They have been promoting a "one-two punch" of high returns and low risk to attract users. For those who tried Staking last year, are they currently making a profit or a loss when calculated in fiat currency?
Last year at this time, Staking was all the rage, attracting many players into the game. Over the past year, with more and more PoS blockchains going online, the Staking market is becoming increasingly vast. Some voices in the market even believe that this year could be a breakout year for Staking.
Unlike the high entry barriers for assets in the PoW mining market, Staking is seen as a "new blue ocean" by mining pools, node service providers, wallets, etc., and it is also an excellent opportunity to share mining rewards. They have been promoting a "combination punch" of high returns and low risks to attract users. So, for users who dabbled in Staking last year, are they making profits or losses when calculated in fiat currency?
According to statistics from Staking Rewards, as of March 3rd, there are a total of 85 assets open for Staking, with a total market value of $15.07 billion and a total staked token amount of $9.62 billion. The average annualized return in coin terms is approximately 13.78%, with a median of 8.03%.
PAData's statistics in July 2019 showed a median return of about 7.03%, while in April 2019, when Staking was just emerging, the median return was about 10.05%. The current average coin-based annualized return in the market is still lower than when Staking first appeared, but it has risen compared to six months ago.
Among them, the highest earning assets COTI, SNX, CSDT, LPT, ENQ, and PRV have coin-based annualized returns of over 50%, while the lowest earners LSK, ARDR, and EDG have coin-based annualized returns of less than 1%. It is evident that Staking returns vary across different assets. In addition, well-known public chains like NEO, VET, and XLM have coin-based annualized returns of no more than 2%, while TRX and EOS have returns of only 3.73% and 3.10%, respectively.
Li Chen, CEO of HashQuark, a PoS mining pool under Hong Kong's HashKey Group, stated in an interview with PANews that both excessively high and low returns may pose issues. From observation, assets with particularly high returns tend to be smaller coins, while well-established, long-running, and highly recognized public chains generally have returns lower than the average level.
Unlike the fluctuation in returns, the current average staking rate is lower than when it first emerged and lower than six months ago. The overall average staking rate in the market is approximately 39.74%, with a median of 37.45%. In comparison, the median staking rate on July 25, 2019, was about 42.36%, and on April 4, 2019, it was around 46%.
NRG, WAXP, KAVA, SNX, and USDN are the top 5 assets with the highest staking rates, all exceeding 80%. Assets like ATOM and ALGO, which are highly anticipated, also have relatively high staking rates, with rates exceeding 72% and 60%, respectively. On the other hand, XZC, SMART, WABI, EDG, and COTI have the lowest staking rates, all below 10%.
According to the formula Staking Expected Annual Return ≈ Inflation Rate / Staking Rate, returns are closely related to the staking rate. Therefore, for investors, it is crucial to observe the daily staking rate.
Moreover, out of the 85 assets, only 11 assets have decreased (or remained unchanged) their circulating supply share through Staking while considering the inflation rate. The remaining 74 assets have increased the holders' share of the circulating supply through Staking, with an average adjusted return of approximately 8.86%.
The total value of staked tokens for the most valuable asset in the market, EOS, is about $2.049 billion, followed by XTZ at $1.831 billion, which once surpassed EOS to become the top asset in terms of staked token market value. The staked token market values of these two assets already exceed one-third of the total staking market value. Additionally, the staked token market values of ATOM, DASH, TRX, XEM, SNX, and DCR all exceed $100 million.
What are the fiat-based annualized returns of these most popular Staking assets in the market? Have users who tried Staking last year made profits?
PAData calculated the fiat annual returns of the top 15 assets by Staking total value by converting their coin-based expected annual returns, combining them with the coin prices from a year ago (using the opening price on March 1, 2019, or the earliest available if the asset was listed after that date) and the current coin prices (using the closing price on March 3, 2020).
According to the statistics, SNX has the highest expected fiat-based annual return among the 15 assets, reaching 2195%, followed by XTZ at 612%, and VSYS at 72%. The expected returns of other positively earning assets are around 10%-30%. On the other hand, TRX, ATOM, WAVES, LUNA, and ALGO have negative expected returns, with ALGO and LUNA showing losses of around 80%. Excluding the extreme impact of SNX, the average expected fiat-based annual return for the 14 assets is approximately 37.32%.
In essence, as an investment method, Staking can only change the quantity of holdings, and even with the compounding of coin-based income from Staking, its impact is relatively small. The coin price remains the most crucial factor affecting mining, whether it is PoW mining or PoS mining.
For assets like SNX with the highest holding income at 1274.82% and a coin-based return of 66.97%, both dimensions show positive performance, significantly enhancing the gains through Staking. Similar cases can be seen with DASH, DCR, KAVA, VSYS, XEM, and XTZ, among others.
On the other hand, for assets with negative holding income, indicating a downward trend in coin price throughout the year, the expected fiat-based returns of Staking are also negative, with significant losses. This means that Staking can only play a very limited role in reducing losses. For example, LUNA, with a holding income of -85.88%, even with a 10.41% coin-based benefit from Staking, still results in an overall fiat-based loss of -84.41%. Similar situations can be observed with ATOM, ALGO, and WAVES, among others.
By comparing the expected fiat annual returns of Staking with the range of holding annual returns, one can observe the risk level of Staking, i.e., whether Staking is more likely to yield high or low returns compared to simply holding the assets.
Based on statistics, except for XTZ and SNX, where the Staking expected fiat returns are closer to the highest holding returns, the fiat returns of the Staking assets of other assets are closer to the lowest holding returns.
Although most assets have a difference of over 70% from the highest holding returns, except for ALGO and LUNA, whose Staking returns are only slightly higher than the lowest holding returns by less than 7%, the Staking returns of the other 11 assets are more than 25% higher than the lowest returns. Overall, this means that the risk level of Staking returns is more stable compared to simply holding the assets.
Source: [Original Article](https://www.panewslab.com/zh/articledetails/N2280885.html)
