Staking crypto assets can provide the token holders with different rewards. The rewards differ depending on the token. But in most cases, you typically earn an annual yield on your tokens if you stake a cryptocurrency.
In this piece, we will cover:
- What is crypto staking?
- What’s the difference between staking and lending in crypto?
- What are the benefits of staking FTT vs staking other tokens?
Let’s get started!
What is Crypto Staking?
If you’ve been in crypto for some time, you’ve heard the term “staking” thousands of times. But most people have the wrong definition. They associate staking as a way to earn a yield on crypto in exchange for locking up coins.
While that’s a part of it, the key feature of staking is providing security to the blockchain network in a proof-of-stake (PoS) consensus mechanism system. Popular cryptocurrencies that use PoS are Solana (SOL), Cardano (ADA), and FTT.
Staking is a simple way of securing the network. The token holders lock their coins in a smart contract for a certain period of time in exchange for receiving rewards. The locked tokens are used to confirm transactions on the blockchain.
Depending on the crypto you stake, you get different rewards. In most cases, you’ll get additional tokens. For example, if you stake Solana, you’ll get even more SOL as a reward.
The safest way to stake or lend your crypto is to use centralized cryptocurrency exchanges like FTX.
Staking vs Lending
Crypto staking and crypto lending are two entirely different beasts.
Crypto staking is about depositing/locking the digital assets you own into a protocol in exchange for rewards. While you get these rewards, you lose custody of the coins to earn interest. People who don’t know how to store their coins safely like this feature because companies like the FTX exchange can provide better protection.
Crypto lending, on the other hand, allows you to earn interest on your crypto by lending it via a third party. It could be a decentralized platform like AAVE or via a derivatives exchange like FTX. On decentralized platforms, you need to do more manual work to lend or borrow crypto. On crypto derivatives exchanges like FTX, you can take advantage of the automation and save some time.
What Benefits do You Get From Staking FTT?
Staking FTT, especially on FTX.com, provides you with tons of staking rewards. You get free ERC-20 and ETH withdrawals each day and get higher referral rates when a person they referred to FTX signs up for the cryptocurrency exchange. They also offer discounts on withdrawals, whereas most exchanges charge a withdrawal fee.
Not only that, but FTT holders also get access to IEOs (Initial Exchange Offerings) on FTX. These offerings give people a chance to invest in brand-new projects that are just launching their tokens.
The more FTT crypto tokens you stake, the higher your chance of getting Serum (SRM) airdrops. Serum is one of the projects created with the help of FTX’s CEO Sam Bankman-Fried. FTX will give 5% of the total supply of SRM tokens back to FTT holders. At today’s price, that’s over $500 million!
Finally, by staking FTT, the coin holders could also win FTX-themed swag and get lower fees using the exchange. The more tokens you stake, the greater the benefits.
Here’s a complete breakdown:
Also, 1% of all net trading fees on FTX will be donated to the world’s most effective charities via the FTX Foundation. One of the key features of FTX is promoting effective altruism – a life philosophy based around maximizing the good you can do in the world by helping other people. That’s why the FTX Foundation led by Sam Bankman-Fried matches up to $10,000 per day per user donation.
Comparison of Staking FTT vs. Other Tokens
On FTX, you can stake four tokens – FTT, SRM, SOL, and Raydium (RAY). Each token is unique and gives you different rewards.
Here’s a comparison between the different tokens:
How can you stake the FTX Token (FTT) on FTX?
Staking on decentralized platforms is hard and worrisome compared to staking on FTX.
Here’s how you can stake the FTX Token:
Step 1: Go to the FTX exchange to pick your FTT pair.
Step 2: Go to the FTT page by clicking on “FTT” on the top bar.
Step 3: Scroll down to “FTT Staking” and click “Stake.”
Step 4: Put in the amount desired and click “Stake.”
Keep in mind that unstaking your FTT requires a 14-day hold from the time of request.
Conclusion: Is Staking FTT Worth It?
Deciding to stake FTT depends on whether or not you’re going to use the FTX exchange actively. Staking FTT gives you tons of benefits within the FTX ecosystem like trading fee discounts, referral and fee rebates, free ERC-20 withdrawals and more airdrops. Also, you can support FTX’s mission of effective altruism.
If this sounds like something you’d be involved with and active on the exchange, it can be a great option! To get started, create your FTX account and fund it today!