Miners are the reason for Bitcoin emission. Approximately every 10 minutes, a new 6.25 BTC is generated, and this process will continue until the next halving in 2024, when the block reward will be halved. However, as the industry develops, other forms of earnings have appeared besides mining. They include staking, when user funds are blocked in a pool and interest is accrued on them, or lending, when users can borrow and receive loans with interest using lending platforms.
Nevertheless, as for Bitcoin and other PoW cryptocurrencies, that is, those mined using energy-intensive computing, mining is at the heart of making a profit, while all other services are secondary and cannot provide higher returns. The “further” the service is from mining, the more risky its business model is, therefore, in order to make your capital work most efficiently, you need to strive to be “as close as possible” to mining. In other words, you need to be on the first line of earning profits and always remember that everyone else is just living off the leftovers of those who skim the cream off the top.
However, all mining today is in the hands of large corporations, and private enthusiasts no longer have a chance to compete with them. This business has grown so much that only major capital can really earn by mining at this point. But as if in contrast to the current state of things, the Minto project appeared, creating a kind of bridge between mining and the common man, connecting them again thanks to DeFi technologies.
So, as a large mining project, Minto offers everyone interested to get a part of the Bitcoin mining infrastructure via the purchase of tokenized mining power (tokenized hashrate) and earn together with Minto, receiving daily income in Bitcoin.
On September 25, 2022, Minto distributed among its users 0.04863344 BTC, that is, $924.04 (at the current rate of $19,000/BTC) earned jointly through mining from 55,000 TH/s. This means a profit of $16.8 from 1,000 TH/s or from 100,000 BTCMT per day ($105,000 at the current rate of $1.05/BTCMT). With the 2.6 current multiplier, this corresponds to a daily yield of 0.0416% per day or approximately 15.18% per year (before the FTX collapse).
On November 27, 2022, Minto distributed among its users 0.01808791 BTC, that is, $307.49 (at the current rate of $17,000/BTC) earned jointly through mining from 55,000 TH/s. This means a profit of $5.59 from 1,000 TH/s or from 100,000 BTCMT per day ($45,000 at the current rate of $0.45/BTCMT). With the 2.8 current multiplier, this corresponds to a daily yield of 0.0348% per day or approximately 12.69% per year (after the FTX collapse).
Taking network difficulty and electricity cost fluctuations into account, the average annual Minto profitability fluctuates around 10%.
Let's see what other non-mining services are offering.
Below is a table of September crypto lending protocol profitability for the most significant assets. We see that traditional lending platforms like Compound and Aave offer rather modest returns, while risky sites like Nexo and CakeDefi are trying to attract funds with relatively high rates.
This is quite understandable, since new lending projects are forced to conduct aggressive marketing in order to compete not only with the industry leaders, but also with staking projects, promising on average the same 5% annually.
In the most well-known lending protocols, Bitcoin generates low profits (Minimax.finance is used here):
Profitability in Ether is slightly higher:
In addition, if you look at the chart of annual profitability in Bitcoin, for example, in the Arbitrum network on the Aave platform, it has fallen almost three-fold since mid-2022:
However, the fall is also typical for more exotic platforms than Aave. So, for example, in Alpaca in the BSC network, we see a similar picture, the only difference being that due to the risk premium, the profitability in Bitcoin was initially higher here:
Ether profitability in the Arbitrum network on the Aave platform was below 0.2% for a year and only as "The Merge” approached, it rose to a record 1.65%, and then went down again. This is due to a kind of hype on the eve of "The Merge", stirred by the users who aimed to gain additional profit as a result of the Ethereum fork.
We observe a similar pattern in the BSC network on the Alpaca platform:
When choosing a lending platform, it is very important to understand that returns above 5% are associated with increased risk, and in this case, staking platforms seem preferable. A similar rule applies here - usually, the lower the project market cap, the higher its profitability. And it is true, since the capitalization of PoS coins is the main measure of the success of such projects. The higher the capitalization, the more coins can be staked, the more attractive the project looks. No wonder one of the main characteristics in PoS is TVL - Total Value Locked or the volume of blocked funds, and it directly depends on capitalization.
Staking is provided by specialized services (e.g. Midas, Everstake, Lido), some wallets (Trust Wallet, Atomic Wallet) and many centralized crypto exchanges. Staking provided by large exchanges looks the least risky today:
On the Binance exchange:
On the Huobi Global exchange:
Huobi Global does not offer BTC and ETH staking, but instead has a choice of less capitalized and even exotic assets. You can find fairly high returns here, which are offset by the high risk of the underlying assets.
On the OKEX exchange:
OKEX offers a wide range of assets for staking, which also include a lot of exotics, but neither Bitcoin, nor Ether.
Specialized sites offer higher returns with higher risk and less transparency. For example, Everstake provides a little more than 4% in Ether:
Midas Investments offers higher rates, and a boosted APY mechanism, which indicates a more aggressive approach to raising capital:
If you are interested in staking platforms, including exchanges, you need to take into account that any profitability characteristics, such as APR or APY, are typically indicated in real-time, or cover a favorable market period in the past. Since the value of annual profitability can also decrease quite significantly with strong market movements, these parameters have to be used very carefully, especially since each project puts its own meaning into them and does not disclose the formulas and data used for calculations.
In terms of information disclosure, profitability charts, for example APR (APY), could serve as the most objective characteristic of staking projects as a function of time, however, it is extremely difficult to find such analytics on the web. At the same time, even this parameter would not provide a clear idea of the associated risks and prospects of a particular platform, each of which remains a blackbox.
Conclusion:
Thus, regardless of the attractiveness of certain interest rates on various platforms, risk is always of paramount importance. It is extremely important to understand what is a project’s underlying asset. If a project is backed by real assets, and, even better, by infrastructure, it has a much better chance of surviving unfavorable market conditions and ensuring high profitability during market growth phases.
About Minto:
Minto is a huge mining farm that never stops working - not even for a second. Minto earns Bitcoins by mining on its own hardware, offering users to join this business by staking BTCMT tokens, that is, through the purchase of highly liquid hashrate.
Minto was one of the first to combine physical mining and DeFi (staking) capabilities, that is, integrated a decentralized digital service into real mining infrastructure. Minto earns through mining at the fundamental level, and can most effectively manage capital at the operational level thanks to DeFi technologies, distributing the profit denominated in the underlying asset, i.e.,Bitcoin, among its users daily.
The Minto project offers an optimal ratio of profitability and risk, since it is based on real mining power, and the foundation for profit is the mining of the first cryptocurrency. Minto combines all the basic advantages of the crypto industry - mining infrastructure, Bitcoin as a base asset, a team of highly qualified employees, and DeFi capabilities.
Join Minto and let your capital bring in real profits in the real mining industry!
