So I’ve recently sold about RM20,000 worth of bitcoins. It was just sitting in my Luno account for a month or so as MYR because I did not know what to do with it. I have since moved that amount to Binance. I converted to XRP and then transferred it to Binance.
At the same time, I was also doing my research on DeFi and staking. A really good place to start if you’re looking into this is CoinGecko’s book – How to DeFi. It took me a few days to get through the whole book the first time, and another few days for me to kinda-sorta understand it. And even now, I think I’ve barely scratched the surface. If you guys have other recommended readings, please do share them with me.
My Crypto Portfolio on Binance
Space reserved for updates.
Binance vs Coinbase
So my interest is actually in staking my coins. I don’t like my assets to just sit there and staking actually generates a lot of returns in the form of interest. So I had to look for platforms that supported staking and savings. In the end, it boiled down to Binance and Coinbase, I went with Binance mainly because they’re the biggest and the cheapest.
Is Binance Safe?
Some of you may remember the Binance hack back in 2019. The company actually absorbed the losses sustained then and no users were affected.
Another one of my concerns with Binance was with China. Binance was founded in China but they’ve since taken measures. Their servers were moved to Japan back in 2017 and they’re now headquartered in the Cayman Islands.
What I Did on Binance
As mentioned earlier, I had about RM20,000 of Bitcoin profits sitting in my Luno account. I decided to move this amount to Binance to try out its savings and staking. I wanted to move my funds with the lowest possible fees and decided to move it using XRP. Bought the maximum amount of XRP in Luno, moved the funds to Binance, and then converted my XRP to USDT.
The total transfer cost of XRP? 0.8313165. Which translates to about RM4?
As you can see, I’m holding 3,811 USDT right now and earning 5.80% p.a. using Binance’s savings feature
Earning Interests on my Crypto
So the safest of all the various forms of earning a return on your coins is Savings. Of which there are two types – Locked Savings and Flexible Savings.
An example would be Bitcoin’s savings. You stand to earn 1.2% p.a. Which isn’t too bad considering I’ve been earning zilch previously.
Another personal example of mine is my USDT Savings which is currently netting me 5.80% p.a.
I’ve yet to actually stake my coins but I’m really looking into it. Right now, there’s a sort of first come first serve situation with the more popular coins.
So, what is staking?
Staking is the process of actively participating in transaction validation (similar to mining) on a proof-of-stake (PoS) blockchain. On these blockchains, anyone with a minimum-required balance of a specific cryptocurrency can validate transactions and earn Staking rewards.– Coinbase
For example, for USDT, the interest rate for staking is almost double its savings rate at 10.67%. But it is sold out.
I’ll definitely be selling my USDT at some point to invest in other coins and then staking them. Updates will be done on this same page so keep an eye out.
The Risks of Savings and Staking
As we are all too familiar with, the higher the risk, the higher your potential reward. Naturally, that means staking carries a higher risk when compared to savings.
One risk that both savings and staking share is the risk of the value of your coin falling. If that particular coin experiences a huge drop, all interests earned will be wiped out.
Savings and Staking are very new in the world of finance and cryptocurrencies. Essentially, you’re lending your coins out to a process.
Usually, in Savings, your coin is loaned out to a holding company that then lends it to its various clients. These clients may want to borrow cryptocurrency for financial trades or for arbitrage.
In Staking, your tokens are used in its respective verification process. By helping out the network, you earn a reward.
A key thing to remember – Do not risk your whole stack of coins. Not in savings and not in staking. Don’t risk what you can’t afford to lose.
You get a small 5% kick back and discount on fees when you make transactions there.
I’m moving a relatively small portion of my crypto portfolio from Luno to Binance. Luno is still where the bulk of my portfolio will be held as it is the safest for me as a Malaysian.
The main reason for testing out Binance is to try out their savings and staking. If you’re new to cryptocurrencies and looking for a place to start, my advice is to stick with Luno as a Malaysian. Safety will be the biggest priority. My review and my cryptocurrency portfolio on Luno can be found hERE.
Risks, risks, risks
There are huge. huge risks to investing in cryptocurrencies. Even more when you’re moving them out of Malaysia’s regulatory space and into unknown, literal international waters. You then further risk it by staking/savings said coins. So please, understand the risks you’re taking before taking the dive.
The above being said, I’m extremely excited right now and I feel like a kid all over again dabbling in a whole new world of finance. I’m still very new at this and would love to hear from experts or anyone with more experience with this.
Onwards and upwards!