Today I took what for me is drastic action. I unstaked my Level-Up CRO in the Crypto.com app. It's a big decision because my account has been grandfathered into the Level-Up Plus tier with 2550 CRO, which is far less in value today than it was when I staked. The Level-Up tier requires $500 worth of CRO, which it was worth back when I originally staked it. I'll discuss why I made my decision and what I expect to happen now that I've done it.
I often become paralyzed by too much analysis. Lately, I've decided to do what many people do, which is to do something and worry about the fallout later. I don't know if there will be fallout, mind you. It's a reversible decision, although it would be a bit more difficult to undo. I think it was a rational decision to unstake, and the numbers should demonstrate why.
Crypto.com offers membership tiers for staking different amounts of CRO or for subscribing. You can certainly use the service without staking or subscribing, which would cost you full retail on all transactions.
My membership was at the PLUS level, which offers 2-3.5% cash back rewards on spending with their debit and/or credit card. There are other benefits that come with this first level upgrade, but aren't all that useful unless you do your banking on their platform. For example, you get higher interest (3.25% APY) on cash deposits, paid in CRO.
The Level-Up Pro tier is where things start to get interesting. Unlike PLUS, the PRO tier pays staking rewards for the CRO that is locked up. The difference is that the lockup goes from $500 worth of CRO to $5000 worth of CRO. This is a 10X greater commitment, which rewards the user. For that commitment, the user also gets more cash back on spending and higher interest on deposited cash.
I'll skip the other tiers as they are presently unreachable to me and expand on the same concept, staking $50K worth of CRO and stake $500K worth of CRO. Greater cash back on spending, etc. . . .
Several months back, Cronos governance voted to offer tiered staking rewards.
Flexible staking - 4.61% APY
1-Year staking - 6.61% APY
2-Year staking - 8.61% APY
4-Year staking - 11.61% APY
It's not until recently that Crypto.com added the feature allowing users to change staking tiers to their app interface. The feature is still not available on the Cronos onchain app, but will be released mid-September.
The 4-Year staking option is the reason that I have decided to unstake for the Plus tier, which offers no staking rewards at all. At current valuations, the rewards would not be much. But once a crypto bull market kicks in, the staking rewards could be more meaningful. The idea is to take the 2550 CRO that were staked for the card and put them into the 4-Year staking to start compounding.
Something else that Crypto.com instituted is the option to upgrade the Level-Up tier via subscription rather than staking. For $4.99/month or $49.90/year, you can enjoy all the benefits of PLUS without having to lock up your CRO. For the PRO tier, the subscription goes up to $29.99/month or $299.90/year.
If you don't have a large amount of CRO, it's unlikely to make sense to subscribe. You would need to spend like a fiend on the debit or credit card to justify the subscription from the cash back rewards.
In my case, it makes sense to unlock the 2550 CRO, combine it with the other CRO I have, and stake the full 11,000 CRO for a 4-Year term, yielding a bit over 100 CRO per month in rewards. At the present price of $.05834, that's more than the cost of the monthly subscription. And things will only improve by staking more CRO, or with a good bull market run.
There is a similar point at which it makes sense to pay the monthly subscription for the PRO tier out of pocket rather than from card staking. That point, at today's price, is roughly 45,500 CRO, which would yield enough to cover the $29.99 cost every month. Although the PRO level membership does pay rewards for card staking, the rate is much lower than the rewards for the 4-Year staking. It makes more sense to upgrade with cash flow from the staking rewards than by directly staking for the card.
One important detail about this decision is that unstaking from Level-Up has a 28-day wait period before the CRO becomes available. Had I been receiving staking rewards, that would have been a loss. However, the PLUS level doesn't pay out card staking rewards, so there is no difference. I will, however, not receive any cash back rewards on purchases with the debit card until I decide to either stake again or subscribe for a Level-Up tier.
I'm still undecided whether I should subscribe to the PLUS level now, or wait until all of my CRO is in 4-Year staking. About half of it is locked in Airdrop Arena, which pays out other tokens instead of CRO in return for staking. My CRO won't be completely released from Airdrop Arena until November. The main disadvantage of subscribing is that I'd be paying to be able to earn cash back on more spending. In some form, it makes sense as I'd be offsetting the cost of the subscription with the cash back rewards.
An alternative would be to take the $4.99 each month and buy more CRO. This works out at the present CRO price. However, should the price of CRO increase significantly, I might be better to rely on free CRO rewards from staking and cash back.
After making the decision and executing on it, I feel much better as I can just let it go from my mind.
#crypto #cryptocurrency #cro #staking #crypto-com #defi #blockchain #investment #finance
