For those who have been in the crypto space for a long time will tell you how important passive income is for hodlers. Especially, in the bear market, passive income can keep you sane if you want to hodl your tokens long term. There are multiple ways to earn passive income with your tokens:
How to Earn Passive Income With Crypto
Airdrops are rewards you get for participating in the Blockchain’s ecosystem one way or the other. Tokens are dropped in your wallet in proportion to your current coin holdings or the nature of your contributions to the projects as a reward.
Airdrops
Airdrops are token giveaways; additional coins are distributed among existing investors and hodlers. Airdrops happen during the launch of new projects, rewards for voting on a proposal, bug bounties, and promotional purposes.
Airdrops are usually done by developers or founders of the projects. The number and percentage of tokens set aside for airdrops are usually announced beforehand to maintain transparency.
New projects announce airdrops for early users when they are about launch their new tokens, which is a great way to get people interested and create hype around the project. Meanwhile, DeFi protocols offer Airdrops to entice users of other DeFi protocols, and reward liquidity providers.
Staking
The best way to earn passive income is through staking coins. Many Blockchains, including Cardano, Nervos Network, and Solana, offer staking rewards. This of staking as a savings account where you get a percentage of additional coins based on your current holdings.
You don’t have to participate in the project, simply hodl your coins and earn passive income through crypto. Some staking mechanisms lock your coins for a certain time, while others, like Cardano, allow you to withdraw your coins at any given moment.
The percentage of rewards is decided by the developers and founders of the project. Some projects have a fixed rate, while others have a fluctuating rate.
Among the best staking programs are offered by Cardano and Nervos Network.
Hard Forks
The last but not least, Hard Forks are another way to earn income with crypto. Blockchains often experience changes to produce new Blockchains that run parallel with the original. New Blockchains can differ in utility, coin supply, and more. The best way to understand this is to look at Bitcoin Cash and Bitcoin Gold. Both are different from Bitcoin and were created after hard forks, rewarding existing Bitcoin hodlers in the process.
Another more recent example of Hard Fork is LUNA and LUNC.
Personal Recommendation
The best and safest way to earn passive income is staking. Stake your coins with a blockchain that either doesn’t lock your locks or locks them for a pre-determined and pre-announced time. Locking coins for a long period is risky due to volatile market conditions.
Want to read more about your favorite blockchains? Visit our Crypto content hub.
This news is republished from another source. You can check the original article here
Be the first to comment