Is Crypto Staking Viable In A Crypto Winter?

It took a while but that crypto winter crypto natives were scared of when digital assets reached all time highs in 2021 is now here. When a coin shilled by Kim Kardashian got dumped so quickly that its holders sued her, people got the first signal that the market was on the edge. However, if that crypto winter memo wasn’t received then, it certainly happened when giants like Celsius, Babel finance, and Three Arrows all got sizable chinks in their armor. The rapidly falling price of Bitcoin is also a sure signal that things could get worse. If you’re a spot trader, these trends are rather worrying.  

Sadly, it’s not only crypto prices that are taking a beating. Right now, many cornerstone Web3 startups are illiquid, and others have simply been hacked into oblivion. The long and short of it is this; things are not looking too good in the cryptoverse. 

Of course, this raises an even more important question. What does one do in a crypto winter? For many, the solution is to cut their losses and lock their wounds. For others, the solution is to go even more in and wait for a crypto summer, as it were. 

But there might be another solution. A solution that’s halfway between selling all your crypto to avoid going into more losses and buying coins that may or may not appreciate. 

Staking, The Hero Crypto Needs

Staking your coins is probably the least adventurous thing you can do in a bull market. Staking your coins during a bull market is tantamount to taking out a huge ad in a national daily and announcing that you aren’t interested in record profits for a while. 

Even in normal market conditions, staking isn’t something investors find attractive. That’s because most of them prefer to have their financial destinies in their hands, and staking takes away that power. By staking coins for a while, they are also taking a huge risk. If the market suffers a shock and the value of the coins suffer a huge drop, the loss in value may outweigh whatever interest they earn on them. 

Given these conditions, it’s not difficult to see why staking is not popular among Institutions and traders. But all these conditions are only valid in a bull market. 

In a bear market, the promise of profits gets so slim that it changes everything. In that sort of market, even the so-called meager returns from staking may prove to be better than any other financial adventure. 

If an investor were to stake their coin throughout the crypto winter, they would have earned at least 10% more than investors who didn’t. Of course, this is contingent on a few factors. The fact, though, is that staking can be a useful middle path to thread for investors. 

Another important problem that may stop people from staking is the capital lockup. As everyone must have known by now, the crypto ecosystem is so optimized for innovation that incredible things can happen within a moment’s notice. If a quick avenue to earn even higher than that profit opens up, the funds will still be trapped because of staking. This powerlessness that staking gives investors is one of the reasons why, even in a crypto winter, many do not consider it. 

Thankfully, the ecosystem has found a way around it through something called liquid staking. Liquid staking leveled the playing field and made staking a viable way to not just invest, but to invest in a crypto winter and possibly come out the other side better off. 

When you liquid-stake a particular token of a coin, the organization you’re staking with offers a derivative of the staked amount. Those derivatives can be used for other DeFi projects on the same network. With this solution, both the investor and team processing the staked funds are satisfied. 

Now, this isn’t to say that liquid staking is perfect. It even has some imperfections. For example, there is the criticism that it completely defeats the purpose of staking. But the good liquid staking does to the ecosystem is a lot more important than any perceived bad. 

Unfortunately, only a few companies have cracked the protocol, and only outliers like Ankr provide both staking and liquid staking. Ankr staking is, in many ways, a first mover in this emerging part of crypto staking. They are one of the very first organizations that allow both retail investors and institutions to stake their funds in a way that is sustainable for business. By providing seamless liquid staking, the company ensures that staking doesn’t have to mean tied down assets. 

It is really easy to stake with Ankr too. All you need to do is pick which asset you’d want to stake from seven leading proof-of-stake networks. That includes Ethereum, Polygon, Binance, Fantom, Avalanche, Polkadot, and Kusama. Next, you enter the amount you want to stake, and which liquid staking derivative you’d like to receive. These derivatives represent your staked tokens and are essentially like receipts that you turn in when you want to unstake your assets. The derivatives will automatically be sent to your wallet, and once you confirm the transaction it’s done. Once you’re done, you can start earning as high as 15.5% APY on your tokens. Yes, even during the crypto winter.

Ankr’s percentage yield on coins is probably the best you’re going to get on the market right now too. For example, Ankr offers as high as 4.13% APY on Ethereum when liquid staking potions like Synthetix offer only 4.08% APY  — which is the best of its class. It’s the same for BNB, where Ankr offers 4.96% APY and the best of the rest offer only 4.26% APY 

But the percentage yield of Ankr’s liquid staking is not even the best thing about it. The best thing is the fact that you can use the derivatives in different ways. For example, you could provide liquidity to DEXs, get farming rewards, and increase your yield by depositing in a vault or borrowing against your liquid staked tokens. 

Perhaps the most reassuring thing about Ankr having this solution is the certainty that your staked funds are completely safe. Ankr deposits them with the best-suited nodes and reduces any risk of slashing. The company’s history and reputation in providing sustainable Web3 solutions precede it, and there’s probably no liquid staking option that is more reliable. 

We are still in early days. As more people discover liquid staking, we’ll eventually come to realize that it’s the most innovative way to not only lock assets but also to survive a crypto winter.