Toncoin (TON) tops the chart among the top 50 cryptocurrencies by annual staking returns. The coin captured the top spot, as investors saw it as a better option to stake their tokens, as the network did have many upgrades to the gas fee and throughput rates. After making a vertical rise, the coin has hit resistance below the $3 level.
TON offers an 18.8% annual percentage rate for staking
Priced at $2.5, TON has topped the chart among the top 50 cryptocurrencies with its highest annual staking returns. TON offers 18.80% APR (Annual Percentage Rate) for staking, while TAO and CC, which captured the second and third places, are not too far from TON. This means you earn or pay 18% interest over the course of one year on the original amount, without factoring in compounding.
So if you invest $1,000 at 18% APR, you would earn about $180 in a year, assuming the interest is calculated simply and not reinvested. If it’s a loan, it means you would owe an additional 18% of the borrowed amount annually.
In real-world finance and especially in crypto, APR is often used to show the base return rate, but the actual earnings can differ if interest is compounded, in which case the effective return becomes higher and is referred to as APY (Annual Percentage Yield).
Do the recent upgrades have to do something with rewards?
TON’s achievement of topping the chart comes just a few weeks after the network made a few important changes: reduction of gas fee and increase of throughput rate.
Network upgrades like lower gas fees and higher throughput on Toncoin (TON) can indirectly affect staking rewards, but not in the way most people first assume. The staking APR itself is usually defined by the protocol’s tokenomics (how many new tokens are issued, validator incentives, and staking participation rate), not directly by transaction fees or network speed. However, these upgrades can strongly influence the conditions that shape staking returns.
The improvement in network speed along with the reduction in gas fees will make TON more useful, efficient, and cost-effective to be used in payments, applications, and DeFi. Increased use of TON will increase the network’s demand and, in turn, the demand for its native coin.
As more users and developers enter the ecosystem, investors often gain more confidence in the long-term sustainability of the chain. That confidence is a key driver behind staking behavior: people are more willing to lock up tokens in a network they believe will grow in value and adoption over time, even if the APR itself doesn’t change immediately.
Yields are high when fewer people stake
The other important variable is the stake participation ratio. With many proof-of-stake protocols, the more people participate in staking, the lower the yield they receive because there will be fewer shares of the reward pool. However, when fewer people participate in staking, the yield increases because the reward pool is distributed among fewer stakers.
Therefore, if more people start using the TON upgrades, the APR on the platform could be squeezed over time, regardless of the strong fundamentals of the network.
However, apart from just the reward yield, stakeholders have strategic considerations. The fact that a network is fast, efficient, and cheap means that it has a good utility value. This can mean an appreciation in the price of the native token. In most cases, capital gains are a more important reason to stake coins than the interest rates.
Therefore, while investors might not be staking TON coins for the high APR, they may do so to gain from the future growth and adoption of the coin.
To summarize, TON upgrades do not have a direct impact on the APR but can affect the staking activity indirectly through network improvements and growth.
TON hits resistance just below $3
Meanwhile, after having a vertical rise, TON has hit an obstacle just below the physiological resistance level at $3. Priced at $2.50, TON is overbought, and the market could correct the prices.
The relative strength index indicator, which gauges if the coin is undervalued or overpriced, shows that TON is extremely overvalued at this point. As such, a market correction could be coming for TON very soon. This means there could be a price retracement, and TON could fall below $2 if the support at $2.5 fails to hold it.