Crypto staking: What to notice
In the previous article, we mentioned 5 reasons to begin staking. However, is staking that easy? Do you need to do your own research before staking? Today Tokenize Xchange will help you answer the above questions with 5 things to notice in crypto staking. Let’s find out!
1. The lock-in period
The in-lock period is the duration your cryptocurrencies are locked. You are able to select the in-time period from the beginning of the staking process, for example: 1 month, 3 months, 1 years, etc. After this duration, you can get back the amount of crypto assets you have staked.
With Nodes or MasterNodes, taking part in crypto staking usually decides the lock for the duration of the Node in which they earn rewards as a source of passive income. When staking crypto, you cannot trade your assets since they are in a locked state. Hence, it is necessary to carefully consider your lock-in period.
At Tokenize Xchange, you can stake for at least 30 days and withdraw your cryptos from the 2nd to the 8th of the month. However, with Flexi, you can withdraw before the due date.
>>>Read more: How to choose the best crypto wallets for beginners<<<
2. Staking rewards
This is probably the factor that stakers are most interested in. Staking rewards is the rate of interest you will receive after the lock-in period. The higher your interest, the higher the amount of crypto coins you will receive after staking.
At Tokenize Xchange, you can stake 30+ cryptocurrencies including TKX to earn staking rewards from 5%. Especially, if you stake at least 100 TKX, you will get the interest up to 12%!
It’s not too good to be true!
>>>Read more: Proof of Stake: The real solution for environmental concerns<<<
3. Opportunity cost of staking
Similar to saving accounts, when you stake your crypto assets, they are locked up and cannot be withdrawn in a certain time. Hence, you will need to evaluate all the situations and investment options so that staking should be the best choice compared to trading.
If you are a veteran investor or a risk lover with experience in crypto investment, you may prefer actively trading instead of staking. In contrast, if you are a newbie who is still unfamiliar with concepts like long and short or a risk-averse investor, crypto staking is such a safe choice for you.
4. The minimum number of coins needed to be staked
This is the minimum amount of crypto assets for one user to start participating in staking. This number may vary from different projects, for example, TomoChain requires 100 TOMO, Decred (DRC) asks for at least 5 DRC to start staking.
5. Volatility concern
For beginners, cryptocurrency can be seen as a highly risky and volatile investment with corrections of over 50% quite often. Moreover, cryptocurrency is extremely sensitive to price manipulation as the market capitalization and trading volume of some cryptos may drive the price by changing its inflows and outflows. Also, as the crypto market can be manipulated by crypto whales, a tweet by Elon Musk could make Dogecoin dump.
As such, during the lock-in period, there will be numerous events that impact your cryptocurrency price. Be aware of those volatility concerns will help you consider thoroughly before making a staking decision.
Though a safe choice, crypto staking is still an investment choice that you should do your own research on before making your decision. Don’t forget to weigh up the risks and arm yourself with crypto investment knowledge with Tokenize Blog!
Cryptocurrencies are subjected to high market risk and volatility despite high growth potential. Users are strongly advised to do their research and invest at their own risk.