Gotta Keep Staking

The market moves like ocean waves at a beach, and the Bear/Bull cycles are the tides that move in and out regularly. Once you understand the ebb and flow, it’s easier to see that a market is measurable and somewhat predictable— like the tides.  Likewise, anything on the ocean’s surface bobs up and down with the water. Only that which gets damaged, abandoned, or was built with holes sinks. The same is true for market investments.

Indeed, there’s no H2O in the markets, but there are a variety of ingredients: emotions, people, actions, events, prices, excitement, fear, and volatility, just to name a few. You can bet all markets are different with such a mix of components.

The past few weeks have brought a few waves into the shore, and those who can ride the waves make gains.  I don’t much care about any of the price movement as I see my investments as long-term. I’m thinking years, not months, and I’m still seeing this as a bear market.  It’s great to have upswings and downswings, but I don’t subscribe to the theory that the market is mooning and crashing. The movements are well within the norm for the markets they are in. The news would have you believe crypto is dying a painful death every week, though this perspective is likely drawn by personal exposure to truths and facts.

The Details

It’s evident that I’m working hard to build my ETH position pre-merge. I was able to capitalize on the last market movement as it was decent enough, and I had enough forewarning to react accordingly. In other words, I could see the large wave in the distance coming close to shore. I made a new 100 USDT by buying and selling a few assets like ADA and FTM. But more importantly, I made 0.04 ETH by going back and forth between ETH2 and ETH on Kucoin.  ETH2 is staked ETH on Kucoin, just as BETH is staked ETH on Binance Global, and stETH is Lido staked ETH.  Essentially, it’s all exchangeable 1:1 for post-merge ETH. So, ideally, I wouldn’t have to do anything with my ETH2 balance as it would just become ETH 2.0, hence the name.

Since it’s staked, my ETH2 grows daily on Kucoin. I have some staked on Gemini as well, plus some stETH, but I don’t have any BETH. I’m not allowed to have an account on Binance Global because I was born in the USA. Anyhow, that’s what ETH2 is, a staked asset. So, there’s another check mark on my massive list of crypto to stake!

However, ETH2 is not only a staked asset, but it also trades with ETH on Kucoin. I’m not sure why, but this provides a way to make gains in ETH by trading back and forth between ETH and ETH2. I set up the full trades in Bitsgap, complete with a BUY, SELL, and STOP LOSS (if I want.) Once a full trade is executed, I get a nice email stating the results. Here’s one that was waiting on me when I woke up from a Covid-induced nap:

It’s a welcome gesture that Bitsgap emails once a position is executed. Their effort certainly makes my part easier. All I have to do is set the buy, sell, and stop loss. Then I hit “go” and wait for the email. There’s no need to monitor what the market is doing—- just set and forget.

These days I’m ALWAYS buying and even though it’s risky, I don’t use stop losses. The risk lies in the fact that there is no telling where the bottom of each market really is, so I’m buying assets that I believe will survive to the next bull run. As you can see, this choice to not use stop losses is NOT wise as it can lead to trades that look like the one below. And this grim reality can hang around for a looooong time.

Whoops! Oh well— I haven’t lost anything until or unless I sell.  It’ll come back sometime this year. I just can’t use that AAVE for anything else until I buy it back. To be fair, it was a part of my “sell-off on Kucoin and re-buy on Gemini” process to stake the AAVE. So, I own more AAVE now than I did when I entered this trade since the AAVE I moved to Gemini has been staking this whole time! Looking at it that way, I could close this trade out by canceling it anytime, but I like keeping it going. Why? Maybe it’s because it’s just really funny to me. But then again, I have an unusual sense of humor.

USDT and Me 

Even though I don’t measure my success by the USDT value of my portfolio, that doesn’t mean I don’t track it. I just ignore it as it’s somewhat depressing and will remain so for a while.

Despite the gloom and doom, in the past two weeks, the USDT total value of my staking and spot portfolios has risen by 16%, and just this week, it rose by another 9%. So, if I had made all these purchases three weeks ago, I could sell them and make 25% gains in USDT today. Wait, that’s not all! There’s also the value of my BTC, which I track more diligently, and it’s increased by a FULL 22%!

I believe these massive gains happen because of the large quantities and wide breath of assets I own.  Each has a relationship with BTC, USDT, and ETH. This connection gives measurable gains when markets move up together in all three assets. Plus, I can compare one against the other, but I need to start calculating the ETH value of my assets as well.

This past week I set forth to do the necessary coding to bring the ETH valuations forward. Thankfully, the coding I did for the BTC worth was easily expandable, and I was able to clone that code and replace “BTC” with “ETH.”  I updated a few places in the rest of my app, and the result is an accurate ETH portfolio value updated hourly, courtesy of the Coingecko‘s free API.

Now I’m ready for the ETH merge!

The ETH Merge and Valuation

I don’t have any predictions as to what this ETH merge will do to my portfolio’s valuations, but I know that I own 322 distinct assets that are mostly on the ETH network. It’s tough to predict massive crypto-wide waves that serve as catalysts because they set off unprecedented mini-waves in each of the markets. Only time will tell, and I have the analytics in place to watch if ETH or BTC valuations of certain assets spike. Thankfully, there are more gains to be made trading these markets than the USDT ones.

I plan to watch the disruption caused by the ETH merge, and I suspect my BTC, ETH, and USDT value will fluctuate and make moves to arbitrage gains. I believe this is why the ETH merge got pushed out to September because it better aligns with the potential upswing in crypto markets.  Many models show a really positive September and aligning a massive market catalyst with a high tide may make larger waves, and I could gain much more ETH and BTC.

Since I believe all of these values will increase over time, I’m leaving it all where it is except the sidelined cash I use to spot trade.  Markets turning bullish usually give good entry points for long-term positions. Buy, stake, hold and sell…  the story of my life for now.

OM: I Need Mediation Here

I was trying to get my OM from Kucoin via the Binance Smart Chain into DEFI to stake, and the Kucoin BSC withdrawal was still not working after a week of waiting. This meant I had to dig in and find another way.  But first, I needed to do some research.

As I researched, I realized that the original staking contract I started in September last year was on the Polygon network, not the ETH network. Why is this fact important?  On the Polygon network, I can stake more without spending a fortune on gas fees!

Below it looks like I staked 100 OM on the Polygon (MATIC) network in September last year.

Since then, I have earned 41.5455 OM as a reward, and together the 141.5455 OM is worth a whopping $6.58.

Initially, I thought I could sell my OM on Kucoin and buy MATIC, then transfer the MATIC on-chain and buy OM on chain. But I did the math, and the trading slippage and gas fees will eat about half the OM I was looking to transfer. So, I abandoned this idea.

I also wanted to buy some more OM. To do that, I decided to use some of my ETH profits from my ETH2/ETH trades, so I put my OM on Kucoin up for sale at a massive gain in BTC. This trade will probably stay open for a good several months. Hopefully, some spike will trigger that trade.

The ETH gain is in Kucoin, but the funny thing was that I didn’t have to move any ETH to do this since I already had enough ETH on the Polygon chain to make the purchase.  To me, ETH is ETH, no matter where it is. And I’ve made sure to have it everywhere for this very purpose.

Anyhow, the result of what I ended up staking is here.

As you can see, I’m earning 1.1858 OM a day without doing anything. Once you get everything set up, I guess you could say staking is passive income. That’s why I already have 81 of my assets in staking contracts. This might seem like a small amount, because an OM is currently only worth $0.04. 

Fast forward a year or two, and perhaps an OM is worth $0.50. All the OM’s I have earned by that point will appreciate together, creating a respectable gain. And remember, I’m earning in-kind rewards on at least 80 other unique assets because OM isn’t the only asset I’m staking!

Bonus Staking Find!  

As I researched the MantraDAO, I found that I can also double stake my ATOM.  The process of double staking can seem a little involved, but to put it simply, it’s a way to get more value while staking. It’s called “Superfluid Staking” in OSMOSIS.  Without getting too technical, when enabled, the pooled OSMO is also staked inside the pools to make additional gains.  To maximize here, all I have to do is move some of my staked ATOM into the MantraDAO validator, and I should receive additional rewards from MantraDAO. By implementing this process, it appears I’ll be able to glean double rewards on some of my already staked ATOM.

Whenever you stake, you need to select a validator. With this strategy, you stake and select certain validators that give you extra rewards. In my case, I’m working with the ATOM that I staked back in February of 2020.

Would you believe that so far, I’ve earned 17 ATOM!  It pays to stake and leave well enough alone.

I didn’t look this up thoroughly, but I believe this type of double staking gives MantraDAO permission to use my ATOM while it’s staking.

If this is true, I will get my regular ATOM staking rewards of about 15% APY in new ATOM tokens, and I should also get an extra bonus I have yet to see. Supposedly, I’ll see my first reward in 16 days! (See image below.) 

I’ll keep you posted.

The image below refers to an additional APY of 46%, but I wonder on what? Does it mean 46% on the USDT value of the ATOM, or 46% of the total number of ATOM? Perhaps it doesn’t mean either one of these things. Maybe it’s just a split from a pooled reward? I know I could look it up as it’s written in the MantraDAO wiki, but I have so much more staking to do I have to stay focused. I will know in 16 days and be able to re-evaluate as the costs to stake were sub 0.001 ATOM (about a penny).

I hope that I get a ton of OM every couple of weeks. Who knows? But whatever it is, it’s more than I have now, and I’m good with it.

I Found my ETH OM

I thought I had OM stuck on the ETH network, and I do!  I found 183 OM just chilling in one of my ETH wallets, not being staked and with no ETH to use for gas to move the OM out. This find is an excellent opportunity to illustrate the foolishness of ETH fees. Look at what happens when I try to stake the 183 OM. See what I mean about outrageous fees?

I need to do two transactions to stake the OM: one is an approval of the contract, and the second transaction stakes the assets. The fee portrayed above is the ETH charge for the first one, which is usually the least expensive of the two transactions. This one is fairly cheap compared to what I have seen recently.

Now, let me think about this move. 

The OM on ETH is only worth about nine bucks, and the APY is only 16%. Plus, I already have more than 1k OM on Polygon with a 38% APY. Under these circumstances, I don’t think it’s wise to move forward.

So, what are my options if I’m not going through with the transaction?

In this case, I think I’ll leave the asset alone until the ETH fees make sense to sell. Unfortunately, I still have many other small bags stuck in ETH purgatory like this one. They, too, will have to wait. I believe after the ETH merge happens, ETH fees will be far less because there won’t be miners to pay anymore. ETH miners are still the best paid IMHO, making them largely responsible for the current huge fees.

The Takeaway

All told, I continue to wade through the ups and downs of the tide, pushing forward on my staking mission. With perseverance, I set my OM, and although this took nearly two full days of research and action spread out over two frustrating weeks, I kept my head above water. It’s done, and I can move on. 

Now, I can look forward to eventually adding more OM as I make new USDT by botting and/or trading. I used the word eventually because this ability is likely far into the distance, and its reward is even further past the horizon. But I believe in my strategy. Once something is staked, that’s it— just let it sit.

All in all, I have created the means; equally important, I have the patience to ride the wave. But most of all, I have the wherewithal to keep doing it over and over and over again.