17 September 2021
Do you want to be compensated for your HODLing? Here are five simple ways for Crypto investors to profit without having to trade.
Large price spikes and a 100x profit get a lot of attention from pundits and influencers because they promise instant wealth. These opportunities are scarce. Furthermore, only a few traders can ride these waves and cash out in time to lock in life-changing profits.
Fortunately, capturing a major price jump is far from the only method for Crypto investors to profit, and the recent growth of decentralized financed (Defi), non-fungible Tokens (NFTs), and the steady march of mainstream Crypto adoption give a seemingly unending supply of investment opportunities.
Let's take a look at five potential ways Cryptocurrency holders can generate money without needing to trade.
Staking is one of the best ways to earn a yield on assets stored in a Crypto-based portfolio by rewarding users for locking Tokens on a protocol as collateral for transaction validation. From August, the Ethereum network will see a transition from a proof-of-work (PoW) to a proof-of-stake (POS) consensus model in August, and Ether (ETH) holders who take in the ETH2 contract can earn up to 5.83 per cent.
Token holders actively participate in transaction validation under this new PoS system by locking their currencies in network nodes, which then compete for an opportunity to validate transactions, generate new blocks, and reap the rewards that accompany it. According to Staking Rewards, a stake of 10 Ether generates a weekly earning of 0.0075 ETH, which is presently worth $17.96, and an annual earning of 0.3876 ETH, which is currently worth $933.69.
As more Tokens are locked on the network, the percentage yield for Ether drops; therefore the final rewards may vary. Cardano’s ADA, Ether, Solana (SOL), USD Coin (USDC), and Polkadot are the Top five Crypto assets by staked value right now (DOT). Overall, staking is one of the best low-risk ways to grow your Crypto holdings regardless of market mood or performance while simultaneously contributing to the network’s stability through transaction validation.
2. Lend Crypto for Low-Risk Yields:
The development of a diverse Crypto lending ecosystem, where users can deposit their Cryptocurrencies to various lending protocols in exchange for rewards in the underlying Token or different assets such as Bitcoin (BTC), Ether, and various Altcoins, has resulted from the expansion of the Defi sector.
Aave is now the most popular lending protocol, and its native coin MATIC provides yield chances for Tokens on the Ethereum and Polygon networks. The chart above displays the top seven lending pools offered on Polygon over the AAVE protocol, with rewards paid in Wrapped MATIC (WMATIC) and a current deposit annual percentage yield (APY) of 1.92 per cent and a yearly predicted APY of 6.1 per cent. Curve (CRV), Compound (COMP), MakerDAO (MKR), and Yearn. finance are some of the leading protocols (YFI). In both bull and bear markets, lending offers another low-risk opportunity to earn a reasonable yield on tokens that don’t offer user-controlled rewards like staking.
3. Earn Fees and Tokens From Providing Liquidity:
Investors who opt to supply funds to new platforms are often rewarded with high percentage returns on the amount of stake, and a percentage of the produced by transactions inside the pool, as one of the major components of a DeFi platform.
An investor that adds liquidity to an Ether/USDC pool on QuickSwap will receive a portion of the $23,098 in total daily dispersed prizes as well as a fee APY of 33.81 per cent. Thus, Long-term investors should research the available pools on the market, and if liquidity pair comprised of solid projects, or even a Stablecoin pair like USDC/Tether (USDT), looks appealing, it has the potential to be the Blockchain version of a savings account that offers far better yields than any bank or legacy financial institution can currently offer.
4. Maximize returns by yield farming:
Yield farming is the practice of putting Crypto assets to work in a way that maximizes profits while avoiding risk. As new platforms and protocols arise, they provide strong incentives to depositors to mine for liquidity and increase the protocol’s total value locked (TVL).
The high yields are typically given out in the platform’s native Tokens once a user has deposited a liquidity pool Token for an STKGHS-WETH pair with an APR of 189.2 percent and a reward of 3.312 DINO so far. Yield farming is a means for long-term investors with a diverse Token portfolio to gain exposure to new projects and acquire new Tokens without spending additional money.
5. NFT and Blockchain Gaming makes ‘Play-to-earn’ a reality:
Another technique to generate a return on a Crypto portfolio without investing additional funds is through Blockchain Games and NFT collection. The most famous example right now is Axie Infinity, in which players trade, battle, gather, and produce NFT-based animals known as Axies. Smooth Love Potion (SLP), an in-game Token that is utilised in the Axie breeding process and can be traded on major Cryptocurrency exchanges, is earned by playing Axie Infinity. SLP can be exchanged for dollar-based Stablecoins or other large-cap Cryptocurrencies by users.
Also Read: How does NFT Games Work ?
According to data from Your Crypto Library, “today, the average gamer makes between 150 and 200 SLP every day,” which is valued between $40 and $53.50 at current market value. In certain places of the world, that equates to a full-time wage. As a result, Axie Infinity has witnessed a big increase in user activity and new accounts in countries like Venezuela and Malaysia.
Traditional banks give a substantially lower return on savings and checking accounts than Crypto investing, lending, staking, and play-to-earn Blockchain games. As the Blockchain industry matures, investors are likely to flock to platforms that provide significant returns in exchange for participating in the protocol.
Disclaimer: The author’s views and opinions are for informational purposes only and do not constitute financial, investment, or other advice.