The Essential Guide to Maximising CRO Investment with Crypto.org DeFi
How to get the highest return when investing your CRO.
[Article updated on 2nd April 2022]
In this article, I will tell you:
- The differences between Crypto.com and Crypto.org
- The differences between ERC-20 CRO and Native CRO
- Overview of Decentralised Finance (DeFi)
- The available options for making interest from staking CRO
- How to manage your CRO securely
- How I get the most return from my CRO
I could have kept this article really simple, but people always ask about DeFi and blockchain, so I’ve included some technical background as well!
Crypto.com vs Crypto.org
I’m putting this at the top of this article because it’s important and not many people are aware.
Crypto.com relates to:
- The company
- Centralised services
- The CRO cryptocurrency, based on the ERC-20 token standard, running on an ERC-20 based blockchain
Crypto.org relates to:
ERC-20 CRO vs Native CRO
There are 2 versions of CRO — ERC-20 and Native. ERC-20 is Ethereum based, Native is the version that can be stored on the crypto.org blockchain.
ERC-20 has high gas fees (so costs a lot of money when transferring crypto around), Native CRO is very cheap to move and transact with, plus it has many other benefits.
When you move CRO out of Crypto.com to DeFi on the Crypto.org blockchain, it gets converted from ERC-20 format to Native CRO format. When you do this, it must do a ‘move and convert’ process, so it might take a little longer to appear in your DeFi wallet than moving it from one native CRO wallet to another — it’s usually just a couple of minutes though.
What is DeFi?
Decentralised Finance (DeFi) refers to systems where financial products are available on public decentralised blockchain networks, open for anyone to use, rather than going through ‘middlemen’ like banks or brokerages.
Some Pros of DeFi:
- It’s more secure (as you have full control of your assets i.e. the private keys to your wallet)
- Permissionless, so anyone can run a ‘compute node’ to help run the overall system and get rewarded for doing so
- Far less chance of manipulation, theft, etc.
- Harder to close or diminish services
- They utilise blockchains, where a full record of transactions is available to view — these records cannot be altered or manipulated
Some Cons of DeFi:
- Not as easy for people to use as ‘centralised services’ (but not that difficult either)
- Changes to the environment must be agreed by consensus, so may not always be approved
Where can you make Interest on CRO?
CRO (the cryptocurrency from Crypto.com) can be stored in multiple places to earn interest:
Each one is detailed below.
Within the Crypto.com app, is the Earn feature. This allows you to deposit CRO at a lock-in period:
- Instant withdrawal = 2% APR
- 1 month deposit = 4% APR
- 3 month deposit = 6% APR
These options are available:
- Hard-stake. Stake CRO for 180 days (6 months) for 10% APR, paid daily
- Soft-stake. This is useful if you have CRO available whilst allocated to an order, or just available. You can withdraw at any time. The current rate is up to 2% APR (25th July 2021)
- Supercharger. A simple liquidity mining platform — deposit CRO for 45 days then receive a reward token (not CRO) over a 45 day period. See the Supercharger page for details
If you hold your CRO on the Crypto.org DeFi platform, you will get up to 12% APR (as of 18th August 2021).
The DeFi APR is variable, based on this:
The number of tokens minted each year is defined in the blockchain. This gives you a given amount of token release each block. The released tokens are shared by the delegators. You can simplify this by the calculation:
Inflation / bonded_ratio where inflation is the % of circulating supply release each year and bonded_ratio is the % of circulating supply staked
The inflation rate itself is a variable as well. For example, the current inflation rate is about 2.11% (started from 2% in the first block) and block reward at 84.060 CRO at block 1964946.
Validators are servers that manage the transactions on the blockchain, providing consistency and security. Anyone can set up and run a validator server but only the top 100 validators are eligible to receive a reward.
To hold CRO in Crypto.org DeFi, you need one of these:
- Crypto.com DeFi Wallet. This is easy to use and integrates well with the Crypto.com app, the disadvantages are that it has a limited choice of validators (not a significant issue) and does not have hardware wallet support. It securely links to your account on the Crypto.com app, allowing easy transfer of CRO between your Crypto.com app account and your DeFi wallet (download, instructions)
- Crypto.org Chain Desktop Wallet. This software provides the greatest flexibility e.g. you can choose any validator (download, instructions)
- Ledger hardware Wallet. This is the most secure way to store your CRO (instructions)
- Crypto.org Wallet Client (command line). This is for special use-cases, not relevant for most people (instructions)
Useful Notes on Moving CRO to DeFi Wallets and Delegating CRO with DeFi Validators
Link your Crypto.com App account to your Crypto.com DeFi Wallet
In the DeFi Wallet app, go to Settings | Connect to Crypto.com app
Follow the instructions to link your accounts.
Move CRO from the Crypto.com app to the Crypto.com DeFi Wallet
In the app go to ‘Accounts | Crypto Wallet | CRO | Transfer | Withdraw | Crypto.com DeFi Wallet)
This costs 0.001 CRO (a tiny amount), so when moving; ensure you always have at least this much available.
Delegating CRO with DeFi Validators
Delegating, redelegating, voting and other actions cost 0.0002 CRO.
I suggest leaving 0.1 CRO in your DeFi wallet to ensure you have funds available for these actions. If you don’t have funds available to perform these actions, you will just have to move some CRO from your Crypto.com app to the DeFi wallet — not a big deal, just inconvenient.
Delegate Wisely (and keep an eye on the validator)
Use this list of top 100 CRO validators to select a trustworthy validator. I choose ones that:
- Charge 0% commission
- Have 0 missed blocks
- Have the highest APR possible
- Have a high score
- Do not have a disproportionally high number of delegators
On Reddit (where I am very active) and other forums, you will see the same few validators being recommended. People mean to be helpful, but they are doing a disservice because decentralised environments work best when there are a large number of trusted validators, with well distributed voting rights. When some validators have a high weighting of voting rights (determined by the number of delegators), the environment gets a bit less decentralised. This is why I don’t recommend specific validators.
If I have any issues or concerns with my current validator, I will redelegate all my CRO to another validator. You can switch validators at any time without penalty.
Someone has made a ‘CRO-DeFi-Warner’ application to notify you when a validator changes the commission rate or gets jailed. It can also notify you when you reach a predefined total rewards limit.
Withdrawing (unbonding) Your CRO
When delegating your CRO with a validator there is a 28 day unbonding period when you come to withdraw.
How Safe is Staking?
Who owns the Keys?
When you store your CRO with a centralised body (e.g. an exchange), you don’t have the keys to your CRO, so you don’t have full access to your CRO.
When you use DeFi, you have the keys, so you have full ownership (and responsibility) of your CRO.
The wallets article on my website explains the different categories of wallets available, the levels of risk associated with each and when to use them. Software wallets on your phone are very safe, but for the maximum peace of mind, it’s best to use hardware wallets as they offer the greatest level of protection.
I personally use and recommend the Ledger Nano X hardware wallet.
What if the Validator I use goes Bad?
The DeFi network incentivises validators to perform well (i.e. 100% uptime and 100% transactions reliably processed). If a validator does not meet this criteria, they can be jailed and slashed.
A validator can get jailed for two reasons:
- Double sign
Liveness issue occurs when the validator failed to sign 50% of the blocks in a 5000 blocks sliding window.
Upon a validator committing a liveness issue, the validator is jailed for 24 hours. During this time, delegators will not earn any interest on their CRO.
Double sign occurs when a validator attempts to provide multiple signatures of the same block height.
This is considered as a serious fault and upon committing the validator will get jailed forever and got slashed for 5% of the total stake.
This slashing is applied to all the delegations (both self delegation and delegation from other accounts).
Can I Lose CRO from Staking?
I’ve written this point to clarify the ‘Double Sign’ point above.
There is a possibility that you can lose up to 5% of your delegated CRO (see https://crypto.org/docs/chain-details/module_overview.html#slashing for details).
This is highly unlikely as the validators are incentivised to perform well and punished if they don’t.
How do I get the Most Return on my CRO?
The Tools I Use
I perform all DeFi actions in the Crypto.org Chain Desktop Wallet and I store my CRO in a DeFi wallet which is accessible via my Ledger Nano X (follow these instructions to get set up — note Bluetooth pairing with a desktop is currently not available, so you will need to use a USB cable).
This setup provides the highest level of functionality and security.
Maximum Cashback from the Card
I use the processes I describe in my articles, to get the most reward from the card:
- The Essential Guide to the Visa Debit Card from Crypto.com
- 4 UK Debit/Credit Card Purchase Passive Reward Schemes — No Investment Needed
I perform these tasks daily (or every couple of days) to gain the most compound interest:
- View the Crypto Reward Tracker for an easy overview of my funds and accumulated rewards (CRO interest)
- Move all CRO I accumulate in the Exchange and the app (via direct buy, card cashback, etc.) to my DeFi Wallet (accessible via my Ledger Nano X)
- Using the Crypto.org Chain Desktop Wallet, I withdraw my reward (interest), then re-stake it back into the same wallet
Note: I like to re-stake the interest daily, but you don’t lose much if you choose to do it weekly. You can use this staking calculator to see the gains you will receive when staking at different intervals.
Keeping an Eye on the Validator
Every few days I check the validator I’m using on this list of top 100 CRO validators, to ensure that my validator is still charging 0% commission, has 0 missed blocks, has the highest APR possible, has a high score and generally looks healthy. If I have any issues or concerns, I will redelegate all my CRO to another validator.
Auto Purchase CRO (monthly)
I buy some CRO every month (using the ‘Recurring Buy’ feature in the app). This is my way of ‘dollar cost averaging’ — I don’t care what the price of CRO is, I just buy it (i.e. ‘set it and forget it’)
To set this up in the app, go to:
- CRO logo
- Recurring Buy
- Setup Recurring Buy
DeFi can seem a bit daunting as the apps aren’t as simple to use as centralised apps where everything is in one place and done for you. But the rewards and security offered make it worthwhile.
I recommend playing around with just €5/£5/$5 and get familiar with the applications, how to delegate with validators, how to withdraw CRO, etc. before putting in any serious amount of money.
- Sign up to Curve and get £5
- Sign up to Crypto.com with referral code qu80wtyk0i This can be used within 5 days from having your account KYC approved. Get $25 when you stake for a card
- Sign up to the Crypto.com Exchange with referral code qu80wtyk0i, you will get $10 if you stake at least 1,000 CRO and $50 if you stake at least 5,000 CRO
- The Essential Guide to the Visa Debit Card from Crypto.com
- Curve adds Security, Functionality and Rewards to your Existing Debit and Credit Cards
- The Essential Guide to the Crypto.com Exchange
- The Essential Guide to Farming, Harvesting and Mining Cryptocurrencies
- This is why I’m Massively Excited for the Growth of Crypto.com
- The Essential Guide to Discounted Gift Cards with Crypto.com Pay
- The Essential Guide to Generating Some Money the Easy Way, Guaranteed
- The Essential Guide to Saving Money and Building Wealth in the UK
- 5 UK Debit/Credit Card Purchase Passive Reward Schemes — No Investment Needed