3 Best Ways To Make Passive Income With Cryptocurrency – Gadgets To Use

Besides trading, there are other methods of earning with cryptocurrencies. Thanks to the growth and development in the field of DeFi. It consists of various apps and services that provide various financial services but are not owned by a central authority such as banks. DeFi also allows crypto investors to earn passive income from their crypto. We will discuss all 3 ways you can earn passive income with cryptocurrency and which one is the most suitable for you.

Related article | Top 5 Best DeFi Tokens and Best Platforms to Invest in 2022

Disclaimer: This article is for educational purposes only. Information is provided according to reliable sources and industry trends. The value and position of cryptocurrency in the market is subject to change. Do your research and background check before investing.

Ways to earn passive income with cryptocurrencies

There are 3 methods of earning passive income with cryptocurrency other than trading or holding them. All 3 require prior knowledge and you should do your research before investing. We look at Staking, Lending and Yield Farming. How they work, what you need to know about them and the risks involved.

1. Turn off

Staking refers to locking your coins for a certain period of time in a crypto exchange to earn interest-based rewards on them. Think of it as a fixed deposit where you lock up your money for a certain period of time and receive interest on it. The exchange uses your coins to validate transactions on the blockchain. In return, the exchange receives a reward that it distributes appropriately among the investors.

Staking is not supported by every type of cryptocurrency, such as Bitcoin or Ethereum. Coins such as Tezos, Polygon, Theta, Ethereum 2.0 (not released yet, but you can still wager it) and Cardano support staking. Binance exchange allows staking.

turn off pool

In Staking Pool, a group of people collect and invest crypto for strike. The interest earned is then distributed to the members of the group for their investment. Here the rewards can be very high, but these stake pools are not reliable like exchanges. They could be a scam and you could lose all your cryptocurrency.

What you need to know about Strike
  • You can bet a small part of your money
  • Limited crypto support on strike
  • Exchanges charge a small fee for staking
  • Not all exchanges support strike
Betting Risks

Staking is a minimal risk method because you earn in the units of the crypto, not its value. . Any risk involved is mainly due to bugs in the smart contract.

2. Lending

With Lending, you supply crypto to a crypto exchange platform for a fixed period at a fixed interest rate. This crypto is lent to the borrowers who have to pay interest on the loan amount. You will be rewarded in other tokens representing your first deposit + interest in current market value. You can choose to sell these tokens, HODL them or trade them for another cryptocurrency.

Exchanges like Binance, CoinDCX and BlockFi support lending and borrowing and offer a varied interest rate from 5% to 13% that you can earn on your crypto.

DeFi vs CeFi Loans

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