5 ways to earn passive income with cryptocurrency | by Gayle Kurtzer-Meyers | April 2022

cryptocurrency

Stick to the basics

Photo by John Opeyemi writing about Flow

“You can only be financially free when your passive income exceeds your expenses.”-T. Harv Eker-

Cryptocurrency gives people the opportunity to earn profits through trading and investing. However, if like many avid crypto traders you are trying to make a profit, trading and investing can be risky, time-consuming, and stressful, and require your undivided attention.

Buying or holding crypto assets for a long time does not guarantee that you will ever make a profit. However, it also doesn’t mean you might be running at a loss. Since putting in the time, resources, consistently tracking your portfolio, and managing your positions on a regular basis doesn’t produce productive and fulfilling results, there are other ways to earn cryptocurrency income without the stress.

What is Passive Income in Crypto?

Passive income is income from activities that do not require a person’s full commitment. With passive income, the individual invests minimal effort and watches their investment grow to the projected profit. There are several passive income strategies that cryptocurrency traders can employ with their current profit plan to maximize their profit; These passive income strategies include:

Mark out

Cryptocurrency staking is a strategy used by millions to earn passive income from their investments. For users, it’s a way to get returns for holding cryptocurrency tokens for some time, while crypto projects consider staking as a process that helps with transaction verification. Although not all cryptocurrency tokens or altcoins allow staking; However, you can stake crypto assets, especially in the DeFi space.

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How does staking work?

Think of staking as investing or storing your money in a savings account that promises huge returns. If you deposit your tokens with that bank for an extended period of time (e.g. 3 to 6 months or as specified by the bank), the bank will then collect your tiered deposit and other people’s deposits and lend them to others. As a bonus for keeping your money tied up, you will receive rewards in weekly or monthly payments.

Check out this Statista report on the world’s largest cryptocurrencies based on total value staked.
As mentioned above, most DeFi projects allow users to stake their assets and the vast majority of them use Proof-of-Stake consensus mechanism. This type of blockchain technology ensures that all transactions are verified, protecting the finances of the holders.

Agriculture

Yield farming is a passive income strategy used by crypto holders on the blockchain to maximize their profit. Since it helps users grow their cryptocurrency stack, it is known as farming.
Farming leverages the decentralized ecosystem on Ethereum and can now transform the entire system of holders (HODL) in the future. Although many compare farming to staking, both of these passive income strategies have a lot of technology behind them.

How does yield farming work?

Crypto holders lend their digital assets to DeFi platforms. The tokens are then blocked in the liquidity pool for a certain period of time.
This liquidity allows the tokens to be used as a borrowing and lending platform. Here, no central body holds the blocked funds and the disbursement of the assets is instant as the lenders meet the requirements. With this setup, fees are incurred by the user, which are paid equally to the liquidity providers.

Popular yield farming platforms include UniSwap, PancakeSwap, and Compound.

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CeFi Credits

One of the most underappreciated and untapped potentials of passive income strategy in cryptocurrency is lending. Many crypto owners overlook the opportunity to earn big as they want to hit 100% or more in weeks rather than 10% in years. If you have some Ethereum or Bitcoin assets to hold in case of future price increases, there are other ways to earn more while holding them.

Lending to centralized financial institutions such as Celsius, Nexo, BlockFi, YouHolder and CoinLoan offers a high interest rate i.e. 4.50% to 13.00%. The interest rate is more stable with centralized lending because the lender sets the interest rate. However, volatility and other forces driving the market price drive decentralized lending rates.

air drop

Airdrops are also one of the most popular ways crypto owners earn passive income. It is a marketing stunt or strategy performed by a crypto project and involves sending a certain amount of their tokens to your wallet address for free. It often requires the holders to perform some duties i.e. promote it and create awareness of the project and its tokenomics.

How does Airdrop work?

Crypto projects announce airdrops through the company’s official links, social media pages like Twitter, and community forums like Reddit. Note: Make sure you verify the authenticity of an airdrop so you don’t expose yourself to phishing sites and scams. Projects like Gains Network, Metafity and Glass Coin run airdrop events.

In general, most airdrops require users to hold a certain amount of crypto tokens in their wallet, create promotional messages on their social media platforms, join a group, write a blog post, or refer a certain number of people.
A legitimate airdrop will never ask users to invest before they are eligible.

Also red flags like pre-mined tokens ready for payout reveal the gap of such crypto project. After fulfilling the requirement, you will receive an email, message or direct message from the official page of the project congratulating you and guiding you through the next step to get your reward. This reward can range from a few dollars to thousands of dollars.

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affiliate programs

Many cryptocurrency companies are looking for ways to increase their user base. Hence, they have developed affiliate programs for their existing user base. Affiliate programs are similar to referral marketing, where a user invites one or more people to the site and receives rewards per invitation. The payment scheme for affiliate programs at cryptocurrency companies ranges from cost-per-sale, pay-per-lead, or pay-per-transaction.

Cost-per-sale method means that an affiliate receives rewards after successfully selling one or more digital products; Pay-per-lead means one payment from each invited customer. In contrast, pay-per-transaction is paid for every successful transaction made by your invited customer.

Here the reward does not necessarily have to be money, a deposit or PayPal. Instead, it can be discounts, free products, or free trading features. Fortunately, many of these programs have a cookie duration of 69 to 90 days, which allows the affiliate to receive enough recommendations within this period.

Conclusion

Crypto holders can incorporate several other passive income strategies into their regular trading to increase their earnings. The recommended passive income strategies do not guarantee huge profits or sales; Instead, they act as a supplement and can offer you enough to pay certain bills.

“Opportunities come rarely. When it rains gold, put out the bucket, not the thimble.” -Warren Buffett-

Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers