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What Are Staking Coins? A Guide to Earning Passive Income
You’ve learned that staking is one of the most popular ways to earn passive income on your crypto assets. The concept is powerful: by locking up your coins, you help secure a network and get rewarded for it. This immediately leads to the most important question for any investor: which staking coins should I choose?
The crypto market offers thousands of options, and it can be overwhelming. As your guide, I'm not going to give you a "hot tip" on a single coin. Instead, I'm going to teach you how to think in categories. Understanding the major types of staking coins will empower you to make smarter, more strategic decisions for your portfolio.
Category 1: Layer 1 Blockchain Coins (The "Blue-Chips")
This is the most important and well-established category of staking coins. Layer 1s are the foundational blockchains—the digital highways upon which the rest of the crypto world is built. When you stake a Layer 1 coin, you are participating directly in the security and consensus of the entire network. These are generally considered the "blue-chip" assets of the staking world.
- Example: Ethereum (ETH): As the largest smart contract platform, staking ETH is the bedrock of the staking ecosystem. It is a bet on the long-term success of the entire decentralized application space.
- Example: Solana (SOL) or Cardano (ADA): These are other major Layer 1s, each with its own unique technology and community. Staking these coins supports their respective ecosystems and is a bet on their ability to compete for market share.
Staking Layer 1 coins is a vote of confidence in the fundamental infrastructure of Web3.
Category 2: DeFi Governance Tokens
The next major category comes from the world of Decentralized Finance (DeFi). Many of the largest DeFi applications—like decentralized exchanges or lending platforms—have their own native tokens. While some of these can be staked for a share of the platform's revenue, a primary use case is "governance." By staking these tokens, you often gain the right to vote on important proposals that shape the future of the protocol.
- Example: Uniswap (UNI) or Curve (CRV): Staking tokens from these top decentralized exchanges can give you a voice in their governance.
- Why it's different: The reward here is not just financial; it's also about having influence over a key piece of the DeFi ecosystem.
How to Choose a Good Staking Coin: A 3-Point Checklist
Regardless of the category, you must do your own research. Here is a simple framework to evaluate any potential staking coin:
- Look Beyond the APY: An extremely high Annual Percentage Yield (APY) can be a red flag. It might be fueled by high token inflation, which can devalue your rewards over time. A sustainable yield from a strong project is often better than a risky, triple-digit APY.
- Analyze the Network's Health: Is the project actually being used? Look for metrics like daily active users, transaction volume, and a growing number of developers. A healthy, active network is more likely to be a good long-term bet.
- Understand the Token's Utility: What is the coin used for besides staking? A strong staking coin should have a clear purpose within its ecosystem, whether it's paying for transaction fees (like ETH) or governing a protocol (like UNI).
Your First Step: Acquiring the Assets
Staking is a powerful strategy for long-term investors, but your journey always begins with the first crucial step: acquiring the right assets. Before you can stake anything, you need to buy the coins on a secure and reliable platform.
Ready to build your staking portfolio? Discover and acquire a wide range of top-tier staking coins on the BYDFi spot market.
2025-10-18 · 3 months agoHow to Trade Interest Rate Announcements: A Crypto Guide
In the early days of Bitcoin, the only thing that mattered was the block reward halving. Today, the crypto market marches to the beat of a different drum: The Federal Reserve.
Macroeconomics has invaded crypto. When the Fed Chair (currently Jerome Powell) walks up to the podium, billions of dollars in market cap can vanish or appear in seconds. For a crypto trader, ignoring these announcements is like sailing into a hurricane without checking the weather forecast.
Understanding how to trade these events—specifically the FOMC (Federal Open Market Committee) meetings—is a critical skill for navigating modern markets.
Why Interest Rates Move Bitcoin
The logic is simple. Bitcoin and risk assets (like tech stocks) thrive on "cheap money."
- Low Interest Rates (Dovish): Borrowing money is cheap. Investors take risks to find yield. Capital flows into crypto.
- High Interest Rates (Hawkish): Borrowing is expensive. Investors prefer safe returns like Treasury bonds. Capital flows out of crypto.
Therefore, every FOMC meeting revolves around one question: Will rates go up, down, or stay the same?
The Three Phases of the Trade
Trading these events isn't just about the moment the number is released. It is a three-act play.
1. The Anticipation (Buy the Rumor)
In the weeks leading up to the announcement, the market "prices in" the expectation. If traders expect a rate cut, Bitcoin often rallies before the meeting. You can track this sentiment using the CME FedWatch Tool. Smart traders often position themselves on the Spot market early, looking to sell into the volatility.
2. The Announcement (The Knee-Jerk)
At exactly 2:00 PM ET, the decision is released. Algorithmic bots react instantly.
- The Fake-Out: Often, the initial candle is a fake-out. The price might spike up violently, trapping longs, only to crash seconds later.
- Strategy: Do not trade the first minute. The spreads are wide, and the slippage is high. Wait for the dust to settle.
3. The Press Conference (The Real Move)
30 minutes later, the Fed Chair speaks. This is where the real trend is established. The market listens to the tone. Even if the rate decision was bad, if the Chair sounds optimistic about the future (dovish), the market can rally.
Signals to Watch
You don't need a PhD in economics to trade this. Watch the DXY (US Dollar Index).
- If the Fed is Hawkish, the Dollar strengthens (DXY goes up), and Bitcoin usually drops.
- If the Fed is Dovish, the Dollar weakens (DXY goes down), and Bitcoin usually flies.
Managing the Risk
Volatility during these events can be extreme. It is not uncommon to see Bitcoin move $2,000 in a 5-minute candle.
If you are not comfortable managing this risk manually, consider staying in stablecoins or using Copy Trading. By copying professional traders who specialize in macro events, you can leverage their experience without staring at the charts yourself.
Conclusion
The days of crypto being decoupled from the traditional economy are over. Interest rates are the gravity of the financial world. By learning to read the Fed's signals, you stop gambling on random price movements and start trading the fundamental flows of global capital.
Ready to trade the next FOMC meeting? Register at BYDFi today to access the liquidity you need when volatility strikes.
Frequently Asked Questions (FAQ)
Q: How often does the Fed announce rates?
A: The FOMC meets 8 times a year, roughly every 6 weeks. These dates are scheduled in advance and act as major volatility events for crypto.
Q: Should I use leverage during the announcement?
A: It is highly risky. The "whipsaw" price action (up and down rapidly) often liquidates both high-leverage longs and shorts within minutes. Low leverage or Spot trading is safer.
Q: What is a "Hawk" vs. a "Dove"?
A: A "Hawk" wants high rates to fight inflation (bad for crypto prices). A "Dove" wants low rates to stimulate the economy (good for crypto prices).
2026-01-09 · 2 days agoOn-Chain vs. Trading Volume: How to Analyze Crypto Market Activity
In the cryptocurrency market, "volume" is the most cited metric after price. When Bitcoin rallies, analysts immediately ask, "Was there volume behind the move?"
But in crypto, the word "volume" can refer to two completely different things. Unlike the stock market, where all trades settle through a central clearinghouse, crypto activity is split between centralized exchanges and the blockchain itself.
To truly understand market sentiment, you must distinguish between Trading Volume and On-Chain Volume. Confusing the two can lead to a disastrous misreading of the market.
What is Trading Volume? (The Speculative Engine)
Trading volume (or Exchange Volume) refers to the total amount of an asset bought and sold on exchanges like BYDFi.
Crucially, the vast majority of this activity happens off-chain. When you buy Bitcoin on a centralized exchange Spot market, no transaction occurs on the Bitcoin blockchain. Instead, the exchange simply updates its internal database, debiting the seller and crediting the buyer.
- What it measures: Speculation, liquidity, and short-term interest.
- The Pro: It is fast and cheap.
- The Con: It can be manipulated. "Wash trading" (where a trader buys and sells to themselves to inflate numbers) is easier to hide in exchange volume figures than on the blockchain.
What is On-Chain Volume? (The Truth Layer)
On-chain volume refers to transactions that are validated and recorded on the blockchain ledger. This happens when a user withdraws funds from an exchange to a cold wallet, pays for a service, or interacts with a DeFi protocol.
Because every transaction incurs a network fee (gas), on-chain volume is rarely fake. It costs too much money to spam the network with high-value transactions just to create an illusion.
- What it measures: Economic utility, adoption, and "Whale" movements.
- The Signal: If price is dropping, but on-chain volume is spiking, it might indicate that big players are accumulating assets and moving them to cold storage (a bullish signal), rather than selling them.
The NVT Ratio: Valuing the Network
Sophisticated traders combine price and on-chain volume to determine if a coin is overvalued. This is known as the Network Value to Transactions (NVT) Ratio.
Think of it as the P/E (Price to Earnings) ratio of crypto.
- High NVT: The network value (Market Cap) is high, but the on-chain volume is low. This suggests the price is driven purely by speculation (bubble territory).
- Low NVT: The market cap is low relative to the massive amount of value moving through the network. This suggests the asset is undervalued.
Why You Need Both
Relying on just one metric gives you a blind spot.
- If you only look at Trading Volume, you might be fooled by a wash-trading bot on a low-cap altcoin.
- If you only look at On-Chain Volume, you will miss the massive price-moving events that happen on derivatives exchanges, where billions of dollars in volume can liquidate positions without a single satoshi moving on-chain.
Conclusion
To act like a professional analyst, you need to synthesize both data points. Use Trading Volume to gauge short-term price action and liquidity. Use On-Chain Volume to confirm the long-term health and adoption of the network.
When the two align—high speculation matched by high utility—that is when the sustainable bull runs happen.
Ready to add your volume to the market? Register at BYDFi today to access deep liquidity and transparent trading data.
Frequently Asked Questions (FAQ)
Q: Can on-chain volume be faked?
A: It is possible but expensive. Since every on-chain transaction requires a gas fee, faking volume costs real money, making it much less common than fake volume on unregulated exchanges.Q: Where can I see on-chain volume?
A: You can use block explorers (like Etherscan or Blockchain.com) or specialized analytics platforms like Glassnode or Dune Analytics.Q: Does high trading volume always mean the price will go up?
A: No. High volume simply indicates high interest. It can occur during a massive sell-off (panic selling) just as easily as during a rally. It confirms the strength of the trend, not the direction.2026-01-08 · 3 days ago
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