- Mack Lorden grows his crypto portfolio by putting coins in a high-yield savings account or staking.
- The platform he uses varies based on the coin, while the interest earned is in the form of crypto.
- A chart shows where he says he has each crypto and the most recent amount of interest each offered.
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The volatility associated with the crypto market is nothing short of a Six Flags roller-coaster ride — some enjoy the dips and use them to increase their positions, while others regret the moment they got on.
Just recently, bitcoin tumbled 50% within a month after reaching a record high, taking the rest of the crypto market down with it.
But for a crypto investor like Mack Lorden, price action doesn’t matter as much because his gains aren’t tied only to the charts. He earns cryptocurrency passively by holding them in high-interest savings accounts, which lend to borrowers in exchange for a percentage of interest.
He also stakes them, which involves taking part in the process of verifying transactions and validating a blockchain network by pledging crypto. Those who pledge their tokens and are selected to help validate the blockchain are rewarded in the form of more tokens.
Lorden told Insider he’d been investing in crypto since 2017. He’s now the founder of Faceless Crypto, an online community that teaches investors ways to leverage the crypto market. He shares most of his informational content on TikTok, where he starts off each video with a signature wave and a “hallo” under the username Macklorden.
For Lorden, staking is a way to grow his crypto portfolio without using hard-earned dollars. And he’s not alone: Ether holders have staked more than $13 billion worth of the crypto on the ethereum 2.0 network, according to data from Etherscan cited in a recent JPMorgan note. As of July 5, network users had staked 6.1 million ether, up from 5.3 million a month earlier, the data showed.
The staking industry as a whole is expected to generate $40 billion in revenue for token owners and exchanges by 2025, up from an estimated $9 billion, according to Kenneth Worthington, a JPMorgan financial analyst. He said major upgrades to ethereum’s network from a “proof-of-work” to a “proof-of-stake” protocol would attract more investors.
But earning on crypto isn’t as straightforward as picking a high-yield savings account at a traditional bank. Interest rates are based on the platform and the coin or token being staked. Rates could also fluctuate more frequently, and holdings are usually auto-compounded, which means cryptos get re-staked, Lorden said.
As for coins staked directly on a blockchain’s network, rates differ based on the selected pool. Finally, gains are often paid out in the form of the crypto being held, and investors who wish to cash out in dollars remain at the mercy of the exchange rate.
Below is a chart that shows the platforms Lorden says he uses for each coin and the approximate annual percentage rates or yields they offer.
While this is a conservative way of earning crypto, Lorden says it’s not completely without risk.
Like any decentralized-exchange platform, these networks are vulnerable to a variety of catastrophic events, such as hacking or being overleveraged, Lorden said.
He added that most of these platforms did have insurance policies that protect investors. But he sticks to the popular saying “not your keys, not your crypto,” which highlights the benefit of owning private keys that secure access to funds.
Lorden mitigates risk by spreading his coins out across several platforms. He also said he viewed staking as less risky than crypto savings accounts, specifically noncustodial staking, which means the crypto belongs completely to the investor.