Apr 13, 2021

High APY crypto staking - how to get great interest rates on your crypto?

An widely underappreciated aspect of buying cryptocurrency is the interest that can be earned using it. Here is a rundown of a few interesting places where you get the most of your crypto.

Most crypto investors focus solely on the growth potential of the coins they buy. However there are numerous interesting avenues to earn interest on legitimate cryptocurrencies - and the values knock any other interest earning scheme flat out of the park.

We need to remember not all crypto interest-earning options are made alike. Some of them may be scams, while some offer high interest on very volatile coins. The latter are not for the faint-hearted - they may offer bigger than advertised gain if the coin price rises but also might cause a total loss. Crypto is a risky business and you need to decide for yourself how much risk you are willing to take.

The measure used to differentiate between interest-earning opportunities is called APY - Annual Percentage Yield. It tells you what would be the return on your invested capital after one year of investing it. So if you lock your crypto for one month at an APY of 200%, you will earn 200%/12 = 16,67%. Earning interest usually also involves gas fees, which particularly on ERC 20 networks need to be considered as part of your financial equation.

You earn interest with crypto by staking it. It usually means locking it up on a website for a period of time. Sometimes you have minimum lockup periods, we mention them in when showing the staking options.

So without further ado, here are some very interesting options to earn high APYs listed starting from the highest APY

 

0️⃣ XFai liquidity generation event (update)

XFai is a startup which is launching a new coin XFIT. A part of the launch will be a liquidity generation event on 15.04. Participants will be able to trade stablecoins for liquidity pool coins, i.e. depositing stablecoins as if they were depositing 50 / 50 the stablecoin and XFIT into the liquidity pool. Here are some technical pointers. XFai promises high staking rewards at an APY up to 500%. Apart from this the coin has growth potential.

Downsides:
The details and the exact timing are still to be announced, you have to track the XFai Telegram. While this does not help with planning, it does not mean the company is a scam. They are backed by at least one major crypto VC, usually a good sign of legitimacy. XFIT, as every new coin, is a risk. Apart from that staking in a liquidity pool can expose you to impermanent loss - however in this case it is less relevant, as this staking is esentially swapping a stablecoin for XFIT and this should still produce a profit apart from the staking APYs. However please read the exact conditions when they appear and decide for yourself.

1️⃣ QUAM liquidity pools

A relatively new crypto called QUAM can be staked on its website with an APY up to 1000% for providing liquidity. This is a little bit more complex than regular staking, as you need to provide QUAM and BNB or BUSD on Pancakeswap and create a liquidity token, which you then stake on the QUAM website. QUAM operates on the BSC network where gas fees are practically nonexistent. If you start staking till 15.04 and stake for at least a month you will get an NFT.

Downsides:
QUAM is relatively fresh and thus volatile. This may mean impermanent loss, which happens when the relative price of two coins in the pool changes. The staking process for liqudity is more complex than for regular staking. When you unstake liquidity tokens you incur a penalty of 10% of the staked value.

 

2️⃣ Launchpool.xyz staking pools

Launchpool is a launchpad for new crypto projects. It provides marketing / business support and a place to sell newly launched crypto tokens. It offers pools enabling users to either earn its native LPOOL token, or stake LPOOL for other rewards. Some pools provide an APY of over 200%. The platform is most probably not a scam, as it is strongly backed by Alphabit, one of the biggest crypto venture funds.

Downsides:
Staking is for now possible till May 24. The APYs fluctuate, as there is a fixed daily reward per pool meaning both pool sizes and token prices influence the interest. Staking requires approval, staking, unstaking, which means at least 60$ gas fees cost. LPOOL price is strongly dependent on the success of Launchpool as a launchpad.

 

3️⃣ Staking on Pancakeswap

The decentralized exchange (DEX) Pancakeswap has staking pools for its native CAKE tokens. When you stake CAKE you can earn a wide set of tokens. Most of them come from new companies, so the staking is not only about the current APY, but also future upside. Nevertheless, the APYs are very solid, sometimes above 100%.

Downsides:
Payoff in new tokens means this staking has a higher risk level than regular staking. PancakeSwap in spite of its name is an established DEX, so no funny business should probably happen.

 

4️⃣ Stake XPRT (Persistence) or MATIC (Polygon)

These two relatively new coins offer their users the ability to stake them via their websites. The process is a little bit more complicated, as you need to provide your tokens to validators running a node. Still, the APYs are solid, reaching 35% for XPRT and 20+% for MATIC. On top of that both cryptocurrencies have growth potential, making staking a reasonable option while waiting for the coin to moon.

Downsides:
both coins are relatively new, thus offer more volatility risk. The process is less straightforward than in other cases. For XPRT you even need to create a special wallet.

 

5️⃣ ETH or DOT staking at Binance or Kraken

If you are looking for reasonable APYs using mainstream tokens with growth potential, staking Ethereum or Polkadot is an option. The easiest way to do it is on exchanges - you can buy BETH at Binance at a discount, which is a wrapped token representing staked Ethereum. You can stake regular Ethereum on most major exchanges. Polkadot can also be staked on exchanges with high APYs. Kraken offers 12%, while Binance 12-18% with limits and lockups.

Downsides:
Staked ETH cannot be unstaked till the launch of Eth 2.0, but many exchanges offer a wrapped token representing it, which can be freely traded. Staked DOT on Binance cannot but unstaked till end of fixed 30-90 day period.

 

Once you get a taste of crypto APYs, it is very hard to go back to regular bank account interest values. However do keep in mind crypto in spite of the APYs still is a risky business and staking is less straightforward than e.g. using a bank account. We will provide more details regarding the staking processes in subsequent articles.