Many of us would love to earn passively through crypto. Setting clear financial goals and plans is the first step towards finding the best ways to earn passively through crypto. You have to be clear about how much you want to invest in terms of money and time. You will also need to make short-term sacrifices for long-term gains.
Crypto passive income aims to maximize returns on your crypto assets with minimum effort. It takes a little time, effort, and thorough due diligence to earn passively through crypto. This article will explore some of the best ways to earn passively through crypto.
How to Earn Passive Income Through Crypto?
1. Crypto staking
Users lock in their crypto tokens on a proof-of-stake (PoS) blockchain to validate transactions, known as staking. Users get rewarded in the native crypto of the blockchain for staking their tokens. Crypto staking is one of the popular ways to earn passively through crypto. Users also help to secure the network against malicious attacks by staking their tokens.
Users can participate in crypto staking even if they do not have enough tokens to run a full validator node. Some PoS blockchains use the delegated proof of stake (DPoS) consensus method, where users can use their crypto tokens to delegate their staking rights to a full-time validator.
The delegated validator will process transactions and share the staking rewards based on the number of tokens you invested. This method is an affordable way to earn passive crypto income.
2. Crypto mining
Many popular cryptos, such as Bitcoin and Litecoin, run on the proof-of-work (PoW) blockchain. Under this system, miners compete against each other across the world to solve complex puzzles. The winner gets to verify transaction blocks and earn rewards.
Specialized hardware equipment and technical knowledge are requirements to become a miner. You also need to install and configure the mining software. Nowadays, independent miners are struggling to compete against professional mining operations. However, the reward for winning the mining race could be worth thousands of dollars.
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3. Yield Farming
Users provide liquidity for lending services in yield farming to earn interest. It entails storing your crypto tokens in a dApp’s smart contract. Borrowers have access to a pool of funds and pay interest to use them.
This method is another popular way to earn passive crypto income, but do your due diligence before you lock in your tokens.
Users get crypto token rewards for locking in their tokens, but yield farmers have to lock in their crypto tokens for a long time to earn interest.
New crypto projects distribute free crypto tokens to wallet addresses to generate interest and gain new followers. Users can find these emerging projects to earn crypto rewards through airdrops.
Many projects use the airdrop technique to promote themselves and gain followers within the crypto community. Users complete simple tasks such as signing up or sharing posts to receive free crypto tokens.
5. Crypto lending
Yield farming is a variation of crypto lending, but it has other applications. Crypto lenders can use decentralized or centralized platforms to find borrowers. You can also lend directly to an individual using a peer-to-peer platform. These platforms include borrowers’ credit scores and histories.
6. Crypto savings accounts
Some platforms offer accounts where you can earn interest through your crypto tokens. Similar to savings accounts in a bank, crypto tokens deposited in these accounts are used for lending and staking. You can earn a part of the returns made using your crypto token by having crypto savings account with such platforms.
7. Play-to-earn games
You can also earn passive income by playing online games. There are numerous play-to-earn crypto games in the market today. Axie Infinity and Decentraland are some popular games to earn crypto tokens. Play-to-earn games had become a source of income for many during the pandemic.
8. Liquidity mining
Liquidity mining involves providing liquidity to coin swap pools on decentralized exchanges. Users are issued liquidity pool tokens for their investment instead of interest. These tokens can be reinvested on the same platform or used on other platforms.
Passive crypto income is an easy way to earn and diversify your portfolio. Also, if your crypto assets increase in value, you are rewarded with both investment gains and crypto interest.
Crypto passive income can prove beneficial in the current bear market. Not only new investors but also experienced ones can set aside money to invest in passive income streams. There are many crypto platforms to choose from, but you have to thoroughly research these crypto platforms and the market before investing.
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Disclaimer: Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Each investor must do his/her own research or seek independent advice if necessary before initiating any transactions in crypto products and NFTs. The views, thoughts, and opinions expressed in the article belong solely to the author, and not to ZebPay or the author’s employer, or other groups or individuals. ZebPay shall not be held liable for any acts or omissions, or losses incurred by the investors. ZebPay has not received any compensation in cash or kind for the above article and the article is provided “as is”, with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information.