Is Staking worth it? - Crypto in Plain English - Episode 230 - by cryptohunt.it

Is Staking worth it?

Welcome to the Cryptohunt Jam, where we spend one minute a day to explain crypto. In plain English.

You’ve probably heard this question from friends: Should I stake crypto?

We’ve talked about what staking is previously, but just as a reminder: It’s like depositing crypto in a savings account and getting paid interest.

So, your crypto works for you, and you have to do nothing? Sounds great then, right? Well, let’s talk about the risks.

First, you have to understand that you stake crypto. And that’s quite different from putting cash into a savings account. As the crypto market moves up and down, your staked crypto may lose significant value, negating any interest you may earn.

Now, you may say: Why not just stake stablecoins? But even that is risky, because they may not actually be as stable as they promise, and stories of people losing life savings in staked stablecoins that collapsed are cautionary tales you’ll find all over the internet.

And then there is another risk: You deposit your staked crypto with a third party. If they go under, so goes your money. If they get hacked: Poof, the same. And this is not just hypothetical, these stories hit the news almost every day now.

In addition, the interest you earn may not be worth the risk. Compare it to interest on your savings account or government bonds: If the staking interest is very low, it may not offset the risks of owning volatile crypto. If the number is to high, something fishy may be going on.

And lastly, consider that interest is almost never paid in actual cash. Most staking protocols pay you back in crypto, and the crypto you get may become worthless quickly.

There you have it: Staking is riskier than it seems. Is it worth it? You decide – as always – but make sure you do your research thoroughly.

Disclaimer: This podcast references our opinion and is for information purposes only. It is not intended to be investment advice. Do your own research and seek a duly licensed professional for investment advice.