Guide will be continually expanded. Last update: 4th March 2020
Bitcoin maximalist* always say, “Not your keys, Not your coins.” I’m going to be upfront about it and say that staking your bitcoins/crypto for interest has risk. Everyone has to make their own decision.
I have a core bitcoin stack that is in a hardware wallet never to be touched and a bitcoin stack that I risk for interest. In addition, it is in my interest (pun intended) to explore most of the DEFI* interest giving platforms to stay up to date in the ‘cryptocurrency’ world.
What is Bitcoin staking?
Simply put, you loan your bitcoin/s to a company. The company then uses the bitcoins to loan to other customers (retail and institutions) for higher interest. Usually, collateral is involved so these customers are not accessing the loans for free. Every company employs a certain loan to value (LTV) ratio. If the value of the collateral falls, there will be a margin call*.
There are a number of companies out there and I will expand this list as time goes by. Listing is alphabetical. Currency is in USD.
Binance started off as an crypto exchange but has only fairly recently included staking and lending service. It works differently from most other staking services in that there are limited amount of slots available. The fixed deposit only last for 15 days. Some people like it that way as a week in the crypto space feels like a month.
Click here to get 10% rebate on trading fees on Binance!
Pros of Binance Staking:
- Binance is a reputable exchange known for keeping funds SAFU
- Flexible staking available (Allows you to withdraw anytime)
- Shorter time period even for fixed deposits (15 days)
- Because it’s an exchange, you’re able to trade with a wide range of pairs immediately unlike pure staking platforms
Cons of Binance Staking
- If the coin/token is oversubscribe, then you’ll have to wait for the next batch
- Short time frame means you have to keep restaking under fixed deposits
- Staking is not available/not that fantastic for certain coins (e.g. BTC)
BlockFi is currently the first and only interest account that offers compound interest. This means that the monthly interest that you earn is compounded over to the next month.
Pros of BlockFi
- Compound interest
- Competitive interest rate
- Can be accessed without an app
- One of the preferred platforms amongst bitcoiners who ‘take the risk’
Cons of BlockFi
- Max of 10 bitcoins before the interest rate drops drastically
Click here to start an account with BlockFi
Celsius works similarly with other crypto lending platforms in that if you want a better interest rate, you need to buy and hold the Celsius token (CEL). The interest however is paid out in CEL if you choose to access the higher interest rates.
Pros of Celsius
- Very fast KYC (Identity verification) that is within a few minutes
- Great sign up bonuses (currently)
- Interest paid weekly
- Clean app interface
Cons of Celsius
- Their assets and loan amount are vastly different which have led some to suggest that it behaves like a bank, loaning out more than they have
- No website version, only available on the phone
- Interest paid in the celsius token (CEL) if you access the higher rates (great if it appreciates, bad if it does worst against the crypto token that you staked)
Celsius is running a great promo right now so IMO, just take the free money and decide whether you want to continue with the program after 1 month!
Click here or manually input referral code 14966335cf (safer to manually input the referral code) to start an account with Celsius and earn $10 in BTC with your first deposit of $200 USD or more!
Additional promo code to input:
*IMPORTANT* ENTER PROMO CODE FIRST!
Certified10 – Receive $10 in USD when you deposit $100 USD or more within 30 days
Certified50 – Receive $50 in USD when you deposit $500 or more within 30 days
Hello10 – Receive $10 in USD when you deposit $100 USD or more within 30 days
Hello50 – Receive $10 in USD when you deposit $500 USD or more within 30 days
Crypto.com (CDC) is easily my favourite place to earn as the app is very user friendly and functional. The CDC Visa card has served me well and I’ve already written about it here .The interest paid out on the platform is in the coin staked itself (BTC ‘give birth’ to BTC etc) and it is given out weekly!
- User friendly app with great functionality
- Interest paid out in the token staked weekly
- Competitive rates; one of the highest in the industry
- The 500 MCO tokens that you stake grants you access to other benefits
- Need to stake 500 MCO to be able to access higher interest rates
- App based which means you can’t access via a website
Bitcoin Maximalist – People who believe only in Bitcoin. They refer to other coins as ‘shitcoins’. There are varying degrees of ‘bitcoin maximalism’.
DEFI – Decentralised Finance: Conventional financial tools built on the blockchain
Margin call: A margin call is triggered when the investor’s tokens, falls below a certain percentage requirement. Also called the maintenance margin.
Disclosure: I hold bitcoin and a small amount of other cryptocurrencies.
Views and opinions expressed are those of the author and should not be taken as investment advice. Buying, trading, and staking cryptocurrencies should be considered a high-risk activity. As usual, readers are advised to “Do Your Own Due Diligence” (DYODD) before taking any action related to content within this article.