The Simple Crypto Yielding Guide for New Yorkers
DIsclaimer: I am not a certified accountant, lawyer or financial advisor. Everything I write is for educational purposes. Before conducting on any of the information, please be sure to consult an expert.
The Cryptocurrency landscape has changed quite a bit since its humble origins since the invention of Bitcoin. The initial idea of having peer to peer transfer of assets with no middle men is an idea that has been already surpassed by leaps and bounds in this space. All people really could do is speculate on the value of crypto. Buy low and sell high was the core strategy anyone could do in this space. WIth the introduction of smart contracts in this space, we were able to get more opportunities that we haven’t had before. A major feature has been yielding. It started to become popular in the summer of 2020 which became known as “DEFI summer.” Unfortunately, there are some risks to using defi protocol; hacks, poor programming, malicious code and ect. During the bull run, it seemed as if Defi protocols were MT GOX one thousand times larger. Some people might be deterred from actually using these protocols. That shouldn’t deter you from entering this space to gain yield. So I decided to create a simple and easy guide to help anyone in the New York area to yield on their coins in this space.
Centralized Finance
So this one is a little tricky to discuss. One of the recurring themes you’ll hear in crypto is “Not your keys, Not your Crypto.” Philosophically, the premise of crypto is having the ability to control your own wealth instead of giving it to strangers. Especially with the recent bankruptcy of Celsius Network, many of these platforms ended up over leveraged and spiraled out of control. For this reason, you should not place all of your wealth on exchanges and institutions. However, during a bull run, when transaction fees can eat into your wealth, using centralized exchange for lending can be useful. For those in New York, there are only two sources available, Coinbase and Gemini.
Coinbase
Why are we starting with coinbase? On the account of having less options to yield with. You can only yield on three cryptocurrencies; USDC, DAI, and Algorand. At the moment of writing this. USDC and DAI only earn an APY% of 0.15%, similar to banks. YAWN!!!! Algorand yields 5.75% APY. If you like that crypto, go ahead with it. Maybe I need to do more research to find out if I like it. Time to move onto something with more meat and potatoes.
Gemini
Now it is time to discuss the better yielding Centralized Finance opportunities for New Yorkers, Gemini Earn. The premise of Gemini Earn is a lending program, retail investors place their cryptocurrencies into their Gemini Earn account, then Gemini lends your crypto to institutions such as Genesis Trading. This program is significantly better than what Coinbase is offering to New Yorkers. Recently Gemini added a new staking program but on centralized exchange staking is banned in New York. Nonetheless, there are some fairly decent yielding opportunities. Some of the opportunities that pop up include: Bitcoin, Litecoin, PaxG, Dogecoin, and ZEC which aren’t coins designed for yield. Then you have stablecoins which are intended to hold its value equal to $1 with coins such as DAI, GUSD, USDC with rates ranging between 5% APY to 8% APY. When you consider most “high yield” savings accounts offer at maximum of 2% APY and the banks which offer in the range 4% to 6% APY have an account cap on how much you can get yield on. Hell, the article I just linked was speaking about crypto lending platforms like Gemini Earn to get high yield interest.
Staking Solutions
This section will focus on getting yields through proof of stake. What is great about proof of Stake is the ability for people to use their own coin to validate transactions on the network. The one downside risk is if the validator you choose validates a bad transaction, you run the risk of being slashed. This means you can lose the coins you put up for stake. Most of the wallets I will be discussing are multi chain wallets with a focus on assets available for New Yorkers.
Atomic Wallet
Atomic Wallet is an easy app to suggest supporting a large selection of platforms. Not only can you use it for standard platforms such as Windows, MAC OS, Android and iOS, they also support Linux distros such as Ubuntu, Debian and Fedora. The Support the following Proof of Stake coins; ATOM, ALGO, XTZ, SOL and ADA. When I was first staking crypto, I started off with Atomic Wallet.
Exodus Wallet
This is another fantastic wallet and a good alternative to Atomic Wallet. They also have a youtube channel with some fairly decent educational information. It includes support for desktop, Mobile and Linux while supporting integration with Trezor if you ever want to place everything on a cold wallet. They also have an extension browser that provides support for defi apps. They currently support the following proof of stake assets; ATOM, ALGO, XTZ, SOL, ADA.
AirGap Wallet
Compared to the other two wallets, there is a smaller selection. However, it does support staking for Polkadot and Kusama. The other tokens are XTZ and Cosmos.
Guarda Wallet
There are some fantastic features about this wallet for staking. One feature I like about this is Ethereum Staking. Guarda Wallet provides their own Ethereum Staking Pools very similar to Lido. Some other additional assets include ADA, ATOM and XTZ.