5 Major Staking Opportunities with Defi Dad
After a short-lived mania around FoodFi the last few months, I’m personally relieved to see the DeFi markets return attention to more quality projects. During equity market drawdowns, capital tends to rebalance into higher quality, fundamentally sound investments. In crypto and DeFi, it’s no different. There are definitely blue chip teams with blue chip DeFi tokens, and there are, well let’s call them “less than blue chip” teams. 😂
One of the most common mechanisms in DeFi (and permissionless applications built on Ethereum) is staking. I honestly don’t know where the term comes from but to stake, means to deposit an asset for an extended period of time. In DeFi, we often can stake an asset and withdraw whenever we want, but as you’d expect, the longer one stakes an asset, the more rewards one might earn. A primitive example of staking is when I receive a letter in the mail that says “Deposit $500 into a Chase account for 90 days and receive a $100 bonus.” The difference with crypto staking rewards in blockchain enabled applications, and specifically what I use on Ethereum is the following:
- Real-time earnings--often DeFi apps pay rewards continuously every second
- No minimum to stake in most cases
- No KYC (meaning no ID or sign-up)
- No lock-up (withdraw whenever I want)
In the near future, the mother of all staking opportunities will arrive with Ethereum’s migration away from Proof of Work (PoW) to Proof of Stake (PoS), where one can stake ETH and be rewwarded with additional ETH at some interest rate (eg 1.8-18% APY). If you want to geek out, EthHub has incredible wiki articles on PoS and staking mechanics forecasted for Ethereum.
On that note, let’s talk about 5
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