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What is the difference between staking and earning?

At Cointract we offer the product "Earning". To help you understand exactly what you are investing in, let us explain what earning is and how it differs from crypto-staking.

Cointract Crypto Trading App: Erklärung des Unterschieds zwischen Staking und Earning

In crypto, the terms "earning" and "staking" refer to two different ways in which cryptocurrencies can be used to generate income and earn interest respectively.

"Earning" explained simply

When you are investing in "Earning" products, you are investing in stablecoins. Stablecoins are cryptocurrencies whose price is linked to a national currency, a basket of currencies or other assets through a price fixing mechanism (learn more).

By investing in these stablecoins, you are lending a crypto exchange a portion of your capital for a certain period of time to hedge their capital transaction. For this service you can receive up to 8% p.a. interest on your balance every day, depending on the coin.

There are no minimum duration periods for earning. You can use your invested capital elsewhere or withdraw it again at any time in daily tranches of max. 20'000 CHF.

"Earning" allows you to use your capital to generate a profit and to benefit from attractive interest rates, while at the same time giving you flexible access to your invested capital.

«Staking» explained simply

If you own cryptocurrencies such as Ethereum, Tezos, Cosmos, Solana or Cardano, you have the option to 'stack' part of your holdings and make money from them over time.

By staking your cryptocurrencies, you benefit from rewards as the blockchain uses your stake. Cryptocurrencies that enable staking use a consensus process called Proof of Stake (learn more). This ensures that all transactions are verified and secured without the need for an intermediary such as a bank or payment system. By staking your cryptocurrencies, you participate in this process.

The advantages of staking are obvious: if you want to hold cryptocurrencies for a long period of time, you can generate a meaningful return through staking.

Staking also helps to improve the security and efficiency of the supported blockchain projects. By staking a portion of your funds, you strengthen the blockchain's resilience against potential attacks. At the same time, staking helps to process transactions more efficiently.

By staking, you are actively involved in the blockchain community and support the network, while at the same time benefiting from the rewards. A win-win situation.

However, staking also often comes with a freeze or holding period, where your cryptocurrencies cannot be used elsewhere for a certain period of time. This can be a disadvantage as you cannot trade staked tokens during this time, even if there are significant price movements up or down. Therefore, before staking, find out about the specific requirements and regulations of the projects you want to participate in.

«Earning» with the Cointract App

Cointract offers you three different stablecoins in the "Earning" product: Binance USD and USD Coin are linked to the US dollar, while PAX Gold is linked to the gold price. We use the Nexo exchange for trading, on which a daily trading volume of 8 to 21 billion US dollars takes place.

Investing in stablecoins is easy. Download our app, register and use Cointract's earning calculator to check how much interest you can expect to earn, depending on the amount you want to invest.

Once you have defined a strategy, transfer CHF to your Cointract account. We will automatically convert the CHF into USDT. With USDT - a basic currency for crypto exchange - you can now buy your favourite coin.

Take a look at the tutorial and get a quick overview of how you can earn attractive interest through our partner exchange.

This article is for informational / promotional purposes.

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