The mainstream has smelled the benefits of cryptocurrencies such as Bitcoin and Ethereum, but many people do not know that cryptocurrency users can also earn passive income. Although financial industry players only bring savings accounts of 0.35% to 0.60%, through the use of certain strategies, digital currencies can bring savings accounts of 1-17% or even higher income.
Crypto gains exceed savings accounts
You may have heard the term “let your money work for you” in the past, which is the result of a savings account earning a certain percentage of interest over time. Of course, one might take risks and invest in stocks, etc., but with a savings account, the money just sits there and returns for a period of time. The more funds held, the more interest the account will earn, but nowadays, banks don’t like to give interest. We can see that according to the best savings account exchange rate on bankrate.com, some top banks in the world will only give a return of 0.35% to 0.60%.
Now, you can do the same with cryptocurrencies and get a better annual return (APY). Many centralized exchanges can mortgage or hold digital assets on the trading platform for a period of time with an interest between 1-12%. For example, on the trading platform Coinbase, holding USDC can earn 1.25% APY. Coinbase aso can reward Algorand (ALGO), Cosmos (ATOM) and tezos (XTZ). These three tokens can see daily (ALGO), every three days (XTZ) and weekly (ATOM) payout rates.
One can also take advantage of the Crypto.com exchange, which provides customers with multiple cryptocurrencies ranging from 2% to 6.5% (PA) per year and up to 12% of specific stablecoins. Crypto.com users can choose an interest rate by choosing a period, which can be flexible, one month and three months.
Flexibility means that you can withdraw and use cryptocurrency at any time. For supported crypto assets, you can get 2%, and for stable coins, you can get 8%. A 30-day period on Crypto.com allows the person to obtain 4.5% of the average encrypted assets, while stablecoins can be as high as 10%. The 90-day period of tokens such as ETH and BTC has accumulated to 6.5%, while stable coins such as USDC can increase by 12%.
Coinbase and Crypto.com are not the only exchanges or custody solutions that offer interest-bearing accounts. Blockfi, Linus, Outlet Finance, Gemini, Kraken, Youhodler, Coinloan, Nexo and Celsius Network also provide other interest-bearing products. Everyone has different terms and interest rates, depending on the crypto assets they hold.
Most of these platforms provide a higher percentage rate for stablecoins, because crypto assets backed by law can bring greater returns to depositors. Of course, the custody solution is coins held by a third party, and those who choose to arouse interest in this way should understand that there are greater risks. The hosting platform may fake reserves by making bad business decisions, be hacked, and even put the company into trouble. Since the old adage is “not your keys, not your coins”, holding funds on an exchange means you trust them.
Using proof of equity tokens, Ethereum 2.0 mortgage
Individuals who want to earn passive income can also do so by using non-regulated platforms and mortgage concepts. Mortgage involves the use of Proof of Stake (PoS) encrypted assets, and the person needs a mortgage wallet to perform this function (verification of transactions) to obtain shares. Similar to a savings account, staking only means holding assets and getting reward coins for the amount held by the user. The more tokens held during staking, the more interest the user will gain.
Currently, some people are using the new ETH 2.0 mortgage function to pledge Ethereum (ETH). However, in order to earn ETH in a non-custodial manner in this way, users need a total of 32 ETH to participate. Although, this person’s PA income is between 5% and 17%. People can also pledge ETH through custody of exchanges such as Kraken and Coinbase. Coinbase on the San Francisco Exchange gives “Any ETH you invest in a reward of 3-7.5%.”
Defi application based on Ethereum, Bitcoin Cash, Polkadot and Tron
In addition, in addition to betting, people who want to obtain a return on their encrypted assets can also do so by using decentralized finance (defi) applications. There are a large number of defi applications, such as Compound, Aave, Nuo Network, Ddex and Dydx, which can provide people with returns by providing liquidity or borrowing. Today, a large part of these non-regulatory defi applications also provide higher returns for stablecoins.
Using these types of applications, people can use TRC, LINK, DAI, ETH, WBTC and USDC and many other ERC20 tokens for a period of time to earn income. In addition, there are other blockchains that are moving towards creating a defi ecosystem, including networks such as Tron, Bitcoin Cash, EOS, and Polkadot.
An example on the BCH network is the Anyhedge protocol developed by the General Protocols team, a concept that allows people to use BCH in conjunction with the non-custodial application Detoken.
“The first product available on Detoken is the Anyhedge BCH-USD futures contract,” the team detailed when launching the application for the first time. “This is a smart contract that allows users to hedge or make long BCH while earning a premium on funds. Users can also control their own money throughout the process.”
All the aforementioned platforms and tools provide people with opportunities to make money. Individuals can earn returns by doing what they might do, until they know they can earn interest-just hold. As long as the demand for encrypted assets remains strong, this form of decentralized liquidity will continue to grow.
If the rate of mass adoption continues to increase, liquidity and potential gains will only get better over time. Once mainstream banks catch up with these interest rates, which are much higher than the bank’s small interest rate of 0.35% to 0.60%, they will soon want to transfer funds to something that can arouse real interest.
What do you think of all platforms and services that allow people to earn passive income simply by storing their encrypted assets? Let us know your thoughts on this topic in the comments section below.
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