Staking is a process where holders commit their tokens to help validate blockchain transactions on a network in return for a fee.
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KR1 said it had generated 54,194 ATOM tokens since June 2019, of which it had sold 37,274 at an average price of US$4.51 each.
The firm said it plans to maintain its staking of a large majority of the ATOM tokens to generate revenues going forward, and although its returns have been strong since its initial staking, a higher than initially anticipated percentage of ATOM was staked by other participants due to the popularity of the network, which led to nominal staking returns being lower than originally estimated in the company’s forecasts in May 2019.
However, KR1 said it is taking a “long-term view” on the ATOM price and was implementing a strategy of not liquidating its accruing staking yields and postponing the realising of yields if the price fell below a certain threshold.
The firm said this strategy had allowed it to realise “a more favourable” price of US$4.86 per ATOM token versus an average daily price of US$4.07 if it had sold its proceeds on a daily basis.
“Our strategy to hold onto our ATOM below a certain price threshold has greatly improved our average exit price. We’re making the very most of this successful investment and believe that in the uncertain times ahead, income from a yield-bearing portfolio could be very significant”, said KR1 managing director George McDonaugh.
KR1’s shares were trading at around 3.3p on the NEX exchange on Tuesday afternoon.