HODLing means earning — 3 options to get yield from your BTC
No matter if we are at the bull market or prices fall, no matter it’s early adoption period or we’re approaching the cliff — digital currencies pay interest. It can be done by staking.
Bitcoin is based on Proof of Work, and cannot be staked directly. However, there are several options for you to earn passive income on your BTC and increase gains by managing your assets wisely.
Custodial or non-custodial wallet? What are the pros and cons? How to set it up and use it? Let’s skip through three crypto rewards companies or protocols that provide yields in BTC.
1. Celsius Network
Celsius is a blockchain-based platform that provides access to curated financial services. It allows to keep assets and earn rewards.
- 3,51% APY on BTC (US residents earn 6,20% APY on their FIRST 2 BTC. After that, earn at 3,51%)
- Paid weekly
- 625k+ users
PROS:
- no minimum balance required
- no max deposit caps
- You simply deposit funds using the mobile app and earning starts automatically
- an asset can be withdrawn at any time with no fees
- instant withdrawals up to $50k (depending on network load)
- platform token is not required (but gives higher yield)
CONS:
- custodial wallet — the private keys are held by a third party
- KYC required
- mobile app only
- country restrictions
2. Binance
Binance is an exchange that provides cryptocurrency trading for fintech and blockchain enthusiasts.
- 1,2% APY on BTC
- the interest amount is calculated and distributed daily
- Flexible Savings product subscriptions are closed during 23:50–00:10 (UTC) daily
- no interest is accumulated on products purchased on the day of subscription — interest is calculated the next day.
PROS:
- you can add or withdraw funds at any time
- desktop and mobile app
CONS:
- low APY
- funds are safe as long as exchange works properly
- withdrawals can be postponed any time — the private keys are held by a third party
- KYC required
- country restrictions
3. Stacks — with Hiro Wallet
Stacks makes Bitcoin programmable, enabling decentralized apps and smart contracts that inherit all of Bitcoin’s powers. You can earn BTC while Stacking STX tokens.
- approx. 10% APY on STX that gives you yield in BTC
PROS:
- non-custodial wallet — lets you be your own bank
- KYC is not required
- delegated STX tokens do not leave your wallet
- even if you don’t meet the minimum, you can still stack and earn Bitcoin by pooling with others
- STX makes BTC more valuable by enabling innovation on the network
CONS:
- You have to delegate your STX tokens to start earning — it’s necessary to commit to participation before a reward cycle begin
- the minimum amount of STX is required and set by the pool provider (the full list can be found here)-starts from 100STX
- tokens have to be locked up for a specified period
How do those platforms work?
The first two platforms (Celsius and Nexo) have institutional clients who would like to borrow BTC. In order to fill the borrowing demand, users can supply BTC to the platforms and earn returns for lending their assets.
The third option (Stacking) rewards Stacks (STX) token holders with Bitcoin for providing a valuable service to the network by locking up their tokens for a certain time.
Bitcoin is paid out in cycles of 2,100 Bitcoin blocks. During a cycle, all eligible stackers are expected to receive Bitcoin from miners. A cycle typically lasts for about 15 days but can be shorter or longer depending on the Bitcoin block time.
BTC rewards come from the BTC that STX Miners forward to the network in hopes of earning the right to mine a new block.
All of these options are attractive for many reasons but in my opinion, Stacking is the most interesting. Why? Because it brings a kind of win-win situation I have mentioned in the previous article. Stacking gives the highest yield and provides safety. Your keys — your assets. Some might say that options 1 and 2 are easier to set up. Not really. If you want to learn how to start check my video tutorials.
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
