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Things You Need to Know About Staking Before You Start

As each of us embarks on our own Defi journey, we share different experiences, lessons, and mistakes along the way. The cryptoverse is a confusing place for newbies, where experienced crypto investors may also make fundamental mistakes from time to time. In this article, we will focus on some things I wish I knew before staking my crypto assets.

Stake tokens that you’re planning to HODL

As staking your crypto assets doesn’t always give you the option to liquify your staked tokens immediately, the general rule is to never stake assets that you have the intention of selling. With crazy daily swings in crypto markets, there is a chance for your assets to moon or be caught in a rug pull at any time. In both cases, you might want to be able to sell quickly to avoid major losses.

This can be avoided if you trade tokens that are well established with higher market caps and volume so that the value of the asset will not fluctuate as badly.

Scammers

Scammers are rampant in the crypto space, lurking in every corner ready to strike whenever given the chance. With people posing as official admins within the community or platforms manipulating the interest rate and claiming unnecessary staking fees, it is beneficial to stay alert and be mindful to avoid such scams.

Invest only what you are willing to lose

Although staking is a popular way of earning rewards from crypto assets, your overall portfolio after staking could still very well be a net loss, as there are many risks and situations that may not work in your favor.

The crypto space is a harsh place, notorious for its volatility, where your staking returns could very well be way less than losses due to adverse market movements, making your overall portfolio a net loss. However, if you already decided to hold this token long-term regardless of price movements, the pros of taking will outweigh the cons.

Know the difference between lock-up periods

DYOR. There are different lock-up periods for different coins where some tokens may follow the (30,60,90) day period where you can claim your rewards immediately after the stipulated date, while some tokens allow you to unlock at any time following an unstaking period.

For example on CoinWind, you will be allowed to claim your staked ADA any time with a 5-day unstaking period, while ATOM will require a 22-day unstaking period. On the other hand, FIL will follow a (30,90,220) day fixed lock-up period, where you will not be able to withdraw your assets at any time.

Know what you’re getting into

When you stake your crypto assets, you may earn a fraction of the tokens you put in. Some exchanges offer a way higher APY, with rewards in the form of the platform’s native token. While a higher APY is tempting and seems to be the most valuable option, there are some underlying risks we have to take note of to proceed with caution.

Other than considerations pertaining to volatility and market risks, we should consider that such coins may have very small market caps without a healthy level of liquidity. You might actually be locking up your crypto assets to get rewards that aren’t even worth your time and effort.

Conclusion

CoinWind offers a safe and transparent space for our users to stake their crypto assets. With live addresses placed at each staking product for users to refer to, and constant audits set in place to ensure a high level of security is maintained, you can sleep soundly while your crypto assets work hard for you.

· CoinWind Website (Start Mining)

· CoinWind Twitter and Telegram Channel (For the latest news)

· CoinWind Telegram Community

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