Reading time: ~2 m
Experts named several altcoins that can bring passive income
The opinions of experts may not coincide with the position of the editors. “RBC-Crypto” does not give investment advice, the material is published for informational purposes only. Cryptocurrency is a volatile asset that can lead to financial losses.
Many cryptocurrency platforms offer staking today. This is a way of passive income, in which the owners of digital assets block tokens in a special smart contract and receive a reward for this. This mechanism not only generates income for coin holders, but also increases the security of networks.
The products presented on the market differ from each other in the interest rate, the term for depositing funds, the number of tokens available for placement, and other parameters. Some sites offer floating rate deposits or flexible staking. Any number of coins can be sent to such a deposit without restrictions. The term for depositing funds starts from 1 day.
Fixed rate staking plans offer a fixed percentage of profits. To participate in such a program, a certain minimum number of tokens is required. And since this staking is carried out through smart contracts, the duration of the placement depends on the specific blockchain network.
The experts told RBC-Crypto about the various staking options that exist today in the cryptocurrency market, and named several promising ones for placing tokens.
The best option
Now the leading exchanges offer staking with a yield of 8-15% per annum, said cryptanalyst and private trader Dmitry Fomin. You can find more attractive products on smaller platforms, he said, but they will be less reliable. It is important to take into account that the indicated yield is indicative, it may change over time, the specialist warned.
According to the expert, when choosing assets for staking, the largest cryptocurrencies by capitalization, such as Bitcoin and Ethereum, will be a more reliable option. He added that higher yields could be offered for other assets, but in the future, these coins themselves could become very cheap. In this case, the loss from the fall in price will cover all the income received from staking, Fomin explained.
The expert called popular stablecoins such as USDT (Tether), USDC (USD Coin from Circle), BUSD (binance exchange stablecoin) and DAI (Maker Protocol) the best option for staking. The probability of their price falling is extremely small, Fomin noted. He clarified that the annual yield on them is 8-10%.
Promising altcoins
According to Roman Nekrasov, co-founder of the ENCRY Foundation, the following altcoins can be considered when choosing a cryptocurrency for staking today:
Polygon (MATIC)
Polygon is an ERC-20 compliant token that serves as a governance token in the Polygon ecosystem. Placing Matic cryptocurrency on staking now gives more than 8% per annum.
On August 5, Polygon’s price fluctuates around $0.93, and its capitalization is $6.9 billion, according to Coingecko. Over the past day, the altcoin has risen in price by 5.2%. The maximum price of the token was $2.92 in December 2021, since then the cryptocurrency has lost 68% in value.
Algorand (SOMETHING)
Algorand is a platform token of the same name, powered by the new Pure Proof of Stake consensus mechanism. Staking of the ALGO token brings about 6% per annum. This is one of the easiest ways to get passive income in the current conditions: it does not require the use of complex schemes. To receive rewards, you need to hold ALGO in a non-custodial (fully decentralized) wallet.
On August 5, Algorand is trading at $0.35, and its capitalization is $2.4 billion. Over the course of the day, the altcoin has risen in price by 6.2%. In June 2019, the cryptocurrency showed its all-time high of $3.56. Since then, it has fallen in price by 90%.
Ethereum (ETH)
Ethereum is the second largest cryptocurrency by capitalization. Even simple ownership of this asset can bring income in the event of a hard fork during the network update in September, Nekrasov believes.
The expert explained that staking Ethereum does not necessarily mean sending 32 ETH to a smart contract. In this case, we are talking about just keeping this cryptocurrency in your wallet, the specialist says. According to him, there is a possibility that after the Ethereum Network Merger in September, there will be a hard fork, as a result of which the blockchain could split into a Proof-of-Stake-based network and a new Proof-of-Work-based network.
According to the expert’s explanation, if a user has 5 ETH in their wallet, they will receive another 5 ETHPOW (new coins of the second network) as an airdrop. Nekrasov added that it would literally be money out of thin air, and there are no guarantees that these coins would have any value at all.
Most likely, their sale will be impossible in the next 6-12 months after the hard fork, the analyst noted. But he pointed out that there is a chance to attract an audience to the new blockchain, which means that the coins will also receive a market value.
On August 5, the price of Ethereum is about $1.7 thousand, and its capitalization exceeds $203 billion. Over the day, the altcoin has risen in price by 4.6%. The maximum price of the token was about $4.87 thousand in November 2021, and since then the altcoin has lost 65% in value.
Adequate yield
Due to the increased volatility of cryptocurrencies, investments in it are considered risky, including staking. This area attracts a lot of scammers, and most often it concerns young projects that offer high rates.
When choosing a coin for staking, it is important not to give in to greed and remember that the yield must be adequate, Dmitry Fomin warns. He drew attention to the fact that if the promised percentage exceeds 20-30% per annum, this is suspicious. The product could be a pyramid scheme or a scheme designed by scammers to attract inexperienced users, the expert warned.
#cryptocurrency #choose #staking #Expert #opinions
