In recent times, there has been news of inflation raging through the economy of several countries, and this has raised serious concerns. Having a passive income is the ultimate solution as it can help you earn more during the good times and tide you over if things go south. Passive income can provide extra financial security even if you have a high-paying job.
If you don’t know, cryptocurrency is the best way to generate passive income. This is because, through innovations, different ways to create passive income by leveraging your cryptocurrencies to generate returns in the background have been discovered. By generating passive income from crypto, you can quickly free up your time for more important things since it is not an active investment.
In this article, seven different ways to generate passive income from crypto are discussed below.
Yield Farming
Yield farming is one of the best ways to earn passive crypto income because of its dynamic operations and liquidity of decentralized exchanges. Trading platforms exist that allow users to rely on smart contracts. Through smart contracts, investors can obtain the liquidity that they need. In turn, liquidity providers receive a portion of the trading fees from this pool. To make a high passive income from yield farming, you must become a liquidity provider. Defi yield farming on Binance is an excellent platform to start. This investment vehicle is not without risks, as you need to be conscious of price volatility.
Earn interest with crypto savings accounts
In the same way, your fiat currencies can earn interest while being held in a savings account; cryptocurrencies can also be deposited to various platforms to earn a yield. Some of these are centralized cryptocurrency savings accounts, like those offered by Nexo, BlockFi, and Crypto.com.
Stake your cryptocurrencies
The introduction of Proof-of-Stake (POS) in the crypto space introduced an efficient way to maintain consensus in a decentralized system and new methods for coin holders to earn profits through staking. Through staking, you can make profits from the staked cryptocurrency’s inflation and the network’s transaction fees. Examples of cryptocurrencies offering staking rewards are Ethereum (via the Beacon Chain), Solana, and Avalanche.
Cryptocurrency mining
You can mine different cryptocurrencies using cloud computing power rented using somebody else’s computer to mine cryptocurrencies, such as bitcoin. It is a system worth considering in your bid to earn passive crypto income. Cloud mining companies allow users to open an account to participate remotely in cryptocurrency mining.
Open a portfolio with an investment firm
A portfolio with an investment firm can be a great way to generate passive income with crypto. Choosing an investment firm to open a portfolio with can be a daunting task. However, one good recommendation is Reliq Holdings. This company has a lot of positive reviews from clients and has been in business for quite a while. Additionally, Reliq Holdings offers a variety of investment options, including mutual funds, ETFs, and specialty investments.
Airdrops
If you frequently interact with existing and new platforms using crypto, you will most likely be eligible for an airdrop. As part of a more extensive marketing campaign, airdrops are where developers and blockchain-based projects send tokens free of charge to their members. It is the equivalent of receiving a free sample of a product.
Dividend-earning tokens
Crypto companies that offer dividends to their customers are similar to companies with shareholders. Such crypto platforms have a business system where users are allowed to show their support by acquiring crypto tokens. These tokens can have various functions. One of them is providing rewards based on the profit of the company. Companies like Decred or Ontology pay cryptocurrency dividends.