Cryptocurrencies continue to develop their uses as the industry matures. Bitcoin started as a medium 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. In addition to gaining value through price appreciation, crypto assets can generate income by generating interest when used to perform various functions that essentially hand out greetings.
The process of earning more cryptocurrency by using your assets for activities that generate interest, also called passive earning. Below are easy ways to earn crypto without doing much trading.
1. Crypto interest accounts
Cryptocurrencies are now taking on the big banks in the form of traditional services, offering real alternative financing options. Crypto interest accounts are now available thanks to crypto banking or DeFi technologies, creating new financial models.
Just like with traditional banks, one can now manage personal accounts, including savings accounts. BlockFi, a regulated crypto lending platform, offers interest on cryptocurrencies deposited into their accounts as savings, allowing users to earn Bitcoin and increase their holdings of altcoins. The amount of interest earned on such platforms usually depends on the amount and duration of what you have deposited into your account.
Of course, there are other alternatives to BlockFi. One of them is Hodlnaut – the crypto interest account that actually earns 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 make a decision on anything.
2. Loans
Crypto lending is an emerging financial service where crypto users borrow loans against their coins, like a traditional collateralized loan. Because most cryptocurrencies do not have a central point of control, some lenders connect lenders and borrowers, matched directly on the platform as a peer-to-peer network. The interest that a borrower repays is received by the lender. Meanwhile, both the lender and the borrower continue to benefit from the price increases realized by their holdings.
There are also crypto startups whose main function is to create a lending environment. Although they still operate through a peer-to-peer network, the platforms earn a percentage of the loans offered through them, as profit.
3. Turn off
Staking is almost the same as hosting nodes on a network. The difference is that anyone can bet, as there is no minimum number of coins required for it to work. There are several coins that offer staking services with interest.
4. Margin financing
Margin financing goes hand in hand with margin trading and is a route chosen by those with low risk. This is a feature offered on exchanges where users who prefer not to trade finance trades for other users. Major exchanges, including Bitfinex, Poloniex and Bitmex, operate this service. To earn interest on margin financing, users put coins they want to lend out into separate financing wallets.
There are margin financing bots available for those who don’t want 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 earn interest when held. The retained coins help secure blockchain platforms. Therefore, some entities reward users for holding with the intention of encouraging holding rather than trading.
6. Voting for DPoS delegates
Another interesting way to earn interest through cryptocurrency can be summarized in ARK’s approach. ARK is a third-generation Blockchain platform that uses a Delegated Proof of Stake (DPoS) as its consensus mechanism. It therefore needs users to help run the network. However, unlike PoS and PoW, where people independently volunteer to complete tasks, delegates are voted on. Delegates are the equivalent of Masternodes and Miners.
To become a delegate on ARK, one must pay the network 25 ARK to be registered as a delegate. They then create strategies, similar to campaigns, that are used as a basis for other users to vote for them.
Delegates are rewarded for confirming transactions on the network. As such, as a delegate nominee, you will devise a profit-sharing strategy that will be used to share the profits with the voters as dividends. Owning ARK coins gives one direct voting rights, 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 passively earn interest from your crypto holdings. If you would like to add to the list, please share your ideas in the comments section.