Russian version is published at hub.forklog.com.

Historically, the evolution of blockchain technology could be divided into several stages. The stage of the Bitcoin creation could be described as a decentralized and self-managed system.

However, decentralized applications based on Bitcoin were quite limited due to the scalability issues. It was a push towards development of new systems and led to the creation of Ethereum. That moment could be treated as a starting point for natural evolution of crypto. DeFi (Decentralized Finance) is currently gaining momentum, which results in new digital assets, financial smart contracts, DApps and various new protocols all together creating a new decentralized financial ecosystem within WEB 3.0.

One of the blockchain development directions is so-called Proof-of-Stake (PoS) consensus algorithm. It has proven to be a good alternative to systems running Proof-of-Work (PoW). Novel DeFi environment allows most holders of PoS tokens to stake through trusted providers and receive guaranteed passive income.

The Enecuum team conducted a market analysis among prominent PoS coins and staking service providers and shares the results with readers.

Important points

During this analysis, we have selected 20 largest PoS coins in market from Coingecko portal.

The Enecuum team made a series of plots to discuss the results of their analysis.

We have used the following factors in our analysis: market capitalization; total amount of funds involved in staking; annual rewards received from staking throughout the network; the annual staking reward that a coin holder can expect for USD $1,000 invested.

Market capitalization

As for the analysis date, EOS is leading the market capitalization in PoSs with 2.5 billion US dollars.

The Tezos project has the capitalization of approximately 1.06 billion, and it is behind EOS with a gap of more than two times. Next, TRON and Cosmos, both close to a billion dollars.

The median corresponds to Waves, Lisk, IOST, ICON, Energi and Tomochain, with a capitalization of just under one hundred million to forty million dollars.

The list is closed by NULS, Reddcoin, Wanchain and WAX, and each of them has below twenty million dollars capitalization.

The total market capitalization of the 20 largest coins is more than 6.5 billion US dollars.

Total staked funds

The next analyzed PoS-related metric is the total amount of funds locked. The dynamics follow the previous plot behavior: the unconditional leadership of EOS with approximately US $1.3 billion in stake. The TRON coin fell one position below, yielding about US $400 million to Cosmos.

Algorand, Waves, Energi, Qtum and Lisk projects are following with from US$94 to 29 million.

NULS, Aion, Wanchain and Reddcoin are at the end of the list with less than US$10 million frozen funds in staking.

The total amount of funds locked in stake at the moment is US$ 3.4 billion dollars.

Annual rewards

Next, we analyzed total amount of funds that the entire network will receive for the year with current ROI. According to the results, EOS holds leadership of US $57.5 million dollars paid to the creators of the blocks annually.

In contrast to previous metrics, EOS Cosmos and Tezos have US$ 55.3 and 53.5 million dollars, respectively. TRON (which was in the Top 5 on past charts) was only at 12th place.

Next, come NEM with Waves, IOST, Lisk, and ICON, with annual payments ranging from US$ 5.4 to US$ 2.3 million.

The smallest amount of funds is received by Reddcoin wallets (~US$ 185 thousand), AION nodes (~US$ 364 thousand), Wanchain (~US$ 439.4 thousand) and WAX (~US$ 643.6 thousand).

The total amount received in the 20 largest networks are more than US$ 230 million dollars.

ROI for delegation of 1000 USD

This metric shows how much the token holder can gain if he invests the equivalent of one thousand of US dollars in staking.

Interestingly and absolutely in contrast to previous plots, the Icon project leads. Here, an investor can receive almost US$ 200 per year. Algorand closely follows with an annual ROI of US$ 177. Energi closes the leading group, where you can get about US$ 150 per year.

Previous leaders, Tezos and Cosmos, settled in the range of US$ 80–100 per annum. EOS was in the top five, but officially for the delegation of funds the reward cannot be received in principle, since this contradicts the platform rules. For this study, the average annual ROI was taken among several creators of “buying votes”, offering rewards to EOS token holders in exchange for voting. NEM and Lisk follow with ~US$ 40 expected after one year of staking. TRON closes the list with only US$ 7.56 as a reward.

Staking providers

The potential of staking sparked the DeFi companies. Many of those boosted a start to their services, allowing token holders to invest their own funds in the company’s validator nodes and receive passive income. Moreover, different exchanges also got involved, however, they fall beyond the scope of this analysis due to the lack of statistic data publicly available.

Further, we list some of the most successful solutions according to the Staking Rewards and study the amount of staked funds among them. Broadly, the main indicators are own funds, received from holders and their sum.

Note, the following results are approximate since many companies do not provide exact figures on related topics.

Provider own funds

Everstake, Wetez and stake.fish are the leaders in terms of the amount of funds that the staking services provider has as part of PoSs. Totally, these services hold approximately US$ 4 millions of their own investments locked in staking. In comparison, Cobo Wallet, SNZPool and POS Bakerz, invested a around US$ one million dollars in total.

The total amount of funds locked in PoS is US$ 4.78 million dollars.

Holders funds

Overall, the amount of funds received from asset holders is expected to be more than providers’ own investments.

InfStones leads in this race being one of the 21 block manufacturers in EOS with US$ 739 million dollars. In comparison, SNZPool, their closest competitor with EOS node, has approximately US$ 142 million from holders. The end of the list is filled with Wetez, Stake Capital, Cobo Wallet and POS Bakerz, in which the amount ranges from US$ 5.5 to 1.7 million dollars.

The total amount of funds received from coin holders is approximately US$ 993 million dollars.

Total provider funds

The results are similar to previously achieved ones due to a great advantage of a working EOS block publisher node at the stacking provider. The addition of the provider’s funds to the previous chart does not change the overall picture except some percent values.

The total investment in staking between the ten providers represented was about a billion US dollars.

Conclusions

In 2019, staking is the multibillion-dollar sector of the digital asset market. Looking at the news about the largest cryptocurrency exchanges taking part in staking and the planned transition of the Ethereum network to the Proof-of-Stake protocol, it can be argued that the interest in this method of investment will grow.

The amount of funds staked by staking providers in the total volume of staked coins is 28.7%, which indicates the threat of centralization and confirms the criticism of the “money makes money” approach that underlies the Proof-of-Stake consensus.

The Enecuum team plans to reflect the situation in the staking market on the monthly basis, monitoring the emergence of new applicants for leadership and protocols that are attractive to potential validators and delegators.

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