Have you ever wondered why some people make it big from cryptocurrency while you are always struggling to generate profit from your cryptocurrency portfolio?. It is obvious there is something they are doing which generates rewards for them apart from selling their tokens when the price rise.
Cryptocurrency as we all know is very volatile and it is the Volatility that makes it both PROFITABLE and RISKY. It now depends on our ability to devise a means to generate money from cryptocurrency investment. Time has gone by when people practice the system of buying the dip and selling during the bull. People put their tokens to work, and generate income from it.
Below are few ways by which you can generate passive reward from your tokens
1. STAKING:
People generate passive income by staking their cryptocurrency to generate rewards. The staking can be in two forms ;
Naked Staking
This is when you stake one token or coin on any staking platform to generate passive income from it. The reward can be calculated base on daily, monthly, or yearly rate ( APR).
LP Staking
This is when you generate what is called LP token by merging two different coins using platforms like Pancakeswap, Julswap, Uniswap, and Sushiswap. The first two are for coins built on the Binance Smart Chain while the last two are coins built on the Ethereum network.
Example: If a platform offers ETH/BONDLY staking, you need to supply the same monetary worth of ETH AND BONDLY.
This LP generated will offer you a reward base on the APR offered by the staking platform. When you unstake it, you will receive your ETH & BONDLY back, however, there is what we call IMPARMANENT LOSS. I will explain it in my next post.
EXAMPLES OF PLATFORMS WHERE YOU CAN STAKE YOUR CRYPTO INCLUDES;
app.mantradao.com
https://figment.io/
https://www.mycointainer.com/
2.Providing Liquidity:
Here, you will generate an LP token following the steps explained above, and then you will earn rewards from transaction fees paid by those who accessed swaps on the coins you provided liquidity for.
3.DELEGATION
You can delegate your tokens to certain proof of stake ( POS) project and you will be opportune to earn a slice of block rewards. This type of reward can be claimed at any time.
EXAMPLES OF PLATFORM WHERE ONE CAN EARN REWARDS FROM DELEGATING TOKENS INCLUDES ;
https://wallet.persistence.one/
https://figment.io/
Another great way to generate passive reward is through Yield Farming, However, it is very risky and I won't advise you to use this method.
In conclusion, if you can employ some of these methods to grow passive income for yourself, you will be surprised at how much you will be able to generate for yourself at the end of the day while still retaining your crypto will surprise you. Many people at the end of the month generate profit that they can withdraw as salary from the tokens they staked, delegated, or used to provide liquidity.
Capitalize on these opportunities and grow wealth for yourself instead of leaving your tokens idle in your wallet.
Definitely bookmarking this. Great post.
Glad you enjoyed the post
Excellent post, I've just delegated some Cardano using Yoroi wallet, although not sure what I'll get back as it takes 5 days before a reward. However, I didn't realise there was different ways to stake coins until I read this.
Thanks for the info, btw, what is yield farming? Not wanting to do anything like that, but just wondered what it was.
It is a very wide subject. It involves providing LP which is locked and you earn reward from fees . You can read all about it from the link below
https://academy.binance.com/en/articles/what-is-yield-farming-in-decentralized-finance-defi