How to Earn a Passive Income with Cryptocurrency
Do you want to earn a passive income with idle cryptocurrency while you are sleeping? In this article, I’ll show you how you can make a passive income with your idle cryptocurrency.
There are other methods than trading or investing which will assist you turn your idle cryptocurrency into a passive income. These pays ongoing income almost like earning interest, but only require some effort to set up and tiny or no effort to take care of.
Stop holding idle crypto. Turn your Idle Cryptocurrency into a Passive Income.
What is Passive Income?
The word “passive” makes it sound such as you need to do nothing to bring in the income this is not true. Passive income required an upfront investment and tons of nurturing in the beginning.
All passive income streams will required a minimum of one amongst the following two elements:
- An upfront monetary investment, or
- An upfront time investment.
The reality is that, whether you wish to admit or not, many have gotten rich with cryptocurrency. The crypto industry offers much more lucrative opportunities for those with a sum of money to make their money work for them and earn a passive income. There are naturally ways to own a passive income in cryptocurrency. Even the most effective investors can experience prolonged periods of loss, and one of the ways to survive them is to have alternative sources of income. This way, you’ll have several streams of income that, together with one another , can add up to a big amount. Boost your passive earning with platforms like Binance, Kucoin, Poloniex, Nexo, Crypto.com, Bittrex and Gate.io and Okex.
What are the ways you can turn idle cryptocurrency into passive income?
Passive income is money you earn that does not require you to try and do tons of “active” work. it’s an income stream that when setup correctly, would require minimal interaction to make profit.
Earn Passive income with cryptocurrency by staking
Staking is the most straightforward way to earn passive income because the market pays you for holding cryptocurrencies for a particular period of time.
Staking is the process of depositing and holding funds in a wallet or an exchange to support the security and operations of a proof-of-stake blockchain network. In return, users receive rewards for this.
Staking gives stakeholder voting rights, the power to make decisions in the network, and to generate passive income.
You can earn coins without even participating in any transaction. All you have to do is to keep your wallet open and you can earn staking reward.
The staking principle is kind of simple. The more funds you stake within the network, the more power you’ve got . Not all cryptocurrencies support staking.
With staking, you’ll generate a passive income by holding coins. Beside that you simply receive a gift (in the shape of additional token).
Exchanges that offer crypto staking:
- Binance: Supported coins will be staked automatically and you can earn more with Binance Earn. Staking Fees: Zero fees. Staking Assets: Algorand (ALGO), NEO (GAS), Ontology (ONG), VeChain (VTHO), Tron (BTT), Kava (KAVA), Komodo (KMD), Stratis (STRAT), Qtum (QTUM), and Stellar (XLM). Minimum investment: Starting at 10 USDT worth of tokens. Start staking with a low entry of only $10 USDT worth of tokens and reap higher rewards and additional benefits.
- Crypto.com: Earn 10% APR interest paid daily.
- KuCoin: Kucoin is the pioneer of exchange staking. Users can currently stake a wide range of assets on KuCoin, including several that you will not find on other reputable exchanges. Staking Fees: 10%. Staking Assets: Tron (TRX)
- Poloniex: Poloniex also offers exchange staking. Staking Fees: 25%. Staking Assets: Cosmos (ATOM)
Earn Passive income with cryptocurrency by Liquidity mining and Yield farming
The rise of automated money markets and decentralized borrowing and lending platforms has boosted new applications and a chance to earn passive income through numerous platforms like staking, decentralized exchanges (DEX), and liquidity mining is also referred to as yield farming.
Decentralized finance (DeFi) is an ecosystem built on the blockchain that gives financial DAPPS and smart contracts that have the conventional economic system ( centralized finance) by replacing those centralized services with “Trustless protocols”.
DeFi present opportunities that will transform centralized financial model. On DeFi platforms, there will be better interest rates, capital protect, and more investment options.
You can also read:
- How to use Binance Exchange: A Step-by-Step Guide For Beginners’
- Top 6 Best Cryptocurrency Exchanges of 2021
Liquidity providers (LP) are individuals who plan to lock their coins for a gift . in order words, they’re yield farmers or liquidity miners.
Liquidity mining also know as yield farming. Participants in yield farming are called yield farmers and that they stake or lock their funds on behalf of the yield farmers in return for a fee. The upper the stake , the greater the fees, and returns on investments.
Yield farming is the generation of yield from crypto assets. In yield farming, people lock their cryptocurrencies and receive rewards per the number of coin locked.
Yield farming may be a symbiotic relation within the sense that the two parties-the DeFi protocols and also the liquidity provider benefit from one another.
Yield farmers provide liquidity to support the protocol, in return, they receive reward for supporting the system. The reward yield farmers get usually comes from trading fees generating from underlying DeFi platform.
Yield farmers can farm yield from DeFi money markets, liquidity pools, and incentives. They’re instrumental to the structure that powers platforms that use automated market marker (AMM).
Liquidity Mining and Yield Farming Platforms
1. Binance Liquid
Binance Smart Chain (BSC) is a blockchain protocol from Binance that runs in parallel with Binance Chain. Unlike Binance Chain, however, Binance Smart Chain powers smart contract functionality and boasts compatibility with Ethereum Virtual Machine (EVM).
Binance Smart Chain has one of the fastest blockchain transaction times and lowest fee structures, which makes building DeFi apps on the protocol so appealing for developers.
BSC protocol are protocol that support platforms for Yield farming using Binance smart chain (BSC) token. Binance Smart Chain’s BEP-20 token uses essentially the same format as the Ethereum protocol’s popular ERC-20 tokens.
Currently, there are already 60+ DApps operating on Binance Smart Chain, with the majority specializing in decentralized finance solutions.
The easiest way to access Binance Smart Chain to take part in its growing DeFi ecosystem is using the Trust Wallet DApp Browser. Download Trust Wallet app to access DeFi on Binance Smart Chain today!
Uniswap platform is one of the latest and at the same time largest DeFi exchanges for yield farming. Yield farmers can lock and stake their funds here in ETH and USD and earn up to three fees on all investments counting on the quantity of their share.
Aave is a decentralized non-custodial liquidity market protocol where users can participate as depositors or borrowers.
Depositors provide liquidity to the market to earn a passive income, while borrowers are ready to borrow in an overcollateralized (perpetually) or undercollateralized (one-block liquidity) fashion.
In order to use the service, you simply deposit your preferred asset and amount. After depositing, you’ll earn passive income based on the market borrowing demand.
The Balancer is an AMM platform that operates on the Ethereum blockchain network. Balancer comes with customizable pools like shared pools and private pools to earn rewards. in a shared pool, the fees are fixed whereas, in a private pool, owners have control and may add liquidity as per choice.
Earn passive income with cryptocurrency by Lending
Lending is a completely passive way to earn interest on your cryptocurrency holdings. There are many peer-to-peer (P2P) lending platforms that allow you to lock up your funds for a period of time to later collect interest payments. The rate of interest can either be fixed (set by the platform) or set by you based on the present market rate.
Exchanges that offer lending service
- Binance Lending offers a variety of options that let you earn interest on your holdings.
- Nexo is an online cryptocurrency loan service that offers financial benefits for storing crypto assets on the platform such as Bitcoin and Ethereum within a Nexo secure wallet. Nexo is an ease to use lending platform.
- KuCoin offer lending options that let you earn interest on your crypto by lending them out for the funding of margin accounts. The loans last for either 7, 14, or 28 days, and you can earn up to 101% annualized interest rate from your holdings.
What are the risks of turning Idle Cryptocurrency into Passive Income?
- Risk of bugs: Locking up your tokens in a staking wallet or a smart contract always carries the danger of bugs. Usually, there are multiple choices available with various degrees of quality. it’s imperative to research these choices before committing to at least one . Open-source software could be a decent place to begin, as those options are at the very least audited by the community.
- Buying a low-quality asset: Artificially inflated or misleading return rates can lure investors into purchasing an asset that otherwise holds little or no value. Some staking networks adopt a multi-token system where the rewards are paid in a second token, which creates constant sell pressure for the reward token.
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Please note: This is not a financial advice. Cryptocurrency are often highly volatile and is subject to high rick. Please make your investment cautiously.
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