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Author: Admin | 2025-04-28
However, if you pick a reputable pool with a decent number of members, pool staking is a great way to earn a passive income. Though you won't make as much as you would by staking independently, that doesn't mean the rewards aren't worth it. So, pool staking sounds easy and profitable, but are there any risks associated with it? Well, this is where impermanent loss comes in. What Is Impermanent Loss in Crypto Staking? By nature, the crypto industry is incredibly volatile. A coin can double or halve in value in a matter of hours, and there's often no knowing where a coin's value will head next. This is a common risk for those staking their crypto. Say you stake crypto that's worth $5 per token, and you stake 50 of these tokens. This means you've staked $250 worth of crypto within a pool for a set period of time. However, during this time, the token price will certainly fluctuate slightly, and it might even fall significantly. So, if the token's value drops from $5 to $2.50 while you're staking, you're going to end up earning less of a reward than you had anticipated. It's essentially just the risk you take when staking your assets in this way. Therefore, it's always important to do some research around your prospective staking asset to see if it regularly suffers from huge hikes and falls in value, or if it's rumored or predicted (widely) to be heading for a drop. No amount of research will ever guarantee that you don't suffer an impermanent loss, but it can reduce the chances considerably. Pool Staking Is a Great Option for Smaller Crypto Owners If you've only recently started with crypto investments or want to get started in staking but don't have a huge fund, pool
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