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Deconstructive Analysis of Blockchain Derivatives: How to Operate Spot and Staking?




Staking is almost the most special product in the blockchain world, which provides predictable cash flow and relatively fixed income. Even such products, which are similar to traditional financial market bonds, still hide risks that are easily overlooked. It is also for these reasons that this type of product has not become the most mainstream product in the blockchain world. In the traditional financial market, the scale of bonds is much larger than that of other financial products. What is the reason for this? How to operate Staking and spot will give data and structural analysis results in this article.


Staking structure analysis

Almost all blockchains under the POS consensus mechanism have Staking services. From the famous EOS to various projects that have not heard of the name, Staking is provided, but the mortgage rate, yield and cycle are different. Should such an asset be traded or held at all? Is it more appropriate to hold stock? To answer these two questions, it is necessary to understand what staking is from the structure of staking before further judging whether it should be held and under what conditions. Taking the most famous EOS as an example, we will disassemble the EOS Staking.

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According to public data, the basic information of EOS is as follows: EOS market value: $ 2,623,135,000 Staking nominal rate of return: 1.78% (annualized) Staking rate: 58.4% Highest price (in the past year): $ 8.56 Lowest price (possible value): $ 0 Average price (In the past year): $ 3.86 Assuming that EOS is bought at the average price, that is, the price at T0 is 3.86. Now compare if you hold the spot and will hold the EOS for staking. A comparison of the benefits of the two situations. First give the price and income table.

A-share closing: Shenzhen Stock Exchange Blockchain 50 Index fell 2.58%: Golden Financial News, A-shares closed, the Shanghai Composite Index closed at 3446.98 points, closing down 2%, Shenzhen Component Index closed at 14350.65 points, closing down 2.33%, Shenzhen Stock Exchange District The Blockchain 50 Index reported 3549.63 points, closing down 2.58%. The blockchain sector closed down 2.62%, and the digital currency sector closed down 3.17%. [2021/8/17 22:19:30]

It is difficult to see the difference intuitively based on the table numbers alone. We draw the PAYOFF graph to compare the two products more intuitively.

Please note the part of the red box, the comparison is summarized as follows:

The concept stocks in the blockchain listed in the United States rose more and fell less: Today, the US stock market closed, and the concept stocks in the blockchain listed in the United States rose more and fell less. Canaan Technology closed up 0.53%, Renren closed up 1.82%, China Network Zaixian closed up 2.04%, Secoo closed up 1.86%, Xunlei closed down 2.37%, Cheetah Mobile closed down 0.51%, Lanting Jishi closed up 10.16%. [2020/10/17]

The slopes shown by spot and staking are different (only considering the price factor, staking has higher returns and lower losses)

The starting point is 0 (when the EOS price returns to zero, the spot and Staking also return to zero, and the maximum loss is 3.86)

The higher the price of EOS, the greater the profit gap between staking and spot

The returns of both spot and staking are linearly related to the EOS price and the slope does not change with price changes (other derivatives may change the rate of return due to factors such as time and price)

From the analysis of EOS price factors alone, staking EOS is obviously better than holding EOS alone. Staking has lower losses and higher returns, and as the price rises, the returns will be greater than spot. But the reality is that the Staking rate of EOS is only 58.4%, neither accounting for more than 80% of Staking, nor is it not the highest among all projects. This result contradicts the advantages of Staking. We further analyze this phenomenon.

Voice | Professor Lu Tingjie of Beijing University of Posts and Telecommunications: 5G plays a connecting role in the blockchain: On November 3, the third China Enterprise Reform and Development Forum opened in Jinan. Lu Tingjie, a professor at Beijing University of Posts and Telecommunications, explained the relationship between blockchain and 5G. He said that the blockchain has a distributed storage, so its storage efficiency is very low and slow. Some people predict that the arrival of 5G will solve the distributed storage of blockchain, because it can solve large-scale concurrent communication, and there are thousands of nodes, which can achieve high-efficiency storage. He explained that 5G plays a connecting role in the blockchain. Ultimately, it will bring about the enrichment of data assets, so data-related storage, cloud computing, edge computing, etc., are the final profits. [2019/11/4]

How to operate spot and staking

Analyzing EOS price data alone cannot fully understand staking. We take both time and price factors into the analysis, and get the historical statistics of EOS in the past year, so that we can better analyze and judge how to operate this type of asset. We deduce the probability distribution based on the market situation in the past year, and then explain the specific operation method according to the statistical principle.

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We get the daily closing price from the exchange to make a market chart:

Since there is no uniform standard for statistical description data such as income calculation and standard deviation, in order to simply express trends and main ideas, we only use prices as distributions. According to the closing price data in the past year, we can get the main statistical description data as follows: standard deviation: 1.41 mean: 3.87 median (median): 3.56 mode: 3.70 maximum value: 8.57 minimum value: 1.77 range: 6.80 grouping Number: 24 Group distance: 0.28 According to the situation of each group, we draw a data histogram:

According to the statistical description data and the data histogram, we can see that the distribution is not a normal distribution. is a positively skewed, low-peaked distribution. Most of the points are evenly distributed and scattered.

In order to take a closer look at the positive and negative situation of the income, take the average value of 3.87 as the hypothetical buying point, and observe the positive and negative situation of the income, as shown in the figure below:

1 on the vertical axis in the chart means: EOS price is higher than the average price; 0 means: EOS price is lower than the average price. The horizontal axis is date.

A few points can be observed from this figure:

The price of EOS is lower than the average price in most cases

Periods of above-average prices are short

The cycle in which the EOS price is higher than the average price in the past year is:

According to the above data, it can be seen that EOS is the representative, and the following results are summarized:

EOS price fluctuates wildly

The number of EOS price increases or higher than the average price is small, and the cycle is very short

The nominal rate of return of staking given by EOS is low

According to feedback from various nodes and project parties, when the price of the underlying asset (such as: EOS) rises, the amount of Staking will increase sharply. In other words, people are more willing to staking when the price rises.

Because the price of EOS fluctuates violently, and the continuous rising cycle is short, and people are more willing to staking when the price rises, once the staking occurs, because the price of EOS falls, staking receives more EOS, but loses money on USDT. Generally speaking, because the market risk of EOS itself is much higher than the income of staking, the staking of investing in EOS must be a loss.

But this is not the final conclusion. If we are not for the purpose of trading but long-term investment, then the income of staking is higher than that of holding spot. This point has been explained in the comparison chart of Staking and spot.


Due to the different purposes of holding assets, there are differences in specific behaviors and benefits. If the purpose is for trading, then Staking should not be held. Because the nominal return of staking cannot cover the market risk of the asset. If the purpose is long-term investment, Staking is a good choice, because you will get the nominal rate of return of Staking, and use long-term holdings to hedge against short-term market fluctuations.


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