Staking yield is not the same as investment return. ๐งฎ
Hypothetical: 100 tokens become 104 after a year. If the token price falls 30%, the position is worth 27.2% less before feesโeven with 4% more tokens.
Before staking ETH or an altcoin, check:
โข Yield source: network fees, new token issuance, or temporary incentives?
โข Exit terms: lockups, withdrawal queues, and liquidity.
โข Added risks: validator penalties, custody, and smart-contract exposure. Liquid staking tokens can also trade below their redemption value.
Staking can grow your token balance while helping secure a network. It does not protect its cash value.
Compare the risks, not just the APY.
#Staking #Ethereum #CryptoEducation
Hypothetical: 100 tokens become 104 after a year. If the token price falls 30%, the position is worth 27.2% less before feesโeven with 4% more tokens.
Before staking ETH or an altcoin, check:
โข Yield source: network fees, new token issuance, or temporary incentives?
โข Exit terms: lockups, withdrawal queues, and liquidity.
โข Added risks: validator penalties, custody, and smart-contract exposure. Liquid staking tokens can also trade below their redemption value.
Staking can grow your token balance while helping secure a network. It does not protect its cash value.
Compare the risks, not just the APY.
#Staking #Ethereum #CryptoEducation