of the delegation benefits, we just gave you a 3.00% upvote! Together, let’s change the world!

Does it matter if a token provide 10% APR when it fall 10 times or loose 98% value in two years. Ironically, even if start growing from its bottom (Say it dropped from $1 to 2 cents) at 10%, it will take 32 years to reach its initial value.

The bottom line is that if one buys the token at a certain price (say, $1). And it keep growing at 10% and in 32 years, it will be 20 times higher (e.g. $20).

In most cases, these PoS tokens goes to oblivion since they don't have any intrinsic value. It requires continuous number of suckers to buy the tokens forever which is not possible.

SMARTCash (SMART) is an example of such sucker story. Anybody could buy a Masternode with 10K SMART which provided (20-10%) APR.

It's price crashed from all time peak of $2 to 0.4 cents. Now think of the investors who bought it above $1 or even 20 cents. They will die or their progenies will die, but will never see ROI.

The smart answer is that if that token has good chance to go higher from one's buy point then all these APR makes sense.

Steem or LEO's PoS APR is a good selling point only if it has a good chance of appreciation. Due to utilities of Steem/LEO, they have intrinsic values and will be appreciated in the future.

However, any crypto or token that provides 10-20% APR that does not any intrinsic value due to utilities is probably a ponzi scheme and there is a very good chance that it will collapse in value. A high school kid can create or fork a PoS token and ICO it, then provide 10-20% APR. It will soon die or collapse.

I see a lot of value in this post. While I am becoming a strong supporter of steem (to the degree I can afford at least), diversity is just as important in crypto as in other forms of investment. So is researching what you are investing in!

To view or trade BEER go to steem-engine.

Hey @taskmaster4450, here is your BEER token. Enjoy it!

I never thought of steem as a staking token that gives annual returns, but I like it that you get rewards in different tokens for your article, its fun.

really like your take on the whole crypto issue. We should indeed think long term 👍