Bloomberg Analysts Say Polkadot And Cosmos Outperform Ethereum In Staking Yield

Mike McGlone and Jamie Douglas Coutts – two commodity analysts from Bloomberg Intelligence – say that Polkadot and Cosmos are two altcoins that outperform Ethereum in one specific metric: staking yield.

Regarding fee structure and issuance systems, Ethereum is still the leading platform all over the world that is hard to beat. However, in terms of staking yield, Polkadot and Cosmos are outshining Ethereum.

Polkadot is the interoperable blockchain platform and cryptocurrency which “is designed to allow blockchains to exchange messages and perform transactions with each other without a trusted third party”. Polkadot unites and secures a growing ecosystem of specialized blockchains called parachains.

Cosmos is an ever-expanding ecosystem of interoperable and sovereign blockchain apps and services, built for a decentralized future.

“As a result of Ethereum’s dominant market share in fee income and sound monetary (issuance) policy, capital deployment in the crypto economy is likely to start pricing risk relative to Ethereum’s real/adjusted rate (yield). On Bloomberg’s list of layer-1 crypto assets, only two networks have real yields that trade with a positive spread to Ethereum’s benchmark rate of 5.03%. Polkadot trades at a 0.77% premium while Cosmos is at a 0.10% premium. The assets which trade at negative spreads may be victims of mispricing. Inflation/issuance for these assets may need to undergo a radical reduction, similar to Ethereum, in order to attract more capital.”

Two Bloomberg also noted that the staking model is a specific dimension in the crypto industry and could be compared to corporate bonds.

“The emergence of crypto as an asset class in conjunction with a yield component presents a new set of considerations for investors when assessing the risk/reward opportunities in this space. Given the volatility and newness of the demand for smart contract use, staking assets could be considered as equivalent to junk bonds. Yields for proof-of-stake are similar to corporate bonds in that they’re tied to the fees/cash flows of the network/company.”

According to this report, the staking yield in Polkadot and Cosmos and the entire crypto market will increase volume in next year – 2023 – when central banks improve the liquidity.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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