Topic: Passive Income From Staking Stablecoins? (Read 161 times)

But if someone had a million dollars, what is the risk of putting everything into gemini then?  They seem to be the most trusted out of all the other places like nexo, blockfi etc?  They offer 8%.  I heard the main concern would be if genesis goes broke but if something like that happens, then everything would collapse right?


The other issue is what about your account security such as hacking?  And I do not mean gemini getting hacked.  I mean on your end.  How would you protect yourself from hacks?  But if gemini got hacked, would any GUSD you have in your account safe or not?  I heard its FDIC insured up to a quarter million dollars I believe but this is only on fiat balance on gemini right but also it has to be a hack on gemini end?

These kind of high returns are the exact reason that raises suspicions on those stable coins. Guaranteed 8-10% annual returns on USD is just too good to be true. You can get that kind of returns only by lending money to the bankrupt countries like Argentina. If they give you these returns, that's what you are dealing with. Very, very high risk. I wouldn't touch these.

If someone is able to get one million dollars in savings then it is to be expected they have better ways to invest their money than staking their stable coins and obtain profits that low, I understand the logic of the one that started this thread but it is better for anyone that has that amount of money to just invest in bitcoin over the long term, as the profits will be better than that and you are not risking our coins in a weird smart contract that could be hacked at any moment.

You can stake it on exchanges or DeFi platforms.

Example: Binance DeFi Staking Launches BUSD High-Yield Activity with Up to 13.33% APY. I don't shill Binance, it's just an example. You can find similar staking offers on other exchanges.

You can stake stablecoins to receive altcoins in rewward. It's your choice to pick one that is safest for your portfolio in long run.

Many people do just that, but at the same time you need to remember that you cannot transfer all your money from the bank by placing it on staking, since at one moment you can lose all your savings. And there may be different reasons, such as the blocking of the stablecoin by the issuer or the usual hacking.

I don't know much about those other strange stablecoins that could give you a very high percentage.  I am mainly talking about the main ones like usdc/usdt/gusd.  I heard people stake a lot on usdc or usdt on blockfi/nexo etc.  I also heard of gemini where they have gusd.  So if you were to stake any of these coins in those top sites like blockfi or nexo or gemini, wouldn't that generally be safe?



Because say with on the low end, gemini you get 8%.  If someone has a million dollars, that is 80,000 dollars a year consistently if you just leave the money there an entire year.  Now say you want to withdraw money, I believe you can convert the gusd to usd anytime on gemini and withdraw.  So imagine someone wires a million dollars to gemini.  Convert it all to gusd.  Now say after a month, they want to withdraw all their money.  Well they would have earned 80000/12 months = 6667 gusd.  So their balance is about 1,006,667 gusd.  Now they convert it to usd.  They have 1,006,667 usd now.  They withdraw the money to their bank account.  So how is this not good?



Now if its nexo and you earn 10% on usdt/usdc.  You do the same situation above for a month.  You earn 8,000 usdt/usdc.  These coins are ETH I believe so you pay a little fee extra with it.  But you going to earn around 8,000 usd a month if you have a million dollars correct? 

I would rather invest on coins like BTC instead of stablecoins. Not fan of it, maybe use it to hedge and stop some bleeding if the market is in red, but to totally invest on them like thru staking? I wouldn't take that risk, as I have said, BTC or any other solid altcoins might do it for me. And if I have a lot of money, I wouldn't go will crypto maybe I will have to diversify like educational saving for my kids or stocks and others.

It sounds easy when said like that. But have you ever thought about or imagine what you would really do if all that money is in your hands? For real.
In my case, I won't go crypto.
I'll try to secure everything first for my kids. I have a house which is not paid fully, but I do want a business that would make me passive money and not in crypto just yet.
There are other things you could invest with and it'd be better if you can see it and try to grow it.
You can put some in crypto but it should never be all. Better would be a fall back and where your wife and family will be happy too.

I was once with DODO a BSC project, I was getting up to 20% APY at a time while providing liquidity in 2 stablecoins but was been paid in DODO and not in a stablecoin, you know, you really have nothing to loose because it's just like keeping your stablecoins in your hot wallet. Dodo will either rise or keep falling, site can be attack by hackers, I didn't read their insurance policy if they had any. I have since use the USDT for other trades.

U can get 12% on Polkadot staking @ Kraken 

That see too god to be true though. I have the same excitement when I learn I can stake coins and make profit thru it. I thought its an easy money every month.  You'll find out soon if you pick a token that its value continously depreciates within 4 years. 4 years of expecting 40k  year will crumble. Not all altcoins will go up or even at bull market.

Buying at the rght time and price is going to be the best way to make money with such coins that you dont have to spend $250k to get a big amount of the coins you want to stake.

Good luck with yolo all your net worth equal 1 mln $ (the case OP is talking about) into shitcoin only because it claims to yell high apy (which in fact in 99% cases is made via inflation of existing coins). Legit projects APY is max 10% and its nothing compared to daily volatility. Thats the easiest way of losing all your money.

20 % in value stocks (high dividend, low debt, good P/E and P/BV)
30% in gold
20% in crypto
10% in reits
20% in bonds

thats how diversified you should be while investing 1 mln$ from OP.

But here is the cache, different slabs have different APY rates so more the coins the value will be lesser so you only will be receiving 10% for 10K and remaining only receive 5 or 6% but if you take the inflation rate into consideration for that let's assume 5% so you will be only making 1% which js not really worth for the risk. Even if you have huge bank balance try investing them on to something else will be a smart decision.

You forgot to include the possibiity of the stabelcoin getting hacked or the devs behind it  simply perform an exit scaam (which is not that uncommon in this field), so i still think people will still opt for the banks interest even if it's lower but it remains somehow safe.

Also: investing your entire capital into one smart contract is not a very smart thing to do.

Once you make a million dollars, you definitely don't want to hoard it even in the most reliable smart contracts. I'd rather invest. If you invest in a pool on a uniswap or 1 inch, then the yield there is below 10%, and it is dangerous to invest in centralized services or unknown projects. A lot of DeFi projects are losing money from hacker attacks.
https://bitcointalksearch.org/topic/defi-hacks-history-5267124

There are many different inflations: Monetary inflation, CPI - consumer price index, PPI - Producer Price index and many more. None of them is described by situation in which wages stay the same.

But back OP

If you have 1 mln $ and you put everything in non popular stablecoins and lock it in a strange smart contract (most popular one - pancake pays 1-5% not 10-12%) you are exposed with all your wealth to exit scam of stable coin, failure of smart contract (including hacks). Is it worth 8% annually. In my opinion its not.


When you have 1 mln $ you buy a nice house, car, you pay for children's studies and you are left with 200k$. You are wealthy but not rich


Yes. Your 1 mln $ is worth 8% less each year so after a year of staking you have 1.08 mln $ but have similar purchasing power to 1 mln $ year ago.

Seems you can get anywhere between 8-10% staking stablecoins.  I think some sites even offer as high as 12%.  Now even if you take the lower end of it at 8%... if someone had 250k, that would be 20k a year which is nothing to sneeze at.  But if you are in a western country like the US or Canada, that isn't enough to pay off your living expenses unless you rent a very cheap place.  That would be more than enough in other countries around the world.  If you have 500k, that would be 40k a year which is a bit less than the average income of someone in the US I believe.  You can clearly support yourself on that in many parts of a western country.  If you have a million dollars, that is 80k a year, which is more than above average income in a western country.  I am aware of inflation being an all time high.  But if inflation keeps going this high, then earning 8% isn't even doing much besides barely beating it?



I am aware inflation means prices go up but wages stay the same.  But if you had a lot of money and could stake stablecoins.. wouldn't that be the wise thing to do as it is passive income?  Seems like a much better idea for someone with that type of money to stake it as oppose to buy a house for rental or a business?  Yes the rates can and will drop.  



If someone has a million dollars in the bank, why not put everything into stablecoins and get 8% or 80k a year?  Let say they still have an extra 50k for their everything else expenses.  But of course they could always unstake or unlend the the stablecoin and now they have money and could withdraw to their bank account.  Because if someone had a million dollars, 80k a year is more than enough to live off in any western first world country.  I heard people say in western countries, you need million dollars isn't rich and you need at least 2 million dollars at least to be considered rich.  But my thought is if someone has a million dollars and put it into stablecoin, they going to earn 80k a year minimum and not concern about any fluctuations.  If someone spent a million dollars buying an altcoin and staking/lending it... well sure they will make money staking/lending but if the coin drops in price, they lose money.  Why do most people not do this?  Seems like if a person has lot of money, that is the way to go?