Some of us get into crypto because we just want to buy that miracle coin that does a 1000x and makes us rich. Others of us are okay with steady returns that also provide some of that sweet passive income. And while most things in life when it comes to making money are not passive, we believe we’ve put together 5 nice alternatives that will allow you to earn money on your crypto passively. As with anything in life there are some risks, but as they say no risk no reward. Okay here are some of the best ways to earn money passively with your cryptocurrency.
Also, if you’re looking to play some crypto poker, we’ve got 5 of the best apps to check out right here.
Staking involves holding a certain amount of a cryptocurrency in a wallet or on an exchange that supports staking. By staking your coins, you are essentially helping to validate transactions on the blockchain, and in return, you receive a portion of the network’s transaction fees as a reward. Some popular coins for staking include Cardano, Polkadot, and Ethereum. This has actually become a pretty traditional way to earn some passive income, but keep in mind you will need to look at this as a long term approach.
Crypto lending platforms allow you to lend out your crypto to borrowers, who use it for trading or other purposes. You earn interest on your lent-out crypto, which can range from a few percent to double-digit returns. Some popular lending platforms include Nexo and Coinbase.
3. Yield Farming
Yield farming: Yield farming involves using decentralized finance (DeFi) protocols to earn rewards in the form of tokens for providing liquidity to a particular pool. By lending your tokens to the pool, you can earn a percentage of the transaction fees generated by the pool. However, yield farming can be risky, as the value of the tokens you are farming can be volatile.
Masternodes are nodes that perform specific functions on a blockchain and require users to hold a certain amount of the coin to participate. By running a masternode, you can earn a portion of the transaction fees generated by the network. However, setting up a masternode can be technical and requires a significant investment.
5. Crypto Gaming
Lastly, you can make money with crypto gaming. Yes, this is really a thing. A great example of this is Axie Infinity. Axie Infinity is a thrilling play-to-earn game in a digital universe where players collect pets called Axies to battle players. Sky Mavic designed Axie Infinity to offer varied fun experiences, including building kingdoms, breeding, raising, and battling. It also offers rewards in the form of Non-Fungible Tokens.
Axie Infinity gameplay goes all in where skill and competitiveness are concerned. To start playing Axie Infinity, you need to find an Axie capable of destroying your opponents. There are six pure Axie breeds, each with six body parts with different stats. So, you need to be crafty in choosing your pet to stand a chance at taking down your competition.
After you get your Axie set, it’s time to train in Adventure mode. This is where your pet battles AI Axie to increase its “Experience” (XP) for the next part of the game, which is Arena mode. This mode pairs you with players with the same Matchmaking Rating (MMR). In this end, the more opponents you defeat in player-versus-player (PVP) mode, the higher your MMR and the heavier your wallet grows.
The earning potential on Axie Infinity is attached to your skill in playing the game. MMR is the value that indicates your skill level and dictates the amount of money you can make from playing Axie Infinity. You can also farm form to earn crypto assets. Typically, you will start the game with an MMR of 1200, earning you 3 Smooth Love Potion (SLP) tokens, the in-game currency. Every time you win battles. SLP is the Axie Infinity native token. 3SLP is about $0.015. Losing the game lowers your MMR but doesn’t reduce the SLP in your wallet. Bottom line this is a somewhat passive and alternative route to making money with your cryptocurrency.
And lastly we’d like to recommend 4 coins for you guys to get started with on the platform that we believe are going to give solid returns. Just keep in mind this is not financial advice.
First up we have Decentraland. Decentraland is hosted on the Ethereum network and represents a virtual reality ecosystem where people can buy LAND, which is a non-fungible token that represents a piece of the virtual map.
Decentraland’s users are incentivized to operate a virtual reality that the entire community shares. While LAND represents the ownership over a piece of the Decentraland virtual world, MANA is the native currency of the system and community members can use it to buy LAND on the marketplace. The Decentraland software offers a unique experience to users who can communicate with other users and make the best of features such as in-world payments, playing games, and enjoying virtual content. With its decentralized governance structure in which the power lies in the hands of users and MANA holders, Decentraland is the first virtual platform of its kind where users are in complete control over the ecosystem. They are a current leader in the metaverse gaming space, and only look to grow massively in the coming years.
2. Enjin Coin
Second we have the Enjin Coin. Enjin is a software that gives developers the ability to create and manage virtual goods on the Ethereum blockchain. The idea is that by using blockchain technology to manage in-game items across many different properties, Enjin can help reduce the high fees and fraud that have plagued the transfer of virtual in-game goods and collectables. Toward that goal, Enjin has released software development kits (SDKs) allowing users to both create digital assets on Ethereum and integrate them into games and apps. Each minted asset is customizable to fit the desired platform and recorded in a smart contract, giving the items the advantages of cryptocurrency, namely speed, cost and security. Central to managing the digital assets on its platform is ENJ, Enjin’s cryptocurrency, and each in-game item created on Enjin is assigned a value in ENJ. Bottom line the price on this coin is very undervalued and could sky rocket at any given moment.
Third, we have Sushiswap. SushiSwap is a software running on Ethereum that seeks to incentivize a network of users to operate a platform where users can buy and sell crypto assets. Similar to platforms like Uniswap and Balancer, SushiSwap uses a collection of liquidity pools to achieve this goal. Users first lock up assets into smart contracts, and traders then buy and sell cryptocurrencies from those pools, swapping out one token for another. One of a growing number of decentralized finance (DeFi) platforms, SushiSwap allows users to trade cryptocurrencies without the need for a central operator administrator. This means that decisions relating to the SushiSwap software are made by holders of its native cryptocurrency, SUSHI. Anyone holding a balance of the asset can propose changes to how it operates and can vote on submitted proposals by other users.
Last, we have Polkadot. Polkadot is a software that seeks to incentivize a global network of computers to operate a blockchain on top of which users can launch and operate their own blockchains. In this way, Polkadot is one of a number of competing blockchains aiming to grow an ecosystem of cryptocurrencies, other notable examples of which include Ethereum and Cosmos. However, Polkadot, launched more recently, is among the newest, and it introduces a number of novel technical features toward its ambitious goal. To begin, Polkadot is designed to operate two types of blockchains. A main network, called a relay chain, where transactions are permanent, and user-created networks, called parachains.
Parachains can be customized for any number of uses and feed into the main blockchain, so that parachain transactions benefit from the same security of the main chain. With this design, the Polkadot team contends transactions can be kept secure and accurate using only the computing resources required to run the main chain. Users, though, gain the added benefit of being able to customize many parachains for many different uses. The Polkadot team believes this design will let its users perform transactions more privately and efficiently, creating blockchains that don’t disclose user data to the public network or that otherwise process a greater number of transactions. To date, Polkadot has raised roughly $200 million from investors across two sales of its DOT cryptocurrency, making it one of the most well-funded blockchain projects in history.