r/Stellar • u/Revenantjuggernaut • 1d ago

Discussion Brand new

Hey everyone! Brand new here was on the site looking through it. Was curious what’s the best staking wallet for lumens?

8 Upvotes

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u/KodineDreamin 1d ago

Staking is a term used for proof-of-stake blockchains (like Ethereum or Solana).

Stellar isn't proof-of-stake but has similar DeFi platforms that provide yield. Check out Blend.capital, FxDAO, and Aquarius.

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u/schlaechter665 1d ago

Can you explain for a noob how this works. Is there any risk in loosing everything?

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u/KodineDreamin 1d ago

There's always risk.

Staking in proof-of-stake blockchains is essentially using the token of the blockchain to do "work" on the blockchain; you receive a reward by providing the token to do said "work". The risk here is the blockchain gets hacked or turns off, or the value of the token drops drastically.

DeFi on Stellar like Blend.capital where you can lend/borrow whilst receiving yield - currently 13% APY just to lend out USDC. Practically 0 risk since USDC is stable.

You'd have to risk overleveraging your position to lose everything. For example, you have 100 USDC and borrow an unstable currency called 'XYZ'.

If 'XYZ' goes up in price, you make profit - in essence you longed it. If 'XYZ' goes down in price, you lose a portion of your 100 USDC. If it keeps going down in price and eats up your position, you risk losing your entire position if you don't provide more liquidity.

Leveraging is a risk that requires knowledge and experience. If you are noob in that field, I'd recommend reading articles that explain the step-by-step process to get up to speed (we were all noobs once :).

Though, you don't have to leverage to benefit from the DeFi products - just providing USDC on Blend is at 13% APY right now. Traditional banking gives you maybe 1-2% (which they then use your money to go and leverage elsewhere to make even more profit for themselves). DeFi is definitely the future since it allows anyone in the world to be their own bank, and not have to be at the mercy of the monopoly of the current system.

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u/schlaechter665 1d ago

13% sounds nice. what happens with my usdc? how can someone generate 13% APY with my USDC without me having any risk?

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u/KodineDreamin 19h ago

The 13% APY comes from taking the APR from those borrowing USDC (those who are borrowing have to pay interest).

Lenders provide their token while borrowers pay them interest. The decentralized protocol changes the % based on how much borrowing and liquidity is in the pool.

More information on that here: https://docs.blend.capital/users/lending-borrowing/lending

Again, there's always going to be risk but my example of USDC was to show that you don't have to do crazy trades or leverage (even though you could with added risk) to generate a good yield without doing any work other than providing liquidity.

If you are well-versed in the tools, can time the market, and can endure the risk, then you could technically borrow more to leverage your position for more profit (which is what some people actually use the liquidity for and what traditional banks have always done - where do you think the bank makes the 1-2% they offer for your savings account?)

But that added leverage = more risk of being liquidated if the market doesn't go in your favor. I.e., you borrow XLM to long it, but the market goes down, or you borrow XLM to short it, but the market goes up, etc.

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u/Revenantjuggernaut 23h ago

This here. I literally started Aug 14th when I called my brother and wished him a happy birthday and he asked me how my crypto portfolio looked. Wich I laughed at him id always wanted to jump in but just never did. So started then. Been learning candlesticks and the indicators and stuff… posted one vid and fb makes me a “creator” my boy hits me up talking all this DeFi stuff that I keep hearing but clearly know nothing about it all. Hes staying it’s the future. With stable coins and this and that I stay informed so although he’s piss drunk im looking into it and hear about liquidity pools and I learned then that stellar wasn’t a pos coin. So now with this information can you try to help me understand DeFi and how to make money on that

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u/KodineDreamin 19h ago

Making money in DeFi takes a bit of time because it does require knowledge and experience in order to not make mistakes.

If you've ever traded a stock or have some trading background, its a bit helpful but still requires patience when youre on blockchain due to self-custody (you're in total control, mistakes are irreversible), FOMO (fear of missing out so you make a trade based on impulse), different tools and naming for each product (got to ensure you understand the tools you are using to prevent accidents).

DeFi on Stellar can be quite straightforward however, you provide liquidity and receive yield. Easiest way to make money with the lowest risk.

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u/Revenantjuggernaut 19h ago

Ok my buddy was hammered drunk when he was trying to explain things to me. So the stellar lumen is what’s used as currency within the stellar verse like lobster I downloaded that one… it give you access to DeFi apps or whatever is it. Please if you could.

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u/KodineDreamin 18h ago

Im confused what you're asking for lol. Are you asking how everything works? Theres way better information already posted that explains what XLM is or how it works with wallets or DeFi apps, better information than I can post.

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u/Revenantjuggernaut 18h ago

Lmao I guess yeah

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u/KodineDreamin 18h ago

Lol fair enough. Idk how helpful AI can summarize it tor you but to be quite honest, if you arent well versed in blockchain then DeFi is just going to be more confusing. You want to use these tools with some understanding in order to prevent losses (no point in understanding DeFi if you havent used a wallet before or transferred funds etc). If I were you id ask chatgpt or any other AI to explain the basics of the Stellar blockchain and its token XLM. After that i would ask it to explain how to use Blend.capital, though its quite straightforward about providing liquidity. Understanding crypto addresses, how to transfer funds etc, that takes a bit of time that only comes from knowledge and experience. Rushing into something that involves money is a sure way to lose it all; take some time to build up knowledge and you will be rewarded one way or another!

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u/Revenantjuggernaut 15h ago

I understand everyone telling me to stick to cb and this and that. Since I already replied to a comment like this on another sub Reddit lol ima be just really compact it. Dunno if I mentioned ima stay at home dad now. Prior USFS. But I just catch on to things very quickly. Been actively trading literally from 6am until my body says no more. I do have some guidance there more like the bumpers you use when you bowl hah. So yah!! Long story short already have some other wallets downloaded im very interested in long term liquidity projects. I’ve been studying candle sticks and indicators and this and that already swapped some crap. OH!! Check this I had to change my vpn so I could access Ondos’s website and it’s very impressive I suggest everyone take a look at that. But yah I feel pretty comfortable

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u/Revenantjuggernaut 15h ago

And it didn’t end up compact at all so I apologize