Crypto Academy / Season 3 / Week 1 - Homework Post for @imagen (Staking)

Today I will try to join professor @imagen class about Staking. This is a very interesting class. ok i will try to solve some questions from homework this week.

Staking is a term when someone invests their crypto assets in a network with the hope of profiting from the passive income generated from the staking process. at this time there are many platforms that have provided the staking feature, here I will try to compare the 2 platforms that provide the stake feature

ok i will try to compare 2 platforms that provide staking services, namely coinbase and kraken.

Coinbase is an exchange platform that has appeared in 2012. Coinbase is one of the popular exchange platforms that provides staking services, while this platform is very popular because it has several advantages including a high level of security in terms of storing your chosen cryptocurrency assets. besides that coinbase also has transaction fees of 1.39% to 1.49%, these fees can be said to be expensive when compared to other platforms but with a fairly good level of security this platform is still quite popular and reliable.

Coinbase has also provided several cryptocurrency assets that can be staked here is the list: Ethereum (5.00% APR), Algorand (4.00% APY), Cosmos (5.00% APY), Tezos (4.63% APY) Dai (2.00% APY), USD Coins (0.15% APY). For more details, let's look at the screenshot below.

Kraken is an exchange platform that has emerged in 2011. Kraken is one of the popular exchange platforms that provides staking services, this platform has provided many cryptocurrency assets that can be staked. Kraken also has a very high level of security in storing your assets. The transaction process is also quite fast. Kraken transaction fees are also quite cheap, around 0.16% to 0.26%. With several advantages, this platform has become quite famous until now.

Kraken also provides several cryptocurrency assets that can be staked, the following is a list of cryptocurrencies and their annual reward percentages: Polkadot (12.00% APY), Kusama (12.00% APY), Cardano (4.00-6.00% APY), Flow (4.00-6.00% APY) , Ethereum (5.00-7.00% APY), Solana (6.50% APY), Cosmos (7.00% APY), Tezos (5.50% APY), Kava (20.00% APY), Euro (1.50% APY), US Dollar (2.00% APY), Bitcoin (0.25% APY). For more details, let's look at the screenshot below.

looking at some of the comparisons above, I prefer Kraken over coinbase for several reasons including:

1. Of the number of cryptocurrency assets that can be staked, of course, Kraken is superior by supporting 12 cryptocurrencies that can be staked while on Coinbase only 6 cryptocurrencies.

2. From annual reward percentage (APY) Kraken offers higher rewards compared to coinbase.

3. From kraken transaction fees are cheaper than coinbase.

As we all know the price of a cryptocurrency asset often experiences price fluctuations almost every time, this is what affects the profits and losses of a user when betting their assets. so it can be said impermanent loss occurs when the asset they are betting on is in a phase below it often happens, when a crypto asset holder bets their crypto asset of course he wants to get a profit but because cryptocurrency is fluctuating then of course he will feel the phase impermanent loss.

Impermanent loss can be said to be only temporary, this can be an advantage when the price of an asset increases again. This is due to market volatility. so for a trader, he certainly has a separate strategy to deal with this phase, whether he has to wait to get a profit or he has to stop betting to minimize losses.

To minimize impermanent loss, stablecoins are the right choice. because as we know impermanent loss occurs due to fluctuations in the price of cryptocurrency assets. whereas stablecoins have less volatile prices. There are various kinds of stablecoins that you can choose from such as Tether (USDT), USD Coin (USDC), and DAI. let's look at the graph of one of these coins.

From the graphic example of one of the stablecoins above, we can see that from the last few years until now the coin has not experienced large fluctuations and can be said to be quite stable.

Delegated Proof of Stake (DPoS) is one of the consensus algorithms. so it can be said that the working principle is almost the same as the Proof of Stake working mechanism, only it involves direct delegation. a delegate will benefit directly from the transaction fees incurred by users who stake a block.

In DPoS the delegates have the right to make decisions in reaching a consensus. these are all forms of development of PoS to achieve better and more organized decisions. and asset owners also have an important influence in selecting delagators to validate data. here the prospective delagator proposes to become a delagator by giving a presentation to validate a data and security on the network. so it can be said that the asset owner has a big influence in choosing the delagator through voting.

Delegated Proof Of Stake works by ensuring a node is running well before data is validated. so that when the data has been validated on a system that is on the network, all data has been verified properly. so it can be said that the effectiveness of work on DPoS is very good and efficient. the point is that the success of a consensus on DPoS is highly dependent on the delagator.

Although the working principle is almost the same, here are some innovations that are the advantages of DPoS over PoS: