Thread by @PeekabooDefi

If you want to have a very good investment experience.

You will want to understand the difference between Staking and Lending.

Noobs edition 🧵

I have seen multiple threads about protocols which offer staking and lending services but only few understand the difference between both.

Here i will state the differences

Firstly👇

What is staking : staking is the process of locking up your crypto assets for a specific period of time to help provide or supports the operational blockchain, in return you earn more additional token.

Under this system many blockchain uses the proof-of-stake consensus mechanism. {POS}

you can learn more about the POS here 👇

forbes.com/advisor/invest…

What is lending : lending is the process in which users lent or deposits their cryptocurrency to borrowers in return for interest.

Payment made in cryptocurrency that is deposited and compounded on a monthly, weekly and a daily basis.

- Now the difference is quiet simple and clear👇

※ Staking let's you lock up your crypto assets and let's you earn rewards

※Lending let's you collect interest from borrowers when you lent your crypto assets to them through a pool.

- How does staking works.

• The annual percentage yield (APY) determines how much you earn. However, this can change over time.

• The crypto assets network creates new coins that it gives as rewards and this increases the total amount of the circulating supply

• When you agree to lock up your crypto assets this will take several days or weeks to be able to unlock your assets if you want to trade them.

🚫 Note : not all tokens can be staked. Staking is only optional with blockchain that uses (POS) consensus mechanisms.

E.g @EvmosOrg @NEARProtocol and newly added blockchain @ethereum. However, staking rewards can vary depending on the crypto validators or services you are using, the APYs are not fixed.

Understand the risk involved in staking is hghly important.....

This will it breakdown for you. Check it out it's very important if you want to consider staking.

Check here....👇

makeuseof.com/risks-of-staki…

- How does crypto Lending works.

Crypto Lending isn't as wild and available as staking. some crypto dexs offer lending option's such as @AaveAave and @compoundfinance...

To use either of these, you'll deposit or lend your assets into the pool that others can borrow from, then you can withdraw your loaned capital plus your interest later, rather than directly connecting Lending and borrowers like some P2P lending platforms.

Crypto lending works like a savings account to a bank.

Unlike saving and locking up your funds in the bank, the money locked up in the bank won't be a guarantee for losses.

However, the interest earnings in crypto lending maybe be higher than you could find with your traditional banks, but before considering crypto Lending kindly make sure that you understand the risks involved.

Understanding the risk involves in crypto lending is very important.

Check this out to read more about the risk involved👇

cryptogeeks.org/risks-of-crypt…

If you are holding any crypto for a long term, you might consider different ways to earn interest from your holdings, and lending and staking is a good way to earn.

Now you'll want to compare and contrast both on different platforms to see which one that offers the best staking or lending APY

Depending on the platform you can actively collect and then restake your rewards to benefits from the compound interest.

While other platform auto-compound the interest for you while you are away.

I know that you reading this thread, you might find it interesting and will want to try it out.

Always understand and consider the risk that comes with buying and selling crypto.

Crypto tends to be very volatile.

#lending #staking

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@Only1temmy @rektdiomedes @kendrickNoble7 @defiprincess_ @Dynamo_Patrick @VanessaDefi
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