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Are banks going to collapse?

Are banks going to collapse?

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We have certainly come to live in interesting times. The banking system must seriously rethink its future. I will even go on to say that by continuing its operations in the form it operates now, it should even become truly concerned about its future…

It is not that people do not want to use banks or do not need them. However, taking advantage of clients while treating them as a ‘dull’ and passive money-making machine, unable to act or logically think, has taken its toll. And not only that.  Abusing their privileged position and their image of a trustworthy public institution, as well as continuously charging their clients (who after all contribute directly to their success)  with unsubstantiated costs of banking operations has led to the situation where people have become distrustful and cautious. 

Sounds harsh! Perhaps. It is, however, high time to start calling things as they are. ‘They who sow the wind, reap the whirlwind.’ This old saying, which is rooted in the Old Testament (Hosea 8:7), perfectly defines this so-called process, a process that has lasted for years. Now, however, it seems to have ripened and is starting to bear fruit. 

There is something else that happened as well. Up to now the financial market was airtight, closed, unavailable for Mr Average. And I am not only talking about being aware of the existence of specific financial instruments and the possibility to use them to make money. Since the appearance of blockchain and Bitcoin people have realized that banks are not the only institutions able to meet their ever growing and expanding financial needs. They have become aware that there is an alternative channel, a more perfect and fairer one, more humane. And when it turned out that blockchain is the best medium to record and carry even the most intricate and complicated financial operations and transactions in the whole world, the Defi market was born. From that moment on virtually every person in any part of the world has had access to instruments which until now were reserved only and exclusively to financial leviathans, banks, brokers, and the richest people in the world.

Whether people want to use them is yet another question. Possibilities are plentiful, indeed, but there are also many dangers. The greatest of all certainly is the lack of knowledge all sorts of scammers thrive on. 

Cryptocurrency companies and projects are putting more and more effort into making the use of such instruments as transparent and most of all as simple as possible. One of the examples of simple solutions is the option of the so-called staking. It is worth mentioning that Kanga Exchange clients have already been able to use this interesting form of growing their capital for the past 18 months with the KNG token. It is also worth noting that at Kanga Exchange the KNG token holds the function of a driving force, which similarly to a heart in living organisms brings live-giving oxygen to each cell of this unique ecosystem, even the smallest one.

What staking is and how it works is perfectly explained in one of the articles on our blog, called ‘Passive income with KNG tokens!’ In reality staking may be compared to a bank deposit (though this is of course an oversimplified explanation), the difference being that those who generate cryptocurrency value share their income equally with those who deposit offering them rewards for staking that can reach a few up to even a few hundred percent. 

You must of course stay extremely alert and cautious. The fact that such solutions exist and are widely available does not mean that each of them is a safe investment. That is why you need to carefully examine each project that attracts your interest. It is especially worth checking the foundations – how the profit is achieved? Is the market it operates in realistic and able to bring profits? Is the value we intend to stack sufficiently liquid? Is its market sufficiently deep?…

It all seems quite complicated. Yet a little common sense is enough to realize that interest at the level of a few hundred percent annually should trigger not only a vision of getting rich quickly, but at least one or even a couple of red alert lights! Let us come back, however, to the solution offered by Kanga and make a short analysis. How does it work and where do funds for paying the interest on staking come from? 

All fees generated on Kanga exchange and in the whole ecosystem (trading on the exchange, local and on-line currency exchange offices, payment gateway, billing systems for miners, loans secured with cryptography – as you can see there is quite a lot and Kanga is not done with making new solutions and instruments available to us) come as KNG tokens. Each time a transaction is carried in Kanga ecosystem, a fee, which is charged from the buyer and the seller, is generated. This fee in turn is automatically changed into KNG tokens. Thanks to this process there is constant demand for KNG, since the demand is generated by the whole ecosystem. 

KNG tokens can also be staked in the exchange PoS (Proof-Of-Stake), which allows you to make additional KNG profits, refinanced from the fees brought in by the users of Kanga ecosystem solutions. Rewards for staking are shared among them automatically each day. 

How does the Proof-Of-Stake (PoS) mechanism on Kanga Exchange work?

The mechanism serves to encourage KNG token holders to temporarily freeze all or some of their KNGs (on a special PoS account) in exchange for the right to have their share in the daily profits. Each day Kanga accumulates tokens charged as fees for all operations in a special pool and next, at the end of the day, the pool is proportionally shared among all KNG holders who have their KNGs deposited in a PoS account. 

Tokens accumulated in a PoS account are excluded from classic trading. You can, however, withdraw them from the PoS at any moment, though you will only be able to access the freed funds after about 48 hours. Such structure of the staking solution is meant to limit the volume of tokens in trade, which in result has a beneficial effect on their price. You can familiarize yourself with the Proof-Of-Sake: Kanga Coin guide here. 

Now that you know what staking is in Kanga Exchange and where funds for daily rewards come from, in order to have continuous increase of new tokens and make passive profits all you need to do is log in at the Kanga exchange website (you may use this link: https://trade.kanga.exchange/auth/?path=/pos) and choose the PoS tab from the top menu. 

To deposit your KNG in your PoS it is enough to enter the amount or use the MAX amount button and accept the transfer with the DEPOSIT KNG button. That’s all! You must admit this is much easier than opening a bank deposit. And it can even be easier! You can use a very convenient Kanga Wallet app to manage your KNG tokens. The app is available for Android and iOS

Anywhere you are, whenever you have access to the Internet, you can log into your Kanga Wallet, move to the Proof of Stake tab and deposit a chosen amount of KNGs to your PoS. At midnight UTC time zone your tokens will go to the pool, which will guarantee your participation in the daily share of profits form the exchange. Simple, isn’t it? To benefit from the compound interest, i.e. get interest on interest and make even more money, it was enough to run your application every day and add the funds you accumulated to the PoS system. 

However, adding KNG to the PoS pool on daily basis may have seemed a wearisome task. Amidst all the work and responsibilities you have on your mind it has probably happened that you simply forgot to perform this uncomplicated operation. And here Kanga once more rose to the challenge. To make our lives easier Kanga modified its PoS mechanism a few days ago in such a way that adding KNGs to the PoS may be automated. All you need to do is enable the ‘Autodeposit to PoS’ feature in your Kanga Exchange account. This may be done by moving a dedicated slider. This feature may also be enabled in the Kanga Wallet app with a slider you can find in the AUTOTRANSFER section. 

We have already said much about the staking solution: about its simplicity, wide availability to any person, about how it works, but… we have not said anything about whether it is worth the trouble. Is it something we should be interested in? Let us then address this question. And the question is: 

Does it pay off?

I have been using the option of staking on Kanga Exchange practically from the very beginning. I must, however, be honest and say that I started doing that more out of curiosity than conviction. At that time this solution was not as popular or as available as it is now. You may be surprised by the fact that Kanga developed, described and launched this solution as one of the first cryptocurrency exchanges in the world! And I wanted to see how it works and find out if it pays off. That is why I scrupulously added my KNG to the PoS pool for over a year. I must admit right away that I happened to forget to do it on several occasions. And since the several occasions can be counted on one hand, I think it did not affect the results of my observations in a particularly negative way. Apart from making daily transfers of my rewards for staking to my PoS, every day I also calculated the percentage the reward constituted in the blocked funds for a given day. The result of the observations carried between 1 March 2020 and 28 February 2021 are presented in the chart below. 


For 365 days, so for a full year, every single day I received KNG tokens as rewards. Sometimes those rewards were bigger, at other times smaller, but they did appear on my account EVERY day in the amount of no less than 0.0048%. The highest interest rate I was able to notice in this period was 0.5092% and that happened on the 12 March 2020. During the year of my observations the total value of rewards amounted to 18.3631%. 

Is that much or little?

Out of curiosity I looked through the current list of ‘The best annual deposits – changes in the lead’, which I found at Bankier.pl, the most widely known and opinion-making financial news service in Poland. I would not like to be accused of spreading any inaccuracy or distortions, hence I took the liberty to show screenshots of what I had found. Allow me to leave the rate of return from bank deposits without any comment. I shall only ask this one and only question. 

How is it that banks, qualified to make all sorts of financial investments, having practically unlimited investment options and additionally the possibility to create money, offer their clients 18 to over 367 times lower profits for using their money to trade than Kanga Exchange, which was launched only 2 years ago and which operates with incomparably smaller resources and possibilities? 

Two answers to that question come to my mind. Either banks are so ineffective in their operations and should therefore give way in the market to those entities which can generate such profits or… they simply cheat their clients (who, by the way, are their sole breadwinners) out of their money, keeping all generated profits only to themselves. Either way, continuing in any of these directions, whether consciously or unconsciously, may prove to be fatal for banks. 

Let us, however, concentrate on more positive news. When modifying its Proof-of-stake solution Kanga has brought to life a bonus for using autodeposits to PoS. Daily increase of this bonus is currently at the level of 0.5%. What does that mean? Well, if you enable autodepositing for the period of 30 days, you will get a 15% bonus. Moving on, if you do not disable the autodepositing feature for 200 days, you will receive a bonus of 100%. And so on and so forth. And to answer your next question, there are no limits to the bonus. It all looks pretty good, but what benefits come from this bonus? 

Every person who deposits their KNGs in an individual PoS account is entitled to receive a reward that is proportionate to the volume of their deposit. The amount of the bonus is directly reflected in the amount of the reward for staking. How does that happen? Receiving a bonus of 15% causes the balance of KNG deposited in your PoS to virtually increase by 15%, which in turn results in the increase of your reward by 15%. 

On a particular day the pool of commissions increased by 250 KNG. The total amount in the PoS pool on that day is 500,000 KNG

This means that on that day for each KNG accumulated in the PoS pool there is 0.05% reward (see the calculation below).

250 / 500,000 * 100% = 0.05%

You have 1,000 KNG deposited in your PoS account. What will then be your reward? 

  • If you have no bonus 1,000 * 0.05% = 0.5 KNG
  • If you have 15% bonus 1,000 * 1.15  * 0.05% = 0.575 KNG 

Therefore, having a bonus of 100% (which will happen after 200 days of continually using autodepositing to PoS) means that the value of your rewards will double. You can check the current level of your bonus in your Kanga Exchange account or your Kanga Wallet app. 

There is also the other side of the coin. If you disable the autodepositing function to withdraw funds from your PoS, you will lose the bonus you have been working on and you will have to accumulate it from the start. It is comforting to know, however, that no one will take away the rewards you have already received. Neither will the level of rewards be corrected. It is slightly different than what banks do, where interests will equal 0% if you withdraw your deposit. 

Why am I writing about all of this?
It is a very interesting and profound question, though it might not seem so. Did anyone pay me for writing it? No. Do I get any benefits from it?. No. Or maybe I am a cyberpunk and simply hate banks. Again, no. I only care about it that each person, absolutely each and every human being on Earth, learns about it and is aware that there are alternatives to what banks offer or actually do not offer, although they should. Will anyone use this knowledge and how will they use it? That is an individual decision of each reader. 

Kanga Exchange is one of those projects which put efforts into increasing the financial awareness and freeing our individually accumulate money, oftentimes earned with great strive, from the bonds of possessive institutions which claim the right to monopolize the financial market, even though they do not bring any or little results while managing the finances of their clients. I personally acknowledge Kanga’s effort and that is the reason why I am writing this article. I realize that there is a long way ahead of us, one requiring a great shift in awareness and constant access to knowledge. That is why it is so important for as many articles of that sort to appear as possible. Without them thousands of people would stand no chance to learn about the solutions which are available. Where else would they find out about them? You are now reading this article. Think about it… what would happen if you had no occasion to read it? Would you have learnt about it from the radio or television? Or perhaps from the newspaper? Or maybe your bank will simply inform you about it? I honestly doubt that, though it would be great. 

Coming back to the question I posed at the very beginning. Are banks going to collapse? In the shape they operate and function now, they most certainly are! If they do not start treating their clients, like you or me, seriously, I can imagine their collapse and much sooner than it would seem. The gravest and unforgiveable mistake banks make seems to be following the policy of mindless exploitation and excessive drainage of their breadwinners. Normally every company in the world pays for such capital mistakes as negligence of their clients. And the cost can be tremendous. What can a company in fact achieve and gain without its clients? The ability to operate on their clients’ money is not only an opportunity to make profits, but also – or perhaps above all – it is a privilege and a duty. Obviously, banks did not want to keep that in mind… they forgot about it… Sooner or later they will have to pay for this mistake. Only time will tell how soon that will come about. 

Piotr Kowalski – BTC League for Kanga Exchange

Dear Reader!

Investing in any financial instruments, particularly those related to the cryptocurrency market and the blockchain technology, is associated with high risk. Investing in such projects may carry a significant risk of losing all or part of the invested funds. Therefore, prior to engaging in this type of investment make sure you understand the risk related to it and seek advice of an independent investment advisor. 

Materials and information published as part of this article serve informative purposes only and should not become the sole basis for making investment decisions. The information particularly does not serve as a recommendation to invest in any financial instrument, nor should be treated as investment advice. 

All opinions, any information and any other details included in this article do not constitute investment advice. The author is not liable for any loses, including the loss of profits, which may be directly or indirectly connected with making use of the information obtained from the article or with relying on such information.