When the Bear Bites, I Eat Stake!

No, I didn’t misspell that. As you might have read in previous articles, I have turned my attention to staking— a method of growing the quantity of my assets and not worrying about their USDT value. Staking is a clever way to ride out a bear market. 

Staking is like having a crypto savings account and a way to earn in-kind rewards for your staked assets. Some APYs can be rather large, whereas others can be small depending on the platform and asset being staked.

Understanding what assets you own and the risks of staking are essential. If you see a staking APY set at 160%, it doesn’t necessarily mean you will double your money in a year.  In fact, it may lead to losing money. It’s confusing, for sure, and I’m going to attempt to explain it all.

Staking and APY

The Annual Percentage Yield (APY) received on a traditional US dollar denoted savings account is now below 1%, meaning if you start the year with 100 US dollars and receive a 1% APY, you will end the year with 101 US dollars. We all tend to understand this concept because it’s familiar, but transferring it to the crypto world makes it a little more perplexing.

Let’s assume you stake LINK and have a 1% APY.  You start the year with 100 LINK; you’ll finish that year with 101 LINK, but notice there is no mention of dollars. The US dollar value isn’t considered when staking crypto because the contract delivers the expected asset at the designated staking percentage, just as a US dollar savings account is contracted to deliver US dollars.

Understanding how staking works can be tricky, but it gets easier to follow once you know a little secret. Staking solid assets with a stable future grows the quantity of your assets in the hopes that the US dollar value will also appreciate over that same time.

Different Approaches to Building Crypto Wealth

I’m a HODLer, which means I am more concerned with what my assets can achieve over time than making a quick buck. Since I’m future-oriented, I’m not considering selling anything right now. Therefore, sending my assets into a safe staking contract to earn more over time just makes sense to me. With this mindset, a bear market doesn’t scare me. Conversely, it entices me to bulk up my quantities, hunker down, and hibernate through this excruciating crypto winter. 

But some people are day-traders, and they might get in and out of all their crypto holdings several times every day. Therefore, staking might not make any sense for them. For day-traders, the aim of the game is to pull down profits, bank them, and keep at it.  Most Crypto traders I know have a HODL balance of their most devoted coins, but some don’t and just focus on one trade at a time.

Like trading stocks, people have different techniques to grow wealth in this business. What works for one person may not work for others; likewise, what works in one market or political climate may flop in another. I always recommend examining your goals and choosing a path that moves toward them. This path often has lots of little steps, so getting to your final destination may not be quick or easy.  

Therefore, when I discuss my crypto journey, it may or may not appeal to you because I can only suggest what works for me— staking. For those people on the fringe who don’t know how to take the leap, this information might be valuable.

Getting Started in Crypto

At the beginning of my journey, I took my time to do proper research and sought assets with the most potential.  Much has changed since those early days. I have given up on one or two of my original holdings and added more to the speculative pile. Can I say I’ve been successful so far? Well, I haven’t entirely defined what being successful means because the success of each asset can be measured differently. In most cases, I believe I can measure success by receiving more wealth than I spent to acquire it. So, with that understanding, I have had some success. 

Right now, I’m ignoring the “volatility” focus on these crypto assets and their fluctuating USDT value. Instead, I’m focussing on the organizations behind the assets and their potential to grow. My staking commitments are each a minuscule portion of a larger, new financial ecosystem. By staking a small bit, I hope to increase as many of my asset quantities as I can. With any luck, their USDT value will also grow. At least that is the way I’m hoping this all works out. 

My Portfolio Manager 

Constantly growing my crypto wallet with new assets sounds like a good thing, but it also creates a problem. I have so many wallets in different places that it gets difficult to remember where they are and what’s in them. In fact, I interact with blockchain contracts worldwide on multiple blockchains. Some of these contracts require attention since not all staking contracts self-compound. This means I need to remember where and when to go back and push a few buttons to get the best gain. I’ve learned from experience you should always compound your staked assets, especially early on as the APYs are higher. That’s why I’m working on a reminder structure to prompt me to do specific tasks like re-stake in the Cosmos hub. Re-staking this hub is something I must do once every few weeks. Since I’m finding more and more of these tasks that take up time, I need structure to track them. 

As a result of having things so dispersed, I can’t quite get any of the off-the-shelf portfolio managers to add up right. I have had to reach into my past life as a web/database/analytics developer and start building a tracking system that I hope will bring forward certain assets at critical times in their asset value. This system is on Version 5 now, and it’s my hope to organize and deliver specific tasks when manual tasks are needed, so I’m building towards that goal.

As a result of having my own digital excel-like playground where I load all my assets, I can follow my portfolio trends which have up and down days relative to USDT.  With my recent upgrades, I can track my whole portfolio’s Bitcoin (BTC) value, and I have noticed that it doesn’t fluctuate much. Since accumulating more BTC is my primary long-term goal, I try to follow trends and not react impulsively. As I’ve watched the daily movement, I’ve noticed a steadfast stickiness to my portfolio BTC value and even a slight increase in BTC value over these past few weeks.

Since I’m not selling any crypto now, why do I care what it’s worth in USDT? I believe in my staked assets’ long-term performance as an outsized risk-adjusted investment. I just want them out of sight and out of mind for now, so I don’t do something stupid like sell them. However, I must remember I have them and occasionally check back at key times so I can reap their rewards, sell off a portion, or even send them into a bot. 

My investment is in BTC as I believe this will be the main survivor. This BTC portfolio value is what I look at and grow; it’s my goal to make it larger and larger, knowing that if ever I want, I can liquidate and get at least that much BTC. I say at least that much because I still haven’t figured out how to reliably add my liquidity pool and farming data into my tracking system, so I’m short reporting my balances. I still have to find them and document them in my new system somehow.

Why Stake?

The most common reason to stake is to earn more of that same crypto investment. But some staking gives rewards in other assets or even a non-monetary reward like being able to participate in a financial or entertainment opportunity.

My most successful case of staking was when I first got into ATOM nearly two years ago. Today, my ATOM is still active, and I have earned 18 ATOM, worth about $180 today. My strategy is to hold my ATOM until it’s over $50. Then I can realize my gains of $1,400. When will it hit $50?  I don’t know. But when it does, I’ll be ready to start selling. 

Remember, I’m still making more ATOM daily at about 16% APR by keeping them staked. If I want to, I can even sell off the earned ATOM as I make it and use that generated USDT to pay my bills; however, I don’t always re-stake the rewards.

Besides giving yield, staking is a way to show support for a network, just like banking your dollars shows your support for the dollar. For example, staking my ATOM shows my support for the COSMOS ecosystem. The belief that an investment is a good one leads folks to buy and store away potential gains for a future day. The fact that many of my assets are staked means that I believe in them and root for their success.

Finally, the staking process keeps lots of coins off the market and pushes price movement up over time. I see this as my small way of helping the market appreciate. The more folks who stake (or HODL) the same asset, the less available that asset is for new holders to purchase.  Many investors wrongly ignore this supply/demand concept, but it could be a realistic market mover in the next bull cycle.

What I’m Doing Now

Currently, I’m cycling through all my assets and finding the best deals on where to stake them. When I started this process about a month ago, I had only 5% of my assets staked, and as of 2 weeks ago, I was up to 22%. Now I’m up to just under 34% before finalizing this article. I’m aiming for 40% staked assets because I’m almost half exposed to BTC at this point because of all the altcoin USDT depreciation, and it’s tough to stake that now.

I’m looking to the exchanges that hold some of my assets for other staking possibilities. Kucoin has a decent “Earn” platform, and I feel confident it will be around in a year. This platform makes it super simple for me to deposit and redeem supported assets. They are constantly updating the crypto that can be staked, so I often do my research before the best staking contracts get gobbled up by other Kucoin users.

Though it’s not always the wisest idea to stake at an exchange, I trust Kucoin for the time being, and I believe staking there is safe. Exchanges, however, are like anything else in the investment world, and you have to be careful. Some are sound and respectable, and others are sketchy, so research is key.

Gemini Earn is another staking platform on a well-known exchange that is super easy to use. You just click the ‘earn’ button, prompting you to transfer your assets from your spot account. Gemini is a nice place to begin your crypto journey, but the best place to stake is a proper non-custodied wallet where you hold the keys. Having crypto in my own wallet means I control my assets at all times, and no third party can freeze, steal, or confiscate my crypto.

My Ongoing Staking Stories

I’ve been doing this crypto-thing for a long time, and the process is constantly evolving. As I explore these networks, I frequently uncover little microcosms of life. Each ecosystem is like a budding flower; some have yet to fully develop, while others are in full bloom with vibrant colors. This constant change gives people like me lots of possibilities to research and pursue. I always keep an active list of new ecosystems and strategies to research and potentially enact. 

Most defi networks I interact with have staking mechanisms because I targeted that feature when building my sub-list of assets I must find out how to stake. When searching for staking options and how to perform the contract interaction, I often discover new ecosystems with different structures, tool sets, and purposes. I look for the assets on my list that seem stable enough to be around for a while and that I have a large enough quantity to make a worthwhile gain. Once I have worked my way through my staking list, I’ll move on to research more non-staked assets and add them to my list of tasks.

I have a good routine rolling— research, document as a task, and execute. Using this method, I’ve gained nearly 20 newly staked assets in the past few months.  A couple of notable ones are highlighted below.

ZIL

I moved all my ZIL I could into my Atomic Wallet to stake. This process was super simple and cost very little ZIL, probably 2 total ZIL to move everything around. Currently, I have more than 10k ZIL worth around $400 staking in Atomic Wallet.

I’m unsure exactly what I paid for them since I have consolidated assets from at least five places where I purchased, traded, botted with, and staked ZIL. I’m just not going to sell for a while and stake instead as I have a large quantity of ZIL, and no matter the APY, I should be rewarded well. I know that staking as a strategy will give me a much larger quantity because even 15% APY, which is what it is now, will make well over 1500 more ZIL each year.

Here’s where I usually tell you what it’s worth, but I wrote this section a few weeks ago when I did the actual ZIL staking. I want to include the numbers from then and repeat the analysis as of today to show you how quickly the markets can change on such a small valued asset like this.

1 ZIL was only worth 0.0381 USDT 2 weeks ago. That put my 10,000 ZIL at a USDT value of $381. Fast forward to today, and ZIL is trading at 0.0452 USDT, putting my 10,000 ZIL up to $452 in value. This gain should continue to grow exponentially because I believe ZIL will be worth at least 0.35 USDT eventually.

ZIL is a capped asset like BTC.  In Bitcoin’s case, there won’t be any more than 21 million BTC, and in Ziliqa’s case, there won’t be more than 21 billion ZIL.  Currently, ⅔ of the ZIL has been released as the circulating supply is 14,588,019,559 ZIL.  

My expectation of a super high $.35 per ZIL is based on ZIL’s all-time high of 0.255376 USDT in May of 2021.  Thirty-five cents would put the fully diluted market cap at 21,000,000,000 * .35 = 7,350,000,000 USDT which seems reasonable to me given what ZIL promises.  At the very least, the coolest-looking Metaverse is being developed on Zilliqa, Metapolis.

Should the price appreciation go my way, my 10k ZIL worth 452 USDT now would appreciate to 3,500 USDT, plus however many ZIL I get from staking. I’m not saying this will happen, but it’s what I go through to make sure my investment size remains in line with my risk management strategies over time.

KAVA Craze

KAVA is a layer-one network built with the cosmos tools that promises to join the Ethereum and Cosmos blockchains into a single network. This technical merger is one way I believe we’ll get the ability to interact with Ethereum contracts within KEPLR. KAVA could allow Cosmos developers to create master wallets that allow for control over 75% of my 323 assets within a single interface. Staking included!  Or, it could flop!  So, I only own a few of these, just in case.

My KAVA has been staking in my Trust wallet – which, ironically, I no longer “trust.”  I’ve been moving things out of my Trust wallet for some time now with no real reason other than the Old CZ-lead Binance team made it, and I don’t really trust them.  KAVA is best in its home, on Cosmos, so I moved it onto the KAVA network and into one of my KEPLR wallets.  I staked KAVA there, and now it sits forever more until I unstake it to use or sell it.  The cost to move it was in KAVA and was nominal.

KAI 

This example is so bizarre!  

I went to the kardiachain website here http://www.kardiachain.io/buykai. It says stake with three easy steps, “buy kai,” “setup wallet,” and “stake in a pool.”

I set up the KAI wallet extension and moved my KAI there from Kucoin.  It cost only a few KAI to transfer, thankfully. I went to put the KAI into a pool and got sent into a web circle, clicking everywhere and just ending on that same page.

I decided to set up the ios wallet as it says I can stake it there.  Here’s an important note: I went to the kardiachain.io website on my iPhone and used their link to get to the proper wallet in the app store. Typically, I never search the app stores because impostor apps that look the same as the real ones hide out there. I learned if you start on coingecko.com, look up the coin and then click on their website just to be safe. If there’s no website or the website has an error, close it and don’t go farther. Just because a project is listed on CoinGecko.com doesn’t mean it’s trustworthy. 

As I continued down my KAI staking thread, I used my mnemonic seed phrase to load the same wallet into the ios app, and once it loaded, it loaded about 20 wallets.  Nineteen of those wallets were empty, and one had all my KAI in it.  After I finally got in, it was super simple to stake. Now all 6000 of my KAI are staked, worth a total of 6000 * 0.01189251 = 71.35506 USDT. This might not seem like much, but at a 9% APY,  I get about 40 KAI a month. Over time it should hopefully add up.

IF KAI takes off, the price appreciation will allow me to realize exponential growth.  Or it could fizzle and die off, leaving me with a wallet that is a little wonky and not worth ever reloading.

The cool thing is that I can delete the wallets from my devices and be sure things are safely staking until I want to interact with my KAI again.  I can then re-install and re-sync my wallet to view, claim, restake, or withdraw— whatever I need to do.  But I use several iDevices for this, so the KAI wallet lives on one of them, and I’m sure it will be included in my list of assets that get a reminder to re-stake.

FET Takes Forever

Fetch.ai is a whole ecosystem that accommodates many other apps and assets. I don’t fully understand it yet, but what caught me by surprise was learning that it was built with the Cosmos tool kit— so FET is a Cosmos blockchain!  That means that even though I could not get KEPLR to work there at first, it is compatible.

I looked into other wallets that supported FET from the fetch.ai website, and the Fetch native wallet came highly recommended. I installed it, and it was exactly the same as KEPLR, just watered down a little bit. I decided to poke around and see if I could get my FET to stake in KEPLR, so I wouldn’t need to track another wallet.

I went to the place where I stake FET in the Fetch native wallet, and rather than connecting with the fetch wallet, I tried connecting with KEPLR. Sure enough, it worked! KEPLR added the correct network information into my local KEPLR browser wallet and created a new FET blockchain wallet. I was able to then transfer my FET into KEPLR and stake right there, just like my ATOM, OSMO, JUNO, and the other cool Cosmos assets.

Though not all things made from Cosmos have turned to gold as Terra,  LUNA, and UST were also grown from the Cosmos toolsets.  In fact, both the classic Terra blockchain and the Terra 2.0 blockchain are both Cosmos blockchains.

You win some, and you lose some.

UBX

Some crypto assets are downright frustrating. For instance, UBX is stuck. It’s on Kucoin, and I want to stake it here https://ubikiri.com/, but Kucoin doesn’t support the UBX network yet. Instead, they force you to withdraw via the ETH network, which has a fee of 120,000 UBX. Since I only have 352,894, that would be ⅓ of my UBX to move it and then more to stake it. I just have to wait for Kucoin to support the UBX network or find another exchange that does, and I can arbitrage it over there. For now, I sit and wait for a staking path, which might take some time, leaving me to poke around every few weeks looking for the solution path.

ONT

Ontology is, well, I don’t really know yet, and that’s okay.  I made the decision to purchase this asset a long time ago, and all I care about is getting my investment staking now. At this moment, my portfolio manager tells me that my ONT appears to be in two different places. But there’s a problem. I can’t move it around unless I own ONG.  ONG is the Ontology gas token needed to move ONT around anywhere within the ONT network, similar to the VET / VTHO setup, I think.

I decided to move the ONT I owned from my Trust wallet to my Exodus wallet. To do so, I had to buy ONG on an exchange and transfer it to the trust wallet. I used that ONG as gas to move the small amount of ONT in Trust to Exodus. I then transferred all the remaining ONG to Exodus. That batch joined my existing ONT, and I staked it to receive a 21% reward in ONG—- I think.  Since this asset is safely staked and performing as it should, I believe I’m done for now.  So it goes on my follow-up list.  If it’s not staking on my first check back in a few weeks, then I’ll have to dig in deeper.

My Staking Goals

Sure, it’s impossible to stake everything, but I’ve taken on this massive undertaking with a project management mentality. This means I identify task types, establish tasks, and bang at them until there’s nothing more I can stake. 

To do so, I identified all the assets that are NOT already staked in my portfolio. Now, I’m going through each one and researching if it’s possible to stake them and where. Once I figure out the path for consolidation, I enter a several-step task into my task management system, and each day I check off as many tasks as I can get to.

My brain gets boggled sometimes with the complexities of doing one seemingly simple thing in the crypto world. But it’s a lot of fun and mentally rewarding once my assets are staked. This process is mostly passive— the ultimate “set it and forget it” strategy. Just remember that you really can’t completely forget it. In fact, tracking is key because you need to remember where you put your coins so you can access them with ease when you decide to liquidate.

So, a Bear market might be distressing for most investors, but there is no time to panic or slack off. Investors who are in it for the long haul know there is plenty to do. Smart people push through a bear market by using their time to research and grow and not just stare at the charts and hope for the best. 

Even though this crypto winter is proving to be exceptionally long and dreary, don’t just hibernate. You should get busy stacking assets to build quantities and staking them in safe locations. This is one way to pass the time during the dark days so you can emerge from the cave better off than when you went in.