Have your cake and eat it - it’s how Stacking works
We call ourselves a genius in a bull market. At the time of price growth, it’s hard to make a bad investment. Many people think it will last forever and many people know it’s not true. But not so many know how to protect their profits.
Is there any chance for a win-win situation while trading? Usually not. But one is really close and we call it Stacking. While other options like “staking” in crypto (Tezos, ETH, etc.) give you yield in its own native coin, “Stacking” STX gives you yield in BTC.
Let’s take a closer look at a price chart. It has changed a lot in the last few months but April brought a huge boom.
Imagine you have 1000 STX and you lock it for 12 cycles which means you get 10% APY. Does it mean you get 100$ in BTC in a year? Not really. Because prices of both assets are changing. So… what are the scenarios?
1. The price of STX goes up and the price of BTC stays at the same level
STX 2$ →3$
BTC = 60.000$
If the price of STX is growing, the value of reward in BTC is bigger. You own 1000 STX and the price of a single token grows from 2$ to 3$. The value of your STX tokens changed from 2000$ to 3000$. Now you earn 300$ (0.005 BTC) annually instead of 200$ (0.0033 BTC). It happens as long as the BTC price does not change.
2. The price of STX goes up and the price of BTC goes down
STX 2$ →3$
BTC 60.000$ →55.000$
In this scenario price of a single STX token also grows from 2$ to 3$ but the BTC price drops by 5.000$. If you own 1000 STX it values changed from 2000$ to 3000$ so you earn 0.005 BTC and it’s worth 275$ (instead of 300$).
3. The price of STX goes up and the price of BTC goes up
STX 2$ →3$
BTC 60.000$ →65.000$
In this scenario price of a single STX token also grows from 2$ to 3$ and the BTC price goes up by 5.000$. If you own 1000 STX it values changed from 2000$ to 3000$ so you earn 0.005 BTC and it’s worth 325$ (instead of 300$).
4. The price of STX remains the same and the price of BTC goes up
STX =2$
BTC 60.000$ →65.000$
Your 1000 STX is worth 2000$ so with 10% APY you get 0.0033 BTC which is worth 215$ (instead of 200$ if the BTC price remained on the same level).
5. The price of STX remains the same and the price of BTC goes down
STX =2$
BTC 60.000$ →55.000$
Your 1000 STX is worth 2000$ so with 10% APY you get 0.0033 BTC which is worth 181$ (instead of 200$ if the BTC price remained on the same level).
6. The price of STX goes down and the price of BTC goes down
STX 2$ → 1$
BTC 60.000$ →55.000$
Your 1000 STX is worth 1000$ so with 10% APY you get 0.00165 BTC which is worth 90$ (instead of 99$ if the BTC price remained on the same level).
7. The price of STX goes down and the price of BTC stays at the same level
STX 2$ → 1$
BTC 60.000$
Your 1000 STX is worth 1000$ so with 10% APY you get 0.00165 BTC which is worth 99$.
8. The price of STX goes down and the price of BTC goes up
STX 2$ → 1$
BTC 60.000$ → 65.000$
Your 1000 STX is worth 1000$ so with 10% APY you get 0.00165 BTC which is worth 107$ (instead of 99$ if the BTC price remained on the same level).
If you want to become a STX hodler, I’d recommend joining Freehold, its a community of hodlers like me working to educate others on this technology.
Join us at https://joinfreehold.com/
==Marek
