Because staking sucks. ... Not to mention the risk you take. Have we all forgotten about FTX already? Better off unloading everything and putting it into high yield dividends imo. The way I see it, at these levels there are three choices: Move it into ETFs that pay you nothing Lock it up in staking and risk everything for scraps Or start earning real income with high-yield ETFs that pay you now — not "maybe later" I think a lot of hodlrs are choosing the latter. Especially when you consider what's on the horizon: Australia recently unveiled plans to tax unrealized capital gains on cryptocurrency holdings, set to begin July 1, 2025, for assets valued over 3 million AUD (~2 million USD), at a rate of 15% . Denmark’s tax reform also includes a proposal to tax unrealized crypto gains—potentially up to 42%—starting in 2026—but this remains under legislative review and hasn’t yet been enacted .
You keep upside. Staking is like interest or dividend. But to get around regulations they're called rewards. Used for blockchain validators. Side note, There was a divorce where the spouses split their crypto but the husband kept the rewards, wife figured it out and went back to court
It’s like securities lending then? why doesn’t everyone stake? I was told staking smaller coins helped fund more development. I never understood the concept.
crypto staking is a generic term, the goal is to earn a yield with the least amount of risks and efforts staking on the blockchain for proof of stake coins like ethereum is not very enticing for small players, the OP is talking about exchange staking (token BGB Bitget exchange) but later pivoted to Pump (dot fun recently released token) staking on exchange the yield comes from securities lending for short traders of pump BNB (Binance token) popularized the exchange token staking as the Binance exchange gets allocation from the Binance launchpool and listings, they airdrop some to the BNB holders as rewards, the yield if immediate dumping of airdrops to BNB token range from 6-12% APY of the BNB staked (deposited) on Binance, and could be higher if the tokens are held and shoot up in value, most probably crash, but airdrops are essentially free so risk-free, except for exchange risks like Binance shutting down or account being frozen (i.e. being caught as an American when not allowed); tl;dr this paragraph, too foreign for non-crypto folks To get back to the topic of yields... it's called yield farming which has many forms so many choices, pick your poison, literally, and yes, staking is a form of yield farming Crypto is a $4 Trillion market cap financial system, yes, there is yield, lots and lots, tbh Given your background, I think AAVE is the easiest to understand, $27 B in deposits, $18 B in loans it's a crypto bank built on smart contract, no employees, open 24/7, no lockups, immediate deposits, immediate withdrawals, interests are compounded in real-time (I read somewhere 15-30 seconds intervals, but close enough to real time), variable rates, based on supply and demand (utilization) All interests are paid in-kind, if it's interesting to you, let me know and I'll go through a couple of 2nd level concepts besides simple deposits, and loans https://app.aave.com/markets/
I was specifically referring to staking the native coin of a proof of stake blockchain. Those chains use the coins in the validators. Last place I worked wrote a solana validator that I think was paid for by solana foundation in SOL. might have helped kick off the meme coin craze
Ah. That’s what I meant with the smaller coins. How does that work? From your description, that smells like market manipulation Jessie Livermore style.
The borrowers pay the yield to the depositors The spread between the borrow and deposit rates is kept by AAVE
You should ask that question to the Celsius Network guys (and others like them that went down during the Luna/Terra crash) The people in crypto land seem to be dead set on reinventing our Banking System from scratch (starting from concepts from the late 1800's and including very old mistakes like staking), only in a completely unregulated land and forgetting all the lessons learned in a couple of centuries of banking.