How to Earn Passive Rewards with IOTA: Staking, Swirlstake, and Virtue Protocol Insights

Sean Williams
IOTA

IOTA has recently achieved a significant milestone with the successful implementation of its much-awaited Rebased Protocol mainnet upgrade. This update brings full programmability and staking capabilities to the network, offering holders new ways to earn rewards. As previously reported by CNF, staking now requires as little as 1 IOTA, with an Annual Percentage Yield (APY) ranging from 10% to 15%, making it an attractive option for those looking to capitalize on the potential growth of IOTA.

Staking with Validators and the DeFi Dilemma

With the introduction of staking, IOTA holders now face an interesting dilemma: should they stake their tokens with one of the existing Validators or venture into the decentralized finance (DeFi) ecosystem? According to ID.Iota, staking with a Validator could yield up to 30% APR. However, the new upgrade also opens up the possibility of earning staking rewards while actively participating in the DeFi space. This creates a unique opportunity for IOTA holders to diversify their earnings strategy by exploring both staking and DeFi avenues simultaneously.

Liquid Staking with Swirlstake and $stIOTA Tokens

One of the most exciting new features enabled by the Rebased Protocol is Liquid Staking, which allows IOTA holders to stake their tokens through Swirlstake, the network’s first liquid staking protocol. By staking with Swirlstake, users can earn $stIOTA tokens, which accumulate rewards passively over time. However, it’s important to note that Swirlstake takes a 10% fee on the staking rewards. These $stIOTA tokens can then be utilized in various ways, with one of the most promising opportunities being Virtue.Money’s stablecoin minting functionality. Users can mint vUSD using the coin or $stIOTA, which can be further employed in DeFi strategies to generate passive income, such as offering vUSD on Deepr Finance for an attractive 6.6% APY.

Also Read: IOTA Identity Framework: Powering a Trustless Future for People, Organizations, and Machines

Maximizing Earnings through DeFi Strategies

For those looking to maximize their IOTA holdings, ID.Iota suggests several DeFi strategies using vUSD. One approach, known as “Loop,” involves using stIOTA as collateral to mint vUSD, then leveraging the stablecoin to buy more the coin. This strategy could potentially multiply earnings, especially if IOTA experiences a price surge. However, ID.Iota warns of the risks, as users could face liquidation if the market moves unfavorably. Another option is “LP,” where users can provide IOTA and vUSD as liquidity to earn LP-Yield, offering a more stable investment strategy compared to using stablecoins alone.

With the coin Rebased Protocol upgrade, the ecosystem is now poised for greater flexibility and earning potential. By combining staking, liquid staking, and DeFi strategies, IOTA holders have multiple avenues to explore, all while benefiting from the network’s growing programmability.

Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.

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