Cryptocurrencies keep evolving their uses as the industry matures. Bitcoin started out as a means of exchange and a store of value. Today, the presence of thousands of alt coins has created diversified opportunities for cryptocurrencies in terms of how they can be used, stored or traded. Away from gaining value through price appreciation, crypto assets can generate revenue by attracting interest when used to execute various functions that essentially distribute regards.
The process of earning more crypto by engaging your owned assets in activities that draw interest, also known as passive earning. The following are simple ways to earn crypto without engaging in much trading activity.
1. Crypto Interest Accounts
Cryptocurrencies are now taking on major banks through the form of traditional services, providing genuine alternative finance options. Crypto interest accounts are now available courtesy of crypto-bank or DeFi technologies, developing new financial models.
Just like in traditional banks, one can now operate personal accounts, which include saving accounts. BlockFi, a regulated crypto lending platform offers interest on cryptocurrencies deposited in their accounts as savings, enabling users to earn Bitcoin and increase their altcoin holding. The amount of interest earned on such platforms generally depends on the amount and durations of what you have put in your account.
Of course, there are other alternatives to BlockFi. One of those is Hodlnaut – the crypto interest account that’s actually giving higher interest rates than BlockFi. At Hodlnaut, you can earn up to 10.5% APY on your crypto with weekly payouts and no lock-in periods. But as always, DYOR – Do Your Own Research – before you decide on anything.
2. Lending
Crypto lending is an emerging financial service where crypto users borrow loans against their coins, like a traditional collatoralized loan. Since most cryptocurrencies do not have a central point of control, some lending companies connect lenders and borrowers, matched directly on the platform as a peer to peer network. The interest that a borrower pays back is received by the lender. Meanwhile, both the lender and borrower continue to profit from price appreciations realized from their holdings.
Also there are crypto startups whose main function is to create a lending environment. Although still operating on peer to peer network, the platforms earn a percentage from loans offered through them, as profit.
3. Staking
Staking is almost similar to hosting nodes on a network. The difference is anyone can engage in staking as it does not require a minimum amount of coins to operate. There are several coins that offer staking services with interest.
4. Margin funding
Margin funding goes hand in hand with margin trading and is a route chosen by low risk takers. This is a feature offered on exchanges where users who’d rather not conduct trading, fund trades for other users. Major exchanges including Bitfinex, Poloniex and Bitmex run this service. To earn interest in margin funding, users stake coins they wish to lend in separate funding wallets.
There are margin funding bots available for those who do not wish to manually participate in the process.
5. Coins with dividends
Some exchanges reward users for holding their coins or native tokens. KuCoin and Neo are examples of platforms whose assets generate interest when held. Coins held help to secure blockchain platforms, thus, some entities reward users for holding with intention of encouraging holding rather than trading.
6. Voting DPoS Delegates
Another interesting way of earning interest through cryptocurrency can be summed up through ARK’s approach. ARK is a third generation Blockchain platform using a Delegated Proof of Stake (DPoS) as a consensus mechanism. It therefore needs users to help run the network. However, unlike in PoS and PoW where people independently volunteer to complete tasks, Delegates are voted in. Delegates are the equivalent of Masternodes and Miners.
To become a Delegate on ARK, one has to pay the network 25 ARK to be registered as one. Next, they come up with strategies, similar to campaigns, which are used as basis other users to vote for them.
Delegates are rewarded for confirming transactions on the network. As such, as a Delegate nominee, one comes up with a profit sharing strategy that will be used to share profits as dividends with voters. Owning ARK coins directly gives one a right to vote so anyone on the network can earn interest if the person they voted for is one of the winning 51 delegates.
Before you go…
So, there you have it – six ways you can earn interest passively from your crypto holdings. If you have anything to add to the list, please share your ideas in the comment section.