Staking Your Way To The Bull Market Peak

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14 Aug 2024

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The Foremost Focus
The current bull market needs to be more kind regarding altcoins. However, as mentioned in “The Most Anticipated Altcoin Season”, much appreciation regarding altcoin gains occur within a matter of weeks, and usually at the tail end of a bull market. There have been isolated cases of altcoins rallying thousands of percent. However, there has yet to be much action in the blue chip sector thus far.
Proof-of-Stake protocols and passive income have been the predominant focus of my writings over the years. As a result, I have always advocated the accumulation of top-tier staking projects and up-and-coming micro-cap projects that could eventually fall into the category above and become powerful passive income generators. This is the foundational and predominant focus of my Crypto strategies.
As long as passive and semi-passive ideas and activities are working for you in the long run, you are on the right road. Whatever you dedicate your time, effort, and capital to must return the favor over time. This is why staking projects are an excellent option, provided the inflationary dynamic doesn’t eat away too much at the underlying token valuation. This was a recurring issue during the early days of PoS projects.
Maximizing Every Move
In a tough altcoin market, staking can provide additional income for further exposure and your longer-term stack. It’s a long-term passive income idea and a way to maximize gains in a currently restricted altcoin market. The Polkadot ecosystem is a great opportunity for staking protocols. Most parachains are Proof-of-Stake making them ideal for passive income.
Many parachains also offer rather significant staking rewards, often above 20%, which is excellent by comparison. If you hold a micro-cap project that goes on to increase significantly in value while offering an attractive APR, you are in the pound seats. This often happens, as many of these smaller projects are still in their infancy, and as a result, still very much in obscurity.
The risk is higher in such a scenario, as nobody knows the future. However, that’s where diversification comes in. Gaining exposure to blue chip and micro-cap staking projects is the way to go. Blue chips provide more stability and less risk while micro-caps can provide “moonshot” opportunities. Furthermore, staking rewards from blue chip projects can be deployed into the micro-cap sector.
This provides exposure to a riskier asset class without much risk. Passive income is essentially “free money” and utilizing it in such a manner can help more risk-averse investors gain access to the high-risk world of micro-caps without putting money on the line. It’s an idea worth exploring. This is another reason why noobs should take personal custody of their assets… they can earn yield by holding them.

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Final Thoughts
It’s important to note that I am addressing Proof-of-Stake projects, rather than staking opportunities. There’s a significant difference. Proof-of-Stake protocols enable owners to control their assets, as they are staked on-chain via the holder’s private keys. Staking opportunities, on the other hand, are more like lending services. Control over one’s keys is often surrendered with such opportunities.
True WEB3 and DeFi protocols are the preferred avenue. Always DYOR before participating in any yield-generating opportunity. Potential hacks and exploits should also be considered when analyzing a particular opportunity’s risk profile. Anyway, that’s it for this one. Catch you next time!

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Disclaimer
First of all, I am not a financial advisor. All information provided on this website is strictly my own opinion and not financial advice. I do make use of affiliate links. Purchasing or interacting with any third-party company could result in me receiving a commission. In some instances, utilizing an affiliate link can also result in a bonus or discount.
This article was first published on Sapphire Crypto.