Bybit is a popular global trading platform for cryptocurrency derivatives. Recently, Bybit has made its foray into decentralized finance (DeFi) with ByFi, its dedicated DeFi platform. ByFi provides users with the following services:
- Dual Asset Mining
- DeFi Mining
- Flexible Staking
In this article, we’ll be looking at flexible staking. However, before we do that, let’s take a look at staking in general.
What is Staking?
Staking is a process that lets you commit your crypto assets to support a blockchain network, or simply to earn passive income. Since DeFi generally yields a higher interest rate as compared to traditional finance, staking crypto is a great way to make your money work for you.
Staking Crypto: How Does It Work?
There are two ways to stake cryptocurrencies:
- Participating in PoS.
- Using a staking platform.
Participating in PoS
Typically, you associate the term “staking” in crypto with proof of stake (PoS) cryptocurrencies. The idea itself is pretty straightforward. First, you lock up your tokens in the network’s ecosystem. The more tokens you lock up, the greater your voting power. After you lock your tokens, you can participate in network governance and validate blocks. Through ByFi Flexible Staking, you can unstake your tokens anytime you want.
However, the unstaking process may not be immediate. For example, suppose you don’t wish to participate directly in the governance process. In that case, there are several crypto platforms which allow you to place your tokens with a delegate, who then proceeds to make governance decisions on your behalf. The tokens themselves remain yours.
Using a Staking Platform
Another option is to use a staking platform like Bybit. Again, there are multiple advantages here:
- You have the opportunity to earn a yield on multiple popular cryptos, instead of just one.
- This is a solid option if you’re interested purely in earning passive income.
- If you’re a beginner, using staking platforms can be a good starting point.
ByFi provides a robust and reliable staking platform that makes it possible to earn a healthy yield on multiple cryptocurrencies.
ByFi Flexible Staking Details
ByFi’s platform allows you to stake tokens and earn a high APY. So why is it “flexible?” That’s simple: you can unstake your tokens anytime you want. Currently, ByFi allows you to stake the following cryptos (APYs in parentheses): ETH (2.50%), BTC (2.00%), USDC (4.50%), USDT (3.50%). Keep in mind that coins offered and the corresponding APY will keep on changing, depending on market conditions. The yield earned will be auto deposited daily to your ByFi account.
A Quick Detour: Understanding APY
APY is short for annual percentage yield, which means the rate of return you receive on a savings deposit. Currently, Bybit does not support compound interest, so your daily yield will not be reinvested automatically to generate extra yield. If you wish to do so, you can manually make a new deposit for flexible staking.
How Is the Daily Yield Calculated?
With Bybit, your yield is calculated as follows:
Daily Yield = Number of tokens you’ve staked × (APY for the staked token ÷ 365)
Looking at the formula above, the daily yield depends on the type and number of tokens you’ve staked. The APY of your stake depends on:
- The actual token staked.
- Market conditions.
APY Calculation Timelines:
- The calculation on your yield starts the day after you’ve staked the tokens.
- The yield is deposited daily to your ByFi account the day after the calculation starts.
- The yield earned is refreshed daily at 00:00AM UTC.
Let’s see how this works, using an example.
- Bob buys 20,000 USDT on November 20, 2021, and locks them up in ByFi, which has a 9% APY.
- The calculation starts at 00:00AM UTC on November 21, rounded to the nearest integer.
- Assuming that Bob hasn’t removed his stake, starting at 00:00AM UTC on November 22, the yield, approximately 5 USDT, gets auto deposited to Bob’s account.
- If Bob stakes an extra 20,000 USDT on November 21, the yield will be calculated at 00:00AM UTC from November 22 onward.
What Do I Need to Do to Be Eligible for Flexible Staking?
- ByFi’s flexible staking doesn’t require KYC verification and is available for both veteran traders and newbies to join.
- The higher the potential volatility of a crypto, the higher the APY. However, make sure that you choose the crypto that best suits your risk appetite.
Bybit’s ByFi provides you with a platform where you can easily stake and earn rewards on multiple coins. In addition, Bybit’s exchange delivers excellent security — so you don’t need to worry about losing your stake due to hacking. In addition, the APYs offered are attractive, warranting a further look. If you’re interested in what ByFi has to offer, check out Bybit’s other offerings:
- Dual Asset Mining: A non-principal investment with floating returns.
- DeFi Mining: Stake token combinations for a predetermined number of days to earn yields.
- Bybit Launchpool: Stake BIT as an exchange token, and/or another new token, to earn BTC, additional tokens and a USDT bonus.
This is a sponsored guide. Learn how to reach our audience here.
This article is not a direct offer, recommendation, or endorsement of any products, services, or companies mentioned. Blockgeeks.com does not provide investment, tax, legal, or accounting advice. Crypto is risky, do your own research, invest safe.