How Cryptocurrency Users Can Get More Value From Their Investments

Earning money with cryptocurrencies is relatively simple. Asset owners can extract enormous value from their investments with little effort. However, exploring unique reward systems can prove beneficial rather than earning returns the traditional way.

Earn returns on cryptocurrency investments

The most obvious way to make money with cryptocurrencies is to buy low and sell high. The biggest assets have a chance to appreciate over time, even if the current market outlook says otherwise. This requires no effort from the user, except that he will only let go of these assets once the desired value threshold has been reached. However, there are other possibilities for those who prefer a slightly different approach.

Staking is the most direct way to combine mentality”buy and keep” with incentives. First, users must keep their coins in an internet-connected wallet. Then, if that coin’s network runs the proof-of-stake algorithm, users can earn passive rewards as long as their wallet remains connected. Several of the major currencies, including theEthereumCardano and Solana, support staking, with returns averages about 5% per year.

Some of the more exotic options for extracting value include yield farming, liquidity farming, and lending. Most of these efforts revolve around decentralized finance protocols. Users deposit funds into smart contracts and automatically accumulate rewards. However, yield farming and providing liquidity is somewhat risky, as yield rewards can be volatile assets, and liquidity can suffer from impermanent losses. However, they can provide decent returns, assuming one is willing to stay on top of the gains and adjust as needed.

The loan is relatively self-explanatory. Users make their crypto-assets available to another user in exchange for reimbursement and interest. It is possible to explore the loan in a centralized or decentralized way. Both have advantages and disadvantages, depending on risk appetite and convenience requirements. Depending on the asset used for lending, returns can be on par with staking or slightly higher.

Unique reward systems are gaining popularity

It is common to find ways to extract value from cryptocurrency investments through seemingly unusual reward structures. People were therefore delighted when Pancake Swap introduced a way for liquidity providers to stake their LP tokens and earn $CAKE. This momentum was further enhanced by the fact that they can also wager $CAKE for other $CAKE rewards. In essence, it’s a tiered reward system in a single Dapp.

Another unusual way to earn on investments – although very similar to buy and hold – is to focus on DAOs. Specifically, decentralized autonomous organizations, or CAD, are collectively owned by investors and community members. One can either join a DAO early on and receive rewards for being active, or invest in the token and participate in the project to create value. Additionally, some DAOs may issue generated profits to token holders, which may lead to a passive income stream. The success of the DAO will influence everyone’s performance.

Affiliate programs are also experiencing a revival in the age of Web3. Zonda Exchange, for example, offers users up to 80% of the commission paid by their downline. Also, unlike traditional exchanges, the Zonda exchange has an individual version and a professional version, one focusing on mass adoption, the other offering tailored credit limits and support. additional. The affiliate program will soon see the native integration of Zonda tokens.

Passive and active opportunities

Regardless of how one wishes to approach the cryptocurrency industry, extracting value from cryptocurrency investments is possible for everyone. Some methods require a more hands-on approach, such as Zonda’s affiliate program or helping a DAO you’ve invested in succeed. Others, like liquidity farming on PancakeSwap, require a little initial setup to start collecting all the rewards and can be run on autopilot afterwards.

Additionally, these options exist in addition to other passive yield farming solutions, such as staking and traditional liquidity farming. Also, the “buy and hold” mentality often suits those who are risk averse. The industry offers something for everyone, and the number of choices available continues to grow every year.

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How Cryptocurrency Users Can Get More Value From Their Investments

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