Staking: A New Way of Understanding the Protocol
Hold to Earn
If you are reading this, then chances are you are a crypto investor, and if you are a crypto investor, chances are you have tried out staking before.
This protocol has been the crypto holder’s way of earning interest from their assets for years now, and no one doubts its usefulness.
Being capable of earning extra rewards simply by staking a certain coin made cryptocurrencies able to have regular interests, which normally banks and other financial institutions always denied for them, in favor of fiat money or other traditional assets.
Being capable of earning extra rewards simply just by staking a certain coin, has given cryptocurrencies the same ability, in regards to interest, as traditional financial institutions, which until recently have been kept only to the domain of fiat currencies.
Not only did Staking allow holders to earn interest where financial institutions didn’t, but it also did so in a decentralized way; now you are the owner of your coins, while still offering them as leverage.
Stake DeFi, Stake Smart
The above process is known as Defi Staking; lending your coins to the blockchain in order to become a ‘validator’, while still keeping full possession of them.
One of the advantages that come with DeFi systems is that you don’t depend on centralized institutions to keep your interest rates or your money safe. Because DeFi works using smart contracts which no one can change the rules of, it’s completely secure and thus you can predict what is gonna be your interest rate.
Sadly, DeFi is a double-edged sword, because anyone, no matter who they are or their reputation, can write a smart contract and launch their own protocol on the internet.
Because of this, in recent times the market has seen itself flooded by staking protocols and pools which have nothing new to offer; Always the same APYs for the same coins, with some even having malicious intentions.
One such example of this can be LUNA-UST and their recent crash; While the infamous Terra ecosystem death spiral was happening, some DeFi protocols were offering as much as 20% APY for the currencies.
Without any kind of backing for these astronomical numbers, staking of these assets became completely speculative and unfunded, one of the reasons that lead to their current debacle. If it’s too good to be true, it most likely is.
XHT: The revolution
I know that this news of bad actors may have made you lose faith, and I don’t blame you; speculative and copycat contracts are everywhere nowadays.
But, what if I told you that there’s one staking protocol different from any other you ever heard about, a protocol that’s part of an active crypto ecosystem where you can see the rewards’ source, and on top of all, is DeFi!
XHT staking is nothing like its above-mentioned counterpart; While traditional staking offers a fixed APY which many contracts then fail to follow through on, XHT staking offers realistic rewards, as it is based on the activity of a shared liquidity pool for all users of the HollaEx; an open-source, white-label exchange development tool, of which XHT is the native coin.
This pool, called the HollaEx network, serves as a common liquidity provider for everyone looking to build their own exchange using the HollaEx Kit.
But, where does the network get the profits distributed to stakers? Easy; trading fees and listing donations.
Trading fees are pretty self-explanatory; if you use the HollaEx network for liquidity purposes, you get charged a small trading fee.
Listing donations are the prices operators must pay to list a new coin in the network. These two income sources are then distributed between all stakers.
Having this system to back up rewards means that XHT staking will never give more than it has available, and makes rewards grow as the HollaEx ecosystem scales up.
Thanks to this, XHT distribution gives out actually tangible, trustworthy rewards, coming from real sources, setting it apart from those risky, speculative protocols that offer more than they can consistently give out.
As you are able to see, staking is a complicated system, with many aspects to it. Some protocols have proved themselves useful, while others have failed to keep up with their unrealistic promises.
In this sea of uncertainty, it’s good to have projects like XHT, that offer clear, transparent, and real rewards.
Unfortunately, we’re at the end of this article. You can obtain XHT rewards by signing up to HollaEx Pro, learn how here. You can also learn more about DeFi and XHT staking in HollaEx’s documentation.
Also, if you have any questions, the Discord channel is always a good place to ask them.