We are in a world of inflation today. In laymen’s terms, this means that the cash we earn and use to buy other things is valued less than it was before. Another way of saying is that things are suddenly more expensive than they were before.
In such a world of inflation, cash is trash. The truth is that cash, especially the most common type which sits in your bank account, is losing its value day by day. The money that you worked so hard for is destined to lose value like some invisible force is robbing you daily. How does that make you feel?
You need to do whatever you can to make sure that your cash does not lose its value. There are other alternative sources for “investment” of your cash like stocks, bonds, real estate, gold, commodities etc.
But recently there has appeared another alternative way of investing our cash that promises AT LEAST 3x return of the interest you can expect from any bank. We are talking about Decentralized Finance (DEFI for short). The traditional way that interest and banks work is that the bank pays you the interest in exchange of you allowing the bank to loan out the funds you deposited to somebody else.
There was a time when the level of interest was quite lucrative – up to 20% during the 1980s, but today bank interest rates are basically zero and some are even negative. In this climate we need to look for an alternative opportunity to earn interest on our cash.
Imagine that there is an alternative universe where there are no banks like JP Morgan where a single bank assumes control over dollars given to them by millions of people like you and I. Instead, the world has another alternate currency and everybody agrees to put up their money onto an automated cyber bank with certain algorithms that regulate the lending and borrowing of money in that universe. THIS universe IS the one that exists in cryptocurrency today.
The automated cyber bank without any people is possible as a result of blockchain technology. I will have another post dedicated to explaining what this ‘blockchain’ technology is about.So technology has enabled after the great banking revolution, another ecosystem where people are able to raise capital and access capital in a different way. Like all new technologies, this beckons the question: Is DEFI a fad? Is it a scam where somebody online is working behind the automated cyber bank to get everybody’s money only to make a run for it? One way of checking this is seeing how many people have actually invested their money into DEFI. The total amount of money staked into DEFI globally as of 12/2021 is $ 256 billion. The use of the word ‘stake’ here is important. What it means is that people have voluntarily agreed to have their money be locked away in the defi cyber bank fault.
Now the defi bank does not just hold onto the funds. It lends it out to people online who put up collateral but do not need to have a credit score.
It is the compensation in the form of interest given to the crypto lenders that is the central part of our story. It depends of course on the type of crypto that is being used as the currency for funds being lended, but in truth even the lowest interest rates charged by DEFI come out to be almost 3x the current bank interest rates of just 1%.
List of major cryptocurrencies that enable staking (source: stakingrewards.com)
For example, if I invested $1000 worth of SOLANA cryptocurrency, I would able to earn a 5.78% interest annually on the $1000 I invested. That is roughly $57 I can earn. The key is to compare this return to the return if you had invested the same amount into a bank savings account. The savings interest rate for Bank of America is 0.01%. This would amount to a return of a mere 10 cents! Compared to investing and staking your cash in SOLANA gives you 570% higher return!!!
So now that we see how much we can earn in staking, we can go into exactly HOW you all can start staking crypto using DEFI:
What you need
– A working account that allows you to buy crypto from an exchange (i.e. FTX)
– A working account on a wallet app that enables staking (i.e. Celsius App)
– Cash to buy the crypto
In our example, we will buy and stake BTC on a crypto wallet staking app called Celsius.
Sign up for an account on the Celsius and achieve KYC on the app as well.
Once you are approved to buy and send crypto, deposit your cash into your cryptoexchange account. I have another post that goes into details on exactly how to do this. It usually takes about 1 business day for the cash to be credited into your account.
Once your cash is credited into your crypto fiat account, search and buy BTC on the exchange
Now select withdraw and select the BTC you just bought to withdraw
Access the Celsius and search for your Celsius BTC wallet address.
Enter the Celsius BTC wallet address as the recipient’s address in the exchange withdrawal page and complete the BTC withdrawal
In about 15~20 minutes the BTC is transferred from your exchange account to the your Celsius wallet account
As long as you keep your crypto in the Celsius wallet, it will permit you to earn around a 6% interest in the crypto that you had staked into the Celsius wallet
The really cool thing is that the Celsius BTC staking interest-earning opportunity is only one of the thousands of opportunities a user can invest into crypto earn an interest that can be MUCH GREATER than the example we have outlined here. I will be posting more on other ways you can invest into other cryptocurrencies using defi to earn an even higher APY.
In the meantime, try staking on Celsius by signing up using the link below:
For now, the key thing to note is this: Our new cryptocurrency technology has created another much more profitable way of investing in a time when bank deposits and cash are not even close to providing the returns that we as cash holders are looking to realize
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