Making use of staking options on exchanges
People who have plans to hold cryptocurrencies for a longer period of time should definitely have plans to keep them safe. Exchanges are not the best place to keep cryptocurrencies safe. But for some cryptocurrencies, it can be a good option to keep them on exchanges. The reason is that if our plan is to hold them only for a shorter period of time, then we can just keep them on exchanges because moving to the blockchain can cost us transaction fees and for some coins like Polkadot, the transaction charges can be heavy.
If the plan is to hold them for a longer period of time and if we are okay to hold them on exchanges themselves, it is good to make use of the staking options. I understand that it is a centralized thing and a huge risk is involved in having the funds on the exchanges. But if we are okay with ignoring such risks, it is okay to keep the funds in the exchanges but keep them in an earning plan. Binance offers some earning facilities for some of the coins. Most of the earning options are in line with the staking rewards usually provided on the chain.
There are some exchanges that exclusively offer better deals for staking. If we are able to stake the coins and earn from them, we are not only saving up on the transaction fees but at the same time, the funds are also not sitting idle in the form of a coin. Polkadot is one of the coins that had a decent pump during the bull market recently and is not so great in the current market. I would have regretted investing in that coin. But I did not keep it idle. I used the staking option that was there on the exchange and I was able to make it up. I do have the patience to wait for the next bull run and book my profits.
I personally use Binance Earn for my staking rewards on exchanges. So far it has been good and I did not have any big issues. They say exchanges are not good but I'm not anyways having any huge money on exchanges and I wouldn't care much even if it gets lost. But I do monitor them regularly to make sure they don't suddenly disappear one fine day. Even though I might say that I don't care if it disappears, it is definitely not good if it disappears.
The APR on staking rewards is usually based on the locking period. There are some staking rewards where if you lock them for 120 days, they give better APR, and other things that give standard APR if we lock the funds for 30 days minimum. Another interesting thing is the flexible staking. This means the income will keep generating and at the same time, it gives freedom for us to take our funds out at any time. The interests are generated and shared once a day.
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