How to Stake ETH2 and Earn Double Rewards

Featured image by QuoteInspector

A tour of Ankr Staker & liquidity provider SnowSwap

There are a lot of really cool dApps on Ethereum right now. The problem with Ethereum, though — as everybody knows — is the fees associated with its current proof-of-work validation. And that’s the promise of Ethereum 2.0: that the move to proof-of-stake will speed everything up and reduce fees.

Given my excitement for Ethereum 1.0, I was eager to get involved with 2.0. Unfortunately, staking ETH2 requires 32 ETH — and I had more like one.

There’s a solution for that, too! Staking pools! Today, I’ll share my experience with staking ETH2 and using the wrapped token to gain bonus rewards while my ETH assets are frozen.

Usual disclaimers apply. I’m a hobbyist. None of this is advice. Do your own research, and don’t gamble with what you can’t afford to lose.


Staking with Ankr

There are few ETH2 staking options available, but the first one I learned about was Ankr. Ankr Staker allows you to stake ETH2 with as little as 0.5 ETH. When you stake, you will exchange your ETH for an equal amount of Ankr’s wrapped token, aETH.

The cool thing about aETH is that it represents your ETH investment plus earned rewards.

When I joined, I staked 1 ETH and received 0.99 aETH. This was a little confusing to me at first, but it made sense after a week or so — I could see that 1 aETH was now worth 1.01 ETH, and after another week, it had grown to 1.03 ETH.

That’s pretty cool. My 1 ETH is frozen until the launch of Ethereum 2.0, but I can watch the value grow by checking in with Ankr.

What’s cooler is that even though I’m staked with ETH2 and my assets are frozen, I still have the wrapped token to play with!


Cool? Frozen? Let’s talk about SnowSwap!

I learned about SnowSwap from Ankr’s article on Medium, Stake aETH with our new partner SnowSwap. Well, that sounds just about perfect, right?

SnowSwap’s eth2SNOW liquidity pool solves two problems. First, it eliminates the ETH entry requirement for anybody interested in staking ETH2. You can trade for whatever fraction of an aETH you’d like, and any aETH you obtain can later be exchanged for the corresponding percentage of staked ETH plus rewards.

The second problem it solves is that it allows people who have staked their ETH to earn rewards immediately by serving as liquidity providers. Providing liquidity to the eth2SNOW pool offers a high APY, currently around 24%. Rewards are paid in SnowSwap’s native token, SNOW, so the profitability of rewards is tied to that.

Sound good? Let’s set it up!

First, you need to withdraw your aETH tokens from Ankr at the site above: eth2.ankr.com. Now head to SnowSwap and connect your wallet. Providing liquidity is a two-step process. First, exchange aETH for the LP token, eth2SNOW. Then, stake the eth2SNOW to begin earning rewards.

SNOW tokens have seen a lot of volatility in the past week — like just about all cryptocurrencies — and are currently worth about $46 each. The screenshot above is after just 10 days. At the presumably-budget-rate of $46, this still represents a $302 gain for the year. SNOW has been as high as $150 in the past month, though, so the final value earnings after a year could easily be 3x or more.

It’s also worth noting that SnowSwap is in its infancy and still running a beta version. I think this bodes well for its future, though, and I’ve seen estimates for SNOW as high as $700-$1500. The investment has the potential to be quite lucrative for the “frozen” ETH!


Conclusion

Using Ankr’s staking pool is a great way to start earning ETH2 rewards today, even though the rewards won’t be accessible until Ethereum 2 launches in 1 or more years. The wrapped token they return in exchange gives a distinct advantage, though, allowing you to provide liquidity and effectively earn double-rewards while you wait.

The gas fees to retrieve aETH, exchange for SnowSwap’s LP token, and stake the LP token were annoyingly high. It probably cost me $100 to do it all, but now that the resources are parked and earning, I feel pretty good about it.

Ethereum’s hurting right now because of its fees leading to an exodus to other chains like Binance Smart Chain, but they have a big lead on the rest of the pack. The competition will certainly chip away at it, but if Ethereum 2.0 can deliver on its promises before it’s too late, it’s going to see tremendous growth in value.

The pieces are in place, and now we wait and double-earn rewards along the way!


I’m looking for feedback! Are you excited about Ethereum 2.0? Have you staked elsewhere, or have you found a better use for a wrapped token? Leave a comment and let me know!


This article was originally published on read.cash on February 28, 2021.

If I Could Start My Crypto Life Over

Featured image by Braden Collum on Unsplash

Five tips for new cryptocurrency investors

In the grand scheme of the cryptocurrency universe, I’m still a relative noob. I’ve only been in the game for a few months, but I’ve learned A TON in a short amount of time. Now, looking back, I feel like Rod Stewart famously sang:

I wish that I knew what I know now when I was younger

I mean, 100 days younger, but still — the point remains. So, here are 5 things I wish I would’ve known when I was getting started. I’m not trying to sell you on any of the products or services I mention, but I’ll include referral links at the end of the article to use if you’re interested.


#1 Learn the tax rules

It feels dumb to say, but I didn’t even think about taxes when I started. I was carefree and carelessly tradin’ and buyin’ and sellin’ and just havin’ myself a grand ol’ time. And then I learned that most of what I was doing probably had tax implications.

&*($#.

Luckily, this was only about one month into the journey, and it wasn’t too terrible to get caught up on things. Still, this was my biggest regret in the beginning.

Now, I keep a spreadsheet for all my transactions. I record the cost basis and realized gains & losses when selling or trading. It still gets pretty complex in a hurry, so I also use free services CoinTracker and Koinly to help.

The point here is to know that there are rules and get ahead of them, so you don’t find yourself playing catch-up later. Because it really stinks.

#2 Compare exchanges

I don’t remember how I ended up with Coinbase, but that’s where I started. I’m glad that’s where I started, though, because one of the cool things about Coinbase is their “earn” program that lets you watch videos about new cryptocurrencies to earn small rewards.

Currently, you can earn about $30 in rewards this way. Not only is it great for getting some free crypto, but I also found it interesting to learn about the new cryptos themselves. This helped me understand the bigger picture and how cryptocurrencies play an increasing role in the world.

So that’s one cool thing about Coinbase, but I also find myself looking longingly at Binance and wishing I had assets over there to move onto the low-fee Binance Smart Chain (BCS). And both Coinbase and Binance don’t have certain cryptocurrencies I wish I could buy.

This is why I suggest you shop around. Compare what promotions and sign-up there are to take advantage of. Look for cryptocurrencies. Consider what fees might be involved and lock periods before you can move funds off the exchange. Please do your research so you can maximize rewards and not feel trapped when it’s time to do the things you want to do.

#3 Invest some stablecoins

This one stings on the heels of a bad week because I didn’t do this. There are really great interest rates available, and having the non-volatile assets available to buy the dips is a real treat.

The first place I recommend for this is Celsius. They offer a 12.5% return on most stablecoins. In addition to great rates on stablecoins, they also offer returns for many popular coins like BTC (6%), DASH (5.5%), MATIC (13.99%), and many others. It’s set-it-and-forget-it gains that you earn just by having funds in your wallet.

Celsius isn’t available everywhere, though. Nexo is another site that offers 12% returns on stablecoins and many others. BlockFi is a third option, but they offer just 8.6%. (However, I just read today that BlockFi is a good play to deposit funds and then use your one free withdrawal per month to move USDC to Celsius as a way to dodge fees.)

Having a pile of high-interest earning stablecoins is also great for making sure you have money to pay taxes at the end of the year. (Remember #1?) Consider the 12% return rates here against banks, where high-yield savings might earn you 0.5% interest. Even the stock market, with all its risks, can’t guarantee you these returns.

The tradeoff is that these funds aren’t FDIC insured. Certain providers offer different assurances, so again, do your own research.

#4 Invest in DeFi

Those stablecoin interest rates I was talking about are pretty impressive, but they pale in comparison to the return rates offered by many defi apps. Look around, and you’ll see APYs north of 200%.

I’ve invested a small amount with Cake DeFi, and I’ve been excited about the result. They offer $30 for signing up, and you can earn 130% APY with their BTC-DFI liquidity pool, 5–7.5% on BTC with their Lapis service, or 37% by staking DFI.

DeFiChain (DFI) is their native coin, and it’s trading for about $3.50. Cake DeFi’s goal is to bring user-friendly, high-return crypto financial services to the masses, and so far, they’re delivering. I like here because of the high returns plus the high potential of the DFI coin.

I’ve invested $500 with Cake DeFi, and every day I earn about 0.50 DFI and a couple of satoshis of BTC. I did the match, and the story checks out: it amounts to approximately 130% APY return.

Cake DeFi is just one option, though, and not an especially popular one at that. Harvest, Beefy, and many others exist — look around!

#5 MetaMask & Web3.0

It took me a minute to understand how a lot of the distributed apps (dApps) worked. It’s a different world. You don’t sign up with usernames and passwords and have accounts. Instead, you connect your wallet, and that’s who you are.

I started using Trust Wallet, and it’s been fine. There’s a built-in browser that I can use within the app that seems to work pretty well. I can also use the MetaMask browser extension for Chrome to use the same wallet on my desktop computer.

This has allowed me to expand into ETH2 staking and investing with SnowSwap and use one of the most popular dApps — Uniswap — to obtain tokens that aren’t available through the exchanges.

It’s a non-intuitive process to pick up coming from the traditional internet world we all know & love. And I’m a pretty tech-savvy person. Just having the awareness that this is a thing probably would’ve been enough to make it intuitive enough to grasp, but there’s no web3.0 handbook that really spells it out.


“Free $150” Startup

Here’s what I’d do if I were just getting in. This process earns about $150 in rewards with minimal effort using many of the tools above.

  1. Sign-up with Coinbase using a referral link to earn $10
  2. Buy $200 of BTC from Coinbase (*required to earn the $10 reward)
  3. Complete Coinbase quizzes to earn another $30 in rewards
  4. Convert earnings to BTC
  5. Sign-up with Celsius with referral code to earn $30
  6. Transfer all BTC from Coinbase to Celsius; let sit for 30 days (*required to earn $30 reward)
  7. Sign-up with Cake DeFi with referral code to earn $30
  8. Transfer all BTC from Celsius to Cake DeFi
  9. Convert half of BTC to DFI and add it all to BTC-DFI liquidity pool
  10. Wait 180 days (*required to earn $30 reward)

At the end of this process, you’ll have earned $10 + $30 + $30 + $30 plus another $100 or so from the liquidity pool — that’s double your money in about 6 months!


Conclusion

So there you have it, my top 5 things I wish I would’ve known when getting started.

First, make sure you know your tax rules so you don’t create a paperwork nightmare or land yourself in a financial/legal mess. Shop around for different exchanges to find the one that serves you best. Set aside some stablecoins to generate steady, non-volatile growth to cover expenses, keep funds for strategic investments, and take advantage of lucrative investment opportunities on emerging defi platforms. Finally, learn to use a non-exchange wallet to participate in the new web3.0.

It’s been a wild few months learning about all this, and I’ve had a great time. I hope these tips help you get up to speed quickly and avoid some of the mistakes I made along the way.


I’m looking for feedback! What do you think of these tips? Do you have other ideas that should be included? Leave a comment and let me know!


Referral links

In case you want ‘em.

  • Binance US — Binance Smart Chain & BNB
  • Cake DeFi — $30 sign-up reward
  • Coinbase — $10 sign-up reward — earn $30 in free crypto
  • Celsius — $30 sign-up reward (1319904a9e)

This article was originally published on read.cash on February 27, 2021.

Robinhood, the Crypto Gateway Drug

Featured image by YIFEI CHEN on Unsplash

How I moved from slingin’ stonks to cryptocurrencies

It all started with a birthday check from Grandma. I’m 40, but I still get birthday checks from my grandparents. Cute, right?

The pandemic was in full bloom, and there wasn’t much for me to do with my birthday bucks — so I decided to head to everybody’s favorite virtual casino: Robinhood.

I was classic dumb money, investing in a certain electric car company — let’s call it Schmikola — and other less-bad-but-still-bad choices. I learn from my mistakes, though. With every misstep, I became a little smarter.

I moved from following the herd to making better, educated decisions. I was diversifying. I decided ETFs were better and started putting money into them instead. Things were growing and moving in a positive direction.

But then I realized I have a 401k for that. I asked myself:

What am I trying to do here?

That’s when I ripped it all out and put it into bitcoin. (Keep in mind that “all” is my original birthday money plus weekly investments of about $50. We’re probably talking about $500 at this point — not my life savings.) Can you guess what happened next?

Source: my Robinhood portfolio

That’s how my fascination with bitcoin and cryptocurrency began. I started exploring outside of Robinhood and discovered an entire world of choices and freedom. It’s become my number one hobby, and that’s what brings us to today.

I’ve since moved all my funds from Robinhood and into exchanges, wallets, and investments. Robinhood’s okay for getting started if your only goal is to have some skin in the game. It’s crypto with training wheels. You can’t make as many mistakes, but you also lose all freedom.

There are two things Robinhood steals from you: choice and opportunity. You’re limited to the handful of cryptos they offer, which is less than ten in a sea of thousands. And since you don’t have control of the coins themselves, you can’t use them for investing — and the investment returns in the crypto space are mind-boggling good.

That’s how my journey began. After leaving Robinhood, I began to explore the various exchanges and opportunities. I started researching lots of different cryptocurrencies. I’ve learned a ton, and I’ve had a lot of fun along the way.

In my next article, I’ll talk about how I’d start if I could restart from the beginning. There’s free money available if you know where to look. I could easily double my same $250 birthday investment in less than 6 months, and I’ll show you how. Stay tuned!


Please note that this is my hobby. This is not financial advice, nor am I qualified in any way, shape, or form to give financial advice. Learn with me; have fun with me, but do your own research and only gamble with money you expect to lose.