r/CryptoCurrency • u/milonuttigrain Platinum | QC: CC 1719 | Pers.Fin.NZ 17 • Apr 02 '23
Don't be blinded by the high APY. Don't treat exchanges or Staking-as-a-Service like your savings account. Hard lesson I learned from the last year. REMINDER
I'm browsing Youtube and stumbled across a video from last year. A lot of "influencers" were promoting high APY and talked about keeping cryptos on exchanges or staking-as-a-Service such as Celcius.
One of those is InvestAnswers.
This guy has shilled Celcius and numerous other shitcoins that went to lose over 95% value.
And here were the APY offered back in the day:
Does 12.5% APY sound great? Probably too good to be true. Back in the day there were numerous articles comparing bank interest with these kind of staking rates. They all forget an important thing is that deposits are not guaranteed with Celcius or many other staking platforms.
We all know what happened after the ponzi went burst:
I was one of those lucky ones, I only put a small amount and were able to withdraw before things got ugly. But now still a lot of people are waiting on what's next and Alex Mashinsky.
Mashinsky, who wore t-shirts with slogans such as "banks are not your friends," continued to falsely represent to investors that Celsius was generating high yield through low-risk investments, according to the Reuters.
Never trust any crypto influencers (and probably influences in any field...) and be alert about the high APY. Get your own wallet and store your crypto there. Don't be blinded by those high interest, it's not worth the risk.
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u/ebass Permabanned Apr 02 '23
Reminds me of a conversation I had with a friend new to crypto before Luna’s collapse. He wanted to know why he shouldnt convert all his life savings to UST and stake it for double digit APR. They seemed too big to fail and didn’t have the dodgy vibes that Tether was giving off.
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u/_swnt_ Apr 02 '23
What did you tell him? What did he do?
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u/Mr_Bob_Ferguson Platinum | QC: CC 445 Apr 02 '23
They aren’t friends anymore.
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u/OneThatNoseOne Platinum | QC: CC 40 Apr 02 '23
Friend not so high on Celsius anymore so he's giving him the cold shoulder.
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u/Psymonex Bronze | QC: BTC 15 | VET 9 Apr 02 '23
Where did you come from? Where did you go?
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u/Apositivebalance Tin | LRC 44 Apr 02 '23
I got rugged by cotton eyed joe
Hey
Hey
Hey
Hey
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u/FlagFootballSaint Apr 02 '23
"I got rugged by cotton eye joe
I went broke not long time ago
Why did you shill this
Was watching your show
you rug pulled me cotton eye joe
Hey
Hey
Hey
Hey"
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u/SimbaTheWeasel Bronze | QC: ALGO 18 Apr 02 '23
Rip to your friend if he tried something that risky
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u/ebass Permabanned Apr 02 '23
It looked relatively risk free at the time compared to buying shitcoins. Fortunately he never went thru with it, a combination of procrastination and hopefully my advice made him stay away.
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u/SimbaTheWeasel Bronze | QC: ALGO 18 Apr 02 '23
Ahh you’re a good friend man. I saw ppl selling their cars and putting their savings into LUNA for that 19% APY. Only for the thing to collapse to zero in a day. It was a catastrophe.
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u/Seraphinwolf Platinum | QC: CC 36 Apr 02 '23
As much as we always want to feel knowledgeable advice influences positively, mostly it’s luck… The number of times I’ve had friends who invest way more ‘willie-nillie’ ask “Hey how does this one look? I already did the thing!” and when asked about anything deeper than prelaunch price they can’t answer…
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u/the_far_yard Stack a Sat, Stash a Gwei, Bull or Bear, D-C-A. Apr 02 '23
The industry is still somewhat new and losing liquidity through staking doesnt put you in the best of position for a long term strategy in this case. Gotta start treating alts as start-ups and see how they actually move.
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u/IgnisVitae- Permabanned Apr 02 '23
Too big to fail is one of the biggest lie out there. Even big banks are fucking up.
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u/Seraphinwolf Platinum | QC: CC 36 Apr 02 '23
‘Too big to fail’ only applies to things with a gross product and some larger entity with a vested interest in it’s success…
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u/Kindly-Wolf6919 Apr 02 '23
Man, anytime someone asks you to tell them why they SHOULDN'T do something you better stfu cause they've already made up their minds and are talking an aggressive stance towards you.
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u/nick83487 Platinum | QC: CC 829 Apr 02 '23
If it seems too good to be true, it is.
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u/milonuttigrain Platinum | QC: CC 1719 | Pers.Fin.NZ 17 Apr 02 '23
This! And even 5-6% APY, which is comparable to bank interest now. Still NYKNYC.
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u/AutisticGayBear69 Apr 02 '23
I don’t stake but ETH seems sustainable and has a respectable APY. If the value of the token increases that is an additional bonus.
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u/mcbergstedt Platinum | QC: CC 30, BTC 21 | Technology 61 Apr 02 '23
Yep. Even then it’s still speculative investing. Only put in what you’re willing to lose. All it’ll take is one “better” crypto platform and ETH will be dethroned and drop in value.
ETH is competitive and open enough that I don’t think it’ll happen, but I’ve seen tons of legit projects come and go.
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u/Mr_Bob_Ferguson Platinum | QC: CC 445 Apr 02 '23
If it seems too good to be true, it is.
A common saying, but what does this really mean in the world of crypto?
Most people within this sub are expecting most coins to 2X and way beyond in the next bull market.
Is that also considered as too good to be true?
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u/FldLima Permabanned Apr 02 '23
It's definitely a good one to keep in mind when it comes to the crypto world - after all, there are always new projects and investment opportunities popping up left and right, each promising bigger and better returns than the last
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u/Bringerofsalvation Platinum | QC: CC 96 Apr 02 '23
I store all my coins in a cold wallet and sleep better at night for it. FTX was a real wake up call.
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u/SimbaTheWeasel Bronze | QC: ALGO 18 Apr 02 '23
Glad to hear you made the change. Just wish we could get more onboard
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u/Bucksaway03 Platinum | QC: CC 318 | CRO 5 Apr 02 '23
High APY has burnt me too many times as well. Cough UST cough
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u/milonuttigrain Platinum | QC: CC 1719 | Pers.Fin.NZ 17 Apr 02 '23
I lost $600 to Do Kwon's "invention"...
That's another lesson to learn. Expensive one.
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u/Harold838383 Banned Apr 02 '23
Better yet just stay away from exchanges (unless you’re buying/selling) and lending platforms
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u/ihavehugebills Permabanned Apr 02 '23
12% APY certainly isn't enough reward for the risk you take on
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u/pmbuttsonly Platinum | QC: CC 1383 Apr 02 '23
It’s better to earn 0% interest on your crypto versus having zero crypto!
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u/Kappatalizable Platinum | QC: CC 846 Apr 02 '23
Yeah you earn some with that huge APY but you lose even more when the price tanks
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u/milonuttigrain Platinum | QC: CC 1719 | Pers.Fin.NZ 17 Apr 02 '23
> You lose even more
You can lose 100%...
"Unbanked yourself"...
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u/Skank_cunt_42 Tin Apr 02 '23
And after this recent/current bank run, all the more reason to keep your keys over earning 0.001% interest
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u/Wonzky Platinum | QC: CC 986 Apr 02 '23
I think many were humbled by 20% UST
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u/milonuttigrain Platinum | QC: CC 1719 | Pers.Fin.NZ 17 Apr 02 '23
I lost money in this debacle too. Never again.
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u/jhung713 Apr 02 '23
It's the same with LP farming in DEXs. High APR/APY have to come from somewhere and it's either get out quickly if you participate or become exit liquidity.
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u/DAMG808 Tin | CC critic | AvatarTrading 19 Apr 02 '23
Yep, actually it only makes sense imo if you go in with a hefty summ of money and gtfo as soon as people flock in and water down that APR. One big hit, like the first week and out....so everybody left in the dust sadly becomes exit liquidity.
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u/twholst Platinum | QC: CC 58 Apr 02 '23
The old adage still holds true, if something sounds too good to be true it probably is…
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u/Puking_In_Disgust Apr 02 '23
The only time high APY is acceptable in my book is when you get in early on an LP with fixed rewards. Sure, it’s nothing to write home about after a week or two, but I’ve gotten high 3 figures % for a couple hours before just because it was just me and like 2 other people in there and the rewards are just split between whoever’s there.
But anywhere actually advertising that kind of apy is the biggest possible red flag. It’s impossible to sustain that for more than a few hours, if that. LP’s can be fine if you’re familiar and comfortable with the risk of impermanent loss and you trust the platform, but I don’t do lending services at this point whether they’re centralized or decentralized.
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u/Seraphinwolf Platinum | QC: CC 36 Apr 02 '23
The biggest key word ‘advertised’. They aren’t paying for that advertising with money out of no where!
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u/saswordd Tin Apr 02 '23
A lot of us learned this lesson the hard way in the last year or so, good post
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u/skynet_was_right Permabanned Apr 02 '23
High APY usually comes with high selling pressure and inflation as well.
Locked staking VS liquid staking is a fun topic too.
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u/Seraphinwolf Platinum | QC: CC 36 Apr 02 '23
Man, that first time you casually “yeah 180 days isn’t that long…”. :narrator: “It WAS, in fact, ‘THAT LONG’.”
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u/UnexperiencedIT Apr 02 '23
Sometimes I am staking on Binance, sometimes I stake on wallets of that crypto...
Anyway, I always lock them if I am sure that it is safe. Better safe then sorry right...
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u/akselmonrose Tin Apr 02 '23
You have to balance the apy against the emission. There are some sites that show the real apy.
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u/marekdio Tin | r/WSB 11 Apr 02 '23
Yep sure you can gain an APR of 10-15% but when a coin can tank 20% a day it’s not worth the risks
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u/89time Tin Apr 02 '23
For all his faults, I still love InvestAnswers. The amount of charts are unmatched.
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u/Illicitterror Apr 02 '23
Diversity and only a small amount on exchanges. Those rates are way up there no wonder they went bankrupt.
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u/adichandra Bronze | Apple 32 Apr 02 '23
Like i said years ago, you gotta be a dumb mf to stake your coins especially with high apy.
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u/BradVet Silver | QC: CC 487 | VET 71 Apr 02 '23
Everyone loved staking in 2020-21. If you wasn’t staking you were an idiot. I’ve never staked, i’ve never lost my crypto or been scammed. I’m sure next bullrun many more crypto businesses will appear, offer high rates and people will fall for it all over again. Crypto isn’t magic, the interest is high cause its a ponzi scheme that works until the market stops going up.
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u/EveningRough 2 - 3 years account age. 25 - 75 comment karma. Apr 02 '23
Good that i never used cel but actually it's pretty sad that there are zero options for save interest earnings
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u/Gr8WallofChinatown Tin | Economics 11 Apr 02 '23
Everyone in crypto wants to make money off of you, don’t listen to them
High apy is a red flag
Everything in crypto is designed to make money off of you.
99.999999% are shitcoins
The only thing
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u/BrocoliAssassin Silver | QC: BTC 218, CC 105 | CelsiusNet. 25 Apr 02 '23
Also with staking services the other thing to remember is that it may be inflating the coin in order to work.
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u/JustStopppingBye Apr 02 '23
No, they dont have control over the token, link for example. All they did was short it and give you a return.
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u/Ninja_Gogen Apr 02 '23
To be fair, Investanswers does offer a lot of good investing information, too. You have to be the judge of whether buying a certain token or taking is smart based on your own research and risk tolerance.
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u/Computer_says_nooo Tin | QC: CC 18 | DOGE critic Apr 02 '23
Kraken is more trustworthy than any bank
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u/FldLima Permabanned Apr 02 '23
Ah, the old adage of "if it seems too good to be true, it probably is" holds especially true in the world of crypto. Those high APYs may seem tempting, but as the saying goes, "not your keys, not your coins."
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u/street_shark_puppet Apr 02 '23
They are awesome if you get in early and leave first, but the odds of that happening are low
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u/Few_Cockroach_7521 Apr 02 '23
Sir, You are 1000000000% right. I salute you.
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u/Seraphinwolf Platinum | QC: CC 36 Apr 02 '23
“Oh for 1000000000% you’ll have to wrap that first. BTW, you need to unwrap that at end of period with exorbitant gas fee attached.”
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u/Frogmangy Tin | CC critic Apr 02 '23
High apy is your signal to look elsewhere or run the other way
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u/pyxploiter Bronze | QC: CC 21 Apr 02 '23
Cosmos is giving upto 22% APY. Should I be worried about it?
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u/SirAlexanderFerguson Platinum | QC: ATOM 27, CC 16 Apr 02 '23
inflation is 16% so your reward for staking is 6%
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u/3utt5lut Apr 02 '23
I only concentrate on whole number currency increases, not the dollar value attached. I'm in my cryptocurrencies for the very long term, so if I'm adding 1-100 tokens per day, it's a good bet.
The dollar value is going to fluctuate all over the place, but if I'm getting 100 tokens per day and those tokens are worth $1+/each in the future, that's a passive income you can retire on.
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u/Think_Candy3780 Tin Apr 02 '23
Even if you withdrew everything, you are subjected to clawback risk. It’s absolutely insane, everyone who took money out in the last 90 days can be legally obligated to return the money
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u/lordofming-rises Silver | QC: CC 468 | CRO 70 | Superstonk 237 Apr 02 '23
Almost was tempted taking à loan and putting in USDC in CDC in 2021
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u/JudithMoores Apr 02 '23
Don't be blinded by high APY - it's like staring at the sun. Sure, it's bright and shiny, but it's not good for your eyes (or your wallet).
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u/ForsoothPeople Permabanned Apr 02 '23
Lost my fair share somewhere else but the sentiment still stands…
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u/BusinessBreakfast3 Platinum | QC: BTC 28, CC 22 | CRO 5 Apr 02 '23
Just use a hardware wallet
Not your keys, not your coins
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u/AFaded Tin | 1 month old Apr 02 '23
I swear to fucking God I was on r/cc everyday last year warning people that 10% APY, 20% APY, and I even found one coin at 30% APY were scams becausw theybwere unsustainable and people told me to enjoy being poor. Too much stupid money on this subreddit.
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u/rgmundo524 Tin | ADA 50 | Onions 16 Apr 02 '23
If people are dumb enough to keep falling to the same DAMN scam again and again but under a different name then let them.
If they are too lazy to be bothered to learn about how to stake on-chain then they will lose their money and will either learn the lesson or leave crypto. Either way the Blockchain space would be better off.
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u/DBRiMatt The Great Australian Shitposter Apr 02 '23
I like that this is posted shortly after the post about how low LRC's staking reward rate is.
As good as staking can be to increase your asset, you need to know where the rewards are coming from. Transaction fees? Infinite supply printer go brrrr? Treasury fund? Dodgy CEX lending?