Differences between locked staking and flexible savings is a must know to earn well.
These days a lot of exchanges are more innovative on how their users earn passive income.
Locked staking has helped a lot of crypto users make money easily.
This is made possible at a very low level of risk.
Flexible savings have also played a great role too.
Knowing the differences between them will really help you earn more passive income.
More of such differences will be discussed in this guide as we proceed.
- Differences Between Locked Staking And Flexible Savings
- 1) Locked Staking Offers Better APY Than Flexible Savings
- 2) Flexible Savings Accepts More Crypto
- 3) Redeeming Crypto In Flexible Savings Is Faster
- 4) Stake Rewards Are All Lost When You Early Redeem On Locked Staking
- 5) Part Of Stake Capital Is Lost When You Early Redeem On Locked Staking
- 6) You Can Only Use Auto Subscribe On Flexible Savings
- 7) Valuation Drain Is Lower With Flexible Savings During Bearish Season
- 8) Fees Are Higher In Staking Pools
- 9) Entry Limit Is lower In Flexible Savings Than Locked Staking
- 10) Flexible Savings Is Always Available For Use
Differences Between Locked Staking And Flexible Savings
1) Locked Staking Offers Better APY Than Flexible Savings
Both ways of earning passive income are absolutely incredible.
But no matter how good everything is, there is always a king.
When it comes to this, locked staking is always the king here.
This is because locked staking offers a better apy as compared to flexible savings.
This makes the whole process more rewarding to the users.
This is clearly shown in a typical instance of the locked staking and flexible savings apy of cardano.
As seen, the locked staking apy of cardano is 8.38%.
When it comes to the case of flexible savings, the reverse is always the case.
This is one of the most painful difference between locked staking and flexible savings.
This is because the apy gets lower as compared to what you get from staking.
On the flexible savings, the apy you can earn from cardano is just 0.48%.
This translates to a lower profit when using flexible savings.
This is due to the huge difference in gap between the apy offered by the two of them.
On the locked staking, you get 8.38%.
While you only get 0.48% on the flexible savings of ADA.
2) Flexible Savings Accepts More Crypto
When it comes to staking, the accepted crypto is affected by the consensus mechanism.
This is because staking only supports cryptocurrencies built on the proof of stake consensus mechanism.
This makes locked staking work only for proof of stake crypto.
This limits the number of crypto that you can earn passive income from with staking.
This is because other cryptocurrencies use consensus mechanism like proof of work.
Such cryptocurrencies include bitcoin.
This great difference between locked staking and flexible savings has taken passive income from some crypto users.
But when it comes to flexible savings, the list of accepted crypto is always very long.
This is because flexible savings accepts crypto from all consensus mechanisms.
These include proof of stake, proof of work, proof of authority, etc.
This gives people the flexibility of earning passive income from a lot of their cryptocurrencies.
3) Redeeming Crypto In Flexible Savings Is Faster
Flexible savings has a great speed when it comes to some task.
Such tasks include redeeming your crypto from the savings plan.
In redeeming your crypto from the savings plan, you have two options.
One is the fast redemption and another is the standard redemption.
With the use of the fast redemption, you will receive your redeemed crypto in seconds.
And this reflects in your spot wallet immediately.
When it comes to the use of locked staking, the reverse is the case.
This is due to the delay that is accompanied before you receive your redeemed crypto.
Sometimes, it takes more than 72 hours.
4) Stake Rewards Are All Lost When You Early Redeem On Locked Staking
When you redeem your crypto from a locked staking, you face some loss.
One of the loss is due to the delay as it takes some days before you receive your crypto.
The delay can be overlooked by some people at times.
The more painful one is that you lose all the staking rewards that you were paid within the staking period.
In the case of using flexible savings, you get to keep all the rewards you were paid when you redeem.
The only time you lose rewards is when you use the fast redemption method.
You only lose the reward for one day since you did not complete the day.
You still keep the rewards earned from previous days of the savings plan.
But when you make use of the standard redemption method, you keep all the savings plan profit till the last day you redeemed.
5) Part Of Stake Capital Is Lost When You Early Redeem On Locked Staking
Anytime you are staking and you want to take out your stake capital before the end of stake duration, you face some consequences.
Some of the consequences include delay in payout and loss of all staking rewards.
Apart from that, you still get to lose more.
This is because you lose part of your stake capital too.
This is very painful if you had accrued a lot of staking rewards within the stake duration.
For example if you staked 100 ADA for 30 days and was paid a staking reward of 10 ADA.
If you want to early redeem before the end of your stake duration, you will incur two losses;
- You will lose all accumulated staking rewards
- You lose pare of your staking capital to the sum of the total accumulated staking rewards
Remember 100 ADA was staked to receive 10 ADA as staking rewards.
When you redeem, you will only receive 90 ADA.
This is because 10 ADA from all the staking rewards have been taken back to the staking pool.
Also 10 ADA has also been deducted from your stake capital as a fine for not waiting till your staked duration expires.
But when it comes to flexible savings, you do not incur any lose of your capital.
6) You Can Only Use Auto Subscribe On Flexible Savings
Another locked staking vs flexible savings difference has to do with who supports auto subscribe.
Auto subscribe is an automated function that increases your savings profit.
This option makes it easier for you to consistently earn even if you forget to reactivate your savings plan.
As of the moment, this function is only available on the savings plan.
It is yet to be available on the locked staking plans.
The unavailability of this feature on the locked staking plans make people lose out of earning great passive income.
This is because sometimes, the locked staking plan expires without the user knowing when they do not check.
This cuts off the earning of staking rewards until you manually re-subscribe to a new staking plan.
Only then can you continue to earn staking rewards.
With the flexible savings, you are saved from this headache.
This is because re-subscription is automated with the auto-subscribe function.
This keeps you earning passive income even if you do not log into your account in years.
7) Valuation Drain Is Lower With Flexible Savings During Bearish Season
Have you ever seen clear signs that a market is definitely going bearish?
When this happens, the best thing that is done to avoid loss is to sell your crypto to stable coins.
This is very possible if your crypto are in the spot wallet.
If they are in the savings plan where they are generating passive income, you can still get them out.
This can be easily done by using the fast redemption option on the flexible savings redeem.
This helps you to take it to your spot wallet and sell them easily to stable coins.
This saves you from the merciless dip.
The problem comes if you were making use of locked staking.
This is where you cannot survive the dip very fast.
This is because of the delay that is associated before your funds will be returned to your spot wallet.
Sometimes it might take up to 72 hours.
That leaves you at the mercy of the dip severity.
8) Fees Are Higher In Staking Pools
No one lets you into their staking pool any how without you paying some fees.
This fee is charged by the taking pool as part of the funds used to run the staking pool.
In some staking pools, the fees are higher.
In some staking pools, the fees are less.
When it comes to the use of flexible savings, you save a lot from paying fees.
This is because you pay no fees while making use of flexible savings on binance.
This helps you to make more profit at the end of the day.
9) Entry Limit Is lower In Flexible Savings Than Locked Staking
When it comes to earning passive income from staking or savings, there is always an eligibility requirement.
The difference between locked staking and flexible savings is that they do not have the same limit.
The limit that exist for the locked staking is usually higher than that of the flexible savings.
This makes it a little restrictive for some people to make use of the locked staking if they do not have much crypto.
An example of this is seen on the shiba staking pool and the SHIB flexible savings.
On the SHIB staking pool, the minimum amount required is 1,000,000 SHIB crypto tokens.
Not every crypto user may have up to this amount of shiba inu.
Due to the insufficiency, they cannot stake on the shiba inu staking pool.
But on the SHIB savings plan, the minimum required is 100,000 SHIB crypto tokens.
This is 90% lower than the amount of shiba inu required on the staking pool.
This makes it a lot easier for more people that can afford 100,000 shiba inu to easily earn passive income from the flexible savings.
10) Flexible Savings Is Always Available For Use
Some of the issues you may come across when you want to subscribe on locked staking is the sold out caution.
This is very frequent especially when you try to use the long stake duration.
The long stake duration which is mostly the 90 days stake duration offers more profit from staking.
This is because the longer the stake duration, the better the earning apy it carries.
This leads to a wild level of competition from a lot of people who want to stake.
This makes the long duration to be easily filled up making it unavailable for late comers.
But in the case of flexible savings, the case is always different.
This is because you always have an available slot on the flexible savings.
This makes it a lot easy for you to earn passive income from your crypto.
Making use of the locked staking brings great value at the end of the day.
Also, the flexible savings also has its own benefits as well.
Knowing the differences between locked staking and flexible savings on binance will help you make better decisions on which to use.
This helps in getting you optimum earnings from your passive income journey.