How can crypto staking improve in light of the FTX crash
The FTX collapse shook up the crypto market, and billions of dollars are currently locked up in the now-defunct crypto exchange. On top of that, FTX was such a big player that the contagion spread to other crypto players, including several trading powerhouses, popular DeFi protocols, and decentralized exchanges. Trust in the crypto ecosystem is at its lowest level. Investors are withdrawing funds from major centralized exchanges while the sales of cold wallets are up.
Despite an overall gloomy mood in crypto space, one form of crypto investment remains at the height of popularity, and this is staking. Staking is similar to bank deposits. You agree to lock up your funds for a period of time and, in return, earn interest on them.
Of course, staking providers are not immune to financial troubles. Many investors are still recovering from the crash of the Terra ecosystem. In May 2022, Terra’s algorithmic stablecoin, UST, lost its peg to the US dollar, and approximately $60 billion got wiped out of the digital currency space.
Such events have made the crypto community weary of locking up their assets in staking, and the crypto market responded with new innovative approaches to it.
The requirement to lock up assets in order to earn interest is a big issue for many investors when they consider staking. While terms vary depending on the platform and the type of crypto asset, it is almost always necessary to lock up crypto funds for a certain period of time.
Unfortunately, locking up your funds means losing access to them for the staking period, and if an unpredictable event like the FTX crash affects the platform you’re using, you may not be able to withdraw your funds and lose them. What’s more, to maximize the earning potential,
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