The Altcoin Dilemma
There is a certain type of stress presented by investing in cryptocurrency: you’re tempted to buy one coin, but you’re nervous about missing out on the performance of other coins. We all have stories of knowing about a certain cryptocurrency, forgetting to invest in it, and then watching on the sidelines as it outperforms the market. These instances are why people invest in anything other than Bitcoin in the first place. We all know that Bitcoin is the gold standard in cryptocurrency, but we’re hoping that whatever else we choose can outperform BTC.
The concept of “staking” might sound new, but it's been around for decades. Bank accounts offer a form of staking as well, though this is usually just referred to as “interest.” Most fiat savings accounts, for instance, offer less than 1% interest on what you have deposited. Not enough to keep up with inflation, but it’s better than nothing.
Current State of Cryptocurrency Staking
Staking cryptocurrency has become quite popular in recent months. People from all walks of life have been amazed at the benefits that staking has to offer; just holding certain amounts of a cryptocurrency earns you more cryptocurrency every single day. What could be better than that?
However, both of these forms of staking - the interest on a traditional fiat account, and the interest on cryptocurrency - share something in common: the yields you receive are tied to the performance of the asset being staked. In other words, you staked a certain coin, and received more of that certain coin.
At Protonchian, we approached staking a little differently. When you stake funds on Protonchain, not only will you earn a return on your idle XPR, but you will also help select the transaction validators, which helps keep Protonchain secure! Each token staked can vote for 4 block producers (BP). The block producers with the highest votes will get the highest block rewards, and the top 21 BPs will be active in producing blocks on the Proton Blockchain.
Ok, so what's the yield on staked XPR? In short, it's variable. The APY changes depending on how many tokens are staked. You can see the yield in Bloks.io Staking section or in the Proton Wallet App. You can also Long-Stake XPR. For details, check out this article.
Cryptocurrency staking often offers much higher rewards for your idle funds. We improved this model and offer variable APY when staking Proton (XPR) in the Proton Wallet, something we call “short staking;” users have recently enjoyed staking yields of over 30% on their XPR.