Wed, 11/30/2022 - 00:00
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Contents
- Cardano staking highlights
- But this is not only reason Cardano stands out
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Attention surrounding Cardano (ADA) remains high. With the crash of Solana (SOL), it became the main competitor of Ethereum (ETH) by market capitalization.
Undoubtedly, one of the great benefits of the smart contracts platform is its staking.
Although rival ETH networks present this modality to their investors, Cardano has key points that make it one of the best staking options on the crypto market.
Cardano staking highlights
Indeed, a great positive point for Cardano is that it does not lock your cryptocurrencies in staking. Other blockchains that work with proof of stake require a minimum number of cryptocurrencies to be blocked.
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Since you cannot spend your cryptocurrencies or trade them for profit, you are rewarded with more altcoin units. This movement helps the price of the cryptocurrency to remain more stable because, with fewer units in circulation, if demand increases, the price of the cryptocurrency tends to rise.
While this seems like an effective way to help the development of a particular cryptocurrency, the bear market factor needs to be considered. If you invest in a cryptocurrency at a time when it is less volatile, the value of your financial contribution could change over time.
Unpredictable situations may occur. For example, tensions between countries, a pandemic and high interest rates from central banks are a few examples. In these events, just staking cannot handle the volatility of a cryptocurrency.
Therefore, if your funds are locked, they may suffer unexpected drops. However, if you can withdraw these amounts and trade, your losses can be avoided and, with a good strategy, you may even make profits.
Cardano investors, thus, have no reason to complain about staking. By staking ADA, your cryptos have free liquidity, where tokens can be redeemed at any time.
But this is not only reason Cardano stands out
The buyback time for the coins you leave in staking is also excellent. In just five days you already receive the values referring to the amount saved. However, it is worth mentioning that when depositing ADA for staking, you need to wait between 15 and 20 days to start earning your rewards.
Regarding the custody of your cryptos, it always stays with you. A staking pool cannot control the assets you own. Therefore, the choice of what to do with your ADAs, whether to keep or redeem them, is always yours.
Those qualities give Cardano around 25 billion ADAs in staking. Given that the number of tokens in circulation is 35 billion, the number in blocked assets is a sign of ADA's staking strength compared to its competitors.
As a seasoned cryptocurrency enthusiast and expert in blockchain technologies, I've closely followed the developments in the field, including the rise of various blockchain projects and their unique features. My depth of knowledge extends to the specifics of staking mechanisms, smart contracts, and the intricacies of different blockchain platforms.
Now, let's delve into the concepts presented in the article about Cardano (ADA) staking:
Cardano Staking Highlights:
1. Staking Liquidity:
- Unlike some proof-of-stake blockchains that require users to lock a minimum amount of cryptocurrencies, Cardano stands out by not locking your cryptocurrencies in staking.
- The absence of a minimum lock-in allows for greater flexibility. Cardano investors can still spend, trade, or withdraw their cryptocurrencies at any time.
2. Stability Through Limited Circulation:
- Staking on Cardano contributes to the stability of the cryptocurrency. By reducing the number of units in circulation, the price tends to be more stable.
- In times of increased demand, the limited circulation can lead to a rise in the cryptocurrency's price.
3. Consideration for Bear Market Factors:
- The article wisely points out the potential risks during bear markets. While staking can be effective during less volatile times, unforeseen events like geopolitical tensions, pandemics, or central bank decisions can impact the market significantly.
4. Quick Buyback Time:
- Cardano offers a quick buyback time for staked coins. In just five days, investors receive the values corresponding to the amount saved.
- However, there's an initial waiting period of 15 to 20 days when depositing ADA for staking before earning rewards.
5. User Custody and Control:
- Cardano emphasizes user control and custody of their cryptocurrencies. Staking pools do not control the assets, giving investors the freedom to decide whether to keep or redeem their ADAs.
6. Staking Strength:
- Cardano boasts around 25 billion ADAs in staking out of the 35 billion tokens in circulation. This significant number in blocked assets reflects the strength of Cardano's staking compared to its competitors.
In conclusion, Cardano's approach to staking, emphasizing liquidity, stability, quick buyback times, and user control, has positioned it as a noteworthy competitor in the cryptocurrency market, particularly as a rival to Ethereum. The article effectively highlights these features, contributing to the ongoing discourse on the strengths and weaknesses of different blockchain ecosystems.
