Staking vs Lending vs Holding: what crypto assets allow to earn more? - The Cryptonomist

Staking vs Lending vs Holding, which crypto assets generated more profits over the past year?

There are several factors to take into account and several cryptocurrencies that offer different advantages depending on the protocol: for instance, it is possible to do lending with bitcoin (BTC), direct or through a representation of the same, but it is not possible to do staking since its blockchain does not provide this function.

Having said that, it is fair to ask which of the three methods, staking, lending and holding, has been the most profitable.

To make an approximate calculation we will take some crypto assets (calculating the value at the date of December 9th, 2018), some platforms, and we will take as a reference point the figure of $1000 in a time frame of 365 days, so the final result will consist in quantifying in one year the profits generated.

Staking

Let’s start with staking and take the Binance platform as the reference point because it offers a simple system with which it is possible to diversify by investing in various assets.

We must therefore consider:

• The value of the % that is given by the average of the annual estimate reported by Binance;

• To know the value of the interest alone we must multiply the number of tokens collected by the current value of the cryptocurrency;

• The number of invested tokens that is calculated by dividing $1000 by the value of the crypto at the date of December 9th, 2018.

The asset that has proved to be more interesting both in terms of interest rate and price, is Tezos (XTZ) which has multiplied by x4 the initial investment.

Lending

In the lending part, we will include the one performed for example on platforms such as Binance or the system created using the Compound protocol, which is perhaps the most widespread. 

In this case, as well, we will take some assets as a reference and their value at the date of December 9th, 2018 and again an investment of $1000.

Let’s consider:

• For the lending on Binance (USDT, BNB and BTC) we will take the rate that we find on the platform;

• For the lending of the other cryptocurrencies, we will take the rate offered by Compound at the date of December 9th, 2019, but we will not calculate DAI because it has evolved and would be disadvantaged in this ranking.

In this case, we see that for a number of factors the investment that brought an x3 was the Binance Coin (BNB) that surpassed even bitcoin (BTC).

Holding

For holding, the calculation is easier since it is necessary to consider, for the same investment, which crypto brought the highest gain by holding it for one year, hence an initial investment of $1000 for 365 days.

As was to be expected, bitcoin (BTC) confirmed itself as the asset par excellence for holding and therefore a store of value, followed shortly after by Bitcoin Cash (BCH), which proved to have doubled the initial investment, while Ripple (XRP) recorded a net loss, proving to be a very bad investment.

Conclusions

Analysing some of the most famous and popular crypto assets and selected services, we can see that each system is winning when focusing on the right asset, Tezos (XTZ) for staking, Binance (BNB) for lending and Bitcoin (BTC) for holding.