The main differences between Stayking, DEFI and lending

In 2020, many cryptoinvestors began to actively use Staiking to obtain additional income from the holding of digital assets. As the leading blockchain projects on POS, this direction is rapidly gaining popularity, so we considered the main differences between Staying from similar directions, such as decentralized finance and lending.

Staceing is called the process of obtaining passive income through the participation of accumulated digital assets during the closing of blocks cryptocurrency with the Proof-of-Stake algorithm. Simply put, this kind of mining, for which instead of computing power, the presence of coins or tokens is required.

Since in blockchas-projects with POS transaction is confirmed by a predetermined system of nodes, depending on their share of the resource, then the remuneration between them is distributed accordingly. For example, if the user owns 1% of the tokens involved in confirming the truth of operations, it can count on the same 1% remuneration from closing the block.

In order for the system to entrust nodes to check the operations, the user needs to hold enough cryptocurrency in the wallet. Such a mechanism not only makes a senseless attack on the network, but contributes to an increase in the course of a digital asset due to blocking a part of funds in storages.

Staying provides owners a stable passive income is simply for the holding of assets, so it can be remotely compared with a deposit with dynamic yield. Profit size usually depends on changes in the course of cryptocurrency, stored amounts of funds and the duration of their participation in POS-mining. Due to high volatility, investors receive an average of 6-8% per annum.

Recently, the Waves.Exchange team introduced the first decentralized Neutrino USD (USDN) stubbindow, which is 100% secured by cryptocurrency Waves and supports Stayking with an annual yield of 12-15%. Since the remuneration is paid in the stubbinds, payments are protected from volatility, which is an important difference from the other POS coins.

Unlike projects such as EOS, Stellar, Tron, NEM, Qtum, Dai, the dynamic rate of yield USDN depends on the price of Waves and the share in Staying. So, in July 2020, the Waves rate rose by more than 50%, and the volume of reserved coins decreased, as a result of which the yield rose from 10% to 15.5%.

In 2020, due to the decline in the stock markets, a huge impulse received projects in the field of decentralized finances. In fact, they offer investors access to familiar insurance, management, forecasting tools, derivatives, and so on, but in a decentralized infrastructure controlled by smart contracts, and not by intermediaries.

Despite the automation of processes, the DEFI markets are subject to the same laws as the traditional, and the main difference is the lower cost of using tools and the publicity. Since the main mechanisms do not change, decentralized finances are subject to similar risks. In addition, the likelihood of errors in smart contracts, hacking systems with hackers, failure in the work of oracles is not excluded.

Staying is based on other mechanisms, so it is not subject to most of these risks. For example, the payout does not affect the current economic situation and other external factors, due to the features of POS, the attack with the purpose of hacking does not make sense, the owner can freely dispose of assets without loss of accumulated income, frequent remuneration payments minimize operational risks.

Steel in this case has additional benefits. For example, thanks to an advanced stabilization mechanism, the price of the same USDN is maintained at $ 1 even when the Waves rate decreases. At the same time, no centralized organization or company can seize the coins of users or block the account.

However, it should be noted that Staying’s yield often does not exceed the DEFI instruments. This is due to a higher level of risk inherent in decentralized finances. On the other hand, at a fairly low risk level, Staying’s yield is higher than that of most traditional financial instruments. Therefore, in this case, the choice is between the stable average income and the desire for rapid enrichment.

Some may have the impression that Staying is a digital analogue of traditional lending. Although in both cases the owner transfers its means for use with a certain goal without losing property rights and receives a remuneration for this, but these two concepts are very different.

First of all, the cryptocurrency purse does not leave the owner’s wallet, therefore the risk of no return is completely absent, there is also no redistribution and replacement of capital debt obligations. The investor not only retains complete control over his means, but at any time can get complete information about the state of the smart contract.

The turnover of funds and the rate of payments is also significantly higher than when lending, so they are fractional. Usually, the distribution of remuneration occurs after the closure of each new unit is closed, and in Neutrino USD it occurs daily.

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