Staking ATOM on Coinbase or Crypto.com comes with opportunity cost

TLDR at the bottom

If you own ATOMs, and are earning yield on Coinbase or Crypto.com, I highly recommend you look into native staking. I want to discuss the opportunity costs of earning yield on these two platforms, versus what you can get if you stake natively.

What yields are available on Crypto.com or Coinbase

The yields on these platforms seem pretty good on the surface.

• CDC offers up to a 7% yield, on a 3 month lock up. I mean, no one wants to lock up their assets for 3 months, but 5.5% is better than nothing.

• Coinbase offers up to around 10%, and rather than a lock up period, they just utilize the native ATOM unbonding period of 21 days.

These yields are pretty good, but, what does native staking offer

• Native ATOM staking currently offers an APR of roughly 13%. This is significant compared to both CDC and Coinbase. With ATOM inflation currently sitting at 10%, it’s important to beat inflation and native staking is the only yield that will do such.

• Native staking also earns you rewards from Interchain secured consumer chains. These Interchain secured are sovereign blockchains, who pay rewards to ATOM delegators/validators for economic security. These rewards add less than 1% on top of the current APR, however, if these chains take off on the future, these rewards could provide a significant boost in APR.

• CEX’s are always left out of airdrops. In order for atom stakers to recieve airdrops, they must stake natively. It doesn’t matter what wallet provider you use to stake, so long as you hold the private keys or seed phrase. If you hold the keys, and meet the required criteria for each specific airdrops in question, you will be included in the airdrop snapshots.

Airdrops in the past few months you could have gotten by Staking natively

• Celestia
• Namada (Privacy coin)
• Dymension

And more have been announced. Some have probably taken snapshots, but if you can, get off the exchange and natively stake so you can qualify.

Wallet providers to stake natively

A few wallet providers that allow you to stake ATOM natively are Keplr (desktop and Mobile), Cosmostation (Mobile), Leap wallet (Mobile) and Defi Wallet (Mobile). It’s easy to get your own seed phrase, and be able to stake right away!

TLDR:

If you own ATOM, and wish to earn yield on it, it is simply more beneficial to stake it natively your self. You get higher APR, which beats the tokens inflation. You earn Interchain Security rewards and you will be much more likely to earn airdrops, so long as you meet the project doing the airdrops’ criteria.