Strategies For Staking Pools 2022. Amp Subsidy to Seed Pay Out Capacity for Flexa-Enabled Apps.

1 min read

What are the new staking pools? 

It is one of the most misunderstood things I have come across in the world of crypto, and with new staking pools on the way, this should help people develop a strategy to be ready for them. 

Staking pools allow users to keep their funds in a hardware wallet, where they can still access them. These pools operate similarly to the Proof of Work (or PoW) protocol but are only available on platforms that use the PoS mechanism instead of the PoW mechanism.

A staking pool allows multiple stakeholders (or bagholders) to combine their computational resources to increase their chances of being rewarded. In other words, they unite their staking power in verifying and validating new blocks, so they have a higher probability of earning the block rewards

If you missed it, the team proposes a governance proposition to increase the number of tokens available for a subsidy. It is a proposal that adds an Amp subsidy to seed spending capacity for upcoming Flexa-enabled apps. That is their way of telling you new Flexa-enabled apps (plural) are coming without revealing too much. 

A new staking pool could begin at 100% or even higher APY. What does this mean, and should you pay gas fees to unstake from a 4% pool and jump to this one? That 100% isn’t going to last an entire year. You aren’t going to double your amount of tokens. 

That 100% PER YEAR is only .27% per day or .0029% per 15-minute period. Less due to compounding, but we will keep it simple. It will only take days (hours?) for the word to spread like wildfire, and everyone gets all excited and jump to this new pool so they don’t “miss out” on the introductory APY. 

What will happen is this 100% APY might very well drop to less than the pool you moved from while your original collection doubled its APY overnight because half of those staked have left. 

“Gee, it is worth paying $60 gas (two transactions) on my $1000 of tokens since I will get 100% and double my tokens with the new pool.” It doesn’t work that way.

It is beneficial for those who aren’t very financially savvy yet and maybe don’t have a lot of tokens staked. 

Remember, 100% APY is only .27% each day. You won’t even increase your tokens by 1% in three days, and the APY will surely drop to a base level of much less.

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