Recent reports suggest investors could get a third of staked ADA in half a decade.
Assets running on Proof-of-Stake (PoS) blockchains allow their communities to earn passive income by staking their tokens. Validators utilize these staked assets for block validation to ensure a more secure blockchain.
Several PoS chains, such as Ethereum, BNB, and Solana, promise mouthwatering yields to stakers. Notwithstanding, an in-depth look at Cardano’s staking service indicates that the network might provide one of the best yield generations for stakers.
An unofficial community-based Cardano Twitter handle recently revealed the yield generation analysis.
“If you stake 100,000 ADA on Cardano for 5 years you will earn 30,000 ADA. It is almost 1/3 of the coins with which you started,” the handle highlighted in a tweet Tuesday.
— Cardanians 🚀 stake w CRDNS (@Cardanians_io) October 11, 2022
The community-based account further challenged investors to compare the yields to what they would accrue from storing their assets in a savings bank account. The cryptocurrency community has often highlighted the benefits of storing one’s funds in digital assets rather than leaving them in a bank account.
Data from a spreadsheet shared indicates an approximate value of 0.435% in monthly yield on the amount of ADA staked by investors. This translates to a 435 ADA yield for every 100,000 ADA staked in a month.
Furthermore, there is a 5.43% promised annual yield for ADA staked by investors, per information. Investors expect 5,433 ADA for every 100,000 ADA staked in a year. Additionally, there appears to be a potential 30% yield in five years, as indicated on the spreadsheet.
This data puts Cardano’s staking yields up with top competitors like Ethereum and Solana. Notwithstanding, several proponents have come up to dispel claims made on the spreadsheet, noting that staking rewards have somewhat lowered below expectations over time.
Cardano staking yields have decreased by nearly 50% from the initial 7% two years ago to between 3.5% and 4% in annual percentage yield (APY). Nevertheless, this rate still appears decent to some investors compared to traditional finance.
ADA’s TVL has also seen a decline. According to data from DeFi TVL aggregator DeFiLlama, Cardano’s TVL has decreased by over 76% since the peak of over $320M witnessed in March. Cardano’s current TVL sits at $70.6M as of press time.