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Please stop treating staking and getting interest as the same thing

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by COINS NEWS 183 Views

I've seen many people share how high their “staking rewards” on their stablecoins are compared to interest from banks. This is actually not correct, stablecoins (and PoW coins) cannot be staked. What's being done is actually exactly the same as what banks do. Your coins are invested/loaned at an even higher APY and you get a part of the reward, the only difference being that you get a larger reward. This is not staking, your coins are not helping the network.

Staking is done with PoS coins such as ADA and DOT. Here your coins are used as proof to verify transactions. And as a result of staking them, you get rewards every once in a while. The rewards you get are new coins that didn't exist before, unlike when you get interest (the service sends you their coins). By staking your coins, you help the coin remain decentralized.

Why does it matter? Because these are fundamentally different things and mixing them up can become quite confusing to new people and experienced people alike. The end result might be same (getting more coins), but the benefit you've done is far different.

submitted by /u/javasyntax
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