Staking on major blockchains
- Risk: low
- Yield: between 3 and 6% per year
Staking is a great way to get started in cryptocurrency. It is less risky than speculation or active trading. Many chains relying on the consensus mechanism Proof of Stake offer staking of their native tokens.
They use validators that verify transactions and create new blocks. For this, they must have a certain amount of the native crypto. Investors like you and me might not want to become direct validators because of the technical part. But we can delegate our tokens to validators and earn passive crypto income in proportion to our investment.
Many cryptocurrency exchanges also offer solutions for staking without going through technical steps.
When we talk about major blockchains, we are referring to those in the Top 15 of CoinMarketCap : Solana (SOL), Terra (LUNA), Binance Coin (BNB), Cardano (ADA)etc.
PASSIVE INCOME – COMPOUND INTEREST – DIVERSIFICATION
– In staking, these $EGLD earn me more EGLD every day (30% initially, about 13% now)
– These EGLDs triggered an airdrop of $MEX…
— Hellmouth Banner – Road to the PICS (@TCryptocurrencies) April 16, 2022
Yield farming with stablecoins
- Risk: low
- Yield: 1 to 20% per year
Many DeFi protocols, but also centralized (CEX) and decentralized (DEX) exchange platforms offer the possibility of placing your stablecoins (USDT, USDC, UST, etc.) in order to generate passive income.
See how to choose the best stablecoin.
The appeal of stablecoins is increased and a large volume is traded every day. Like in a bank, your stablecoins are used in loan or cash pools. And that generates a return.
Read also Good news for Terra: LUNA crypto increases by +17%, as UST becomes the third largest stablecoin in the world!
Rewards vary depending on the volume or usage of your tokens, as well as whether or not you receive returns in the form of the platform’s native token.
Another advantage of stablecoin yield farming is that their price remains fixed. So no risk of impermanent loss.
Become a liquidity provider
- Risk: medium
- Yield: 5 to 500%
Without liquidity pools and liquidity providers, the world of DeFi and decentralized exchanges (DEX) would not exist. Liquidity providers donate their assets to both sides of the pool, for example 50% in UST and 50% in SOL. You will get a share of the fees when traders trade in this pool.
⚡ The aUSD/KAR reward pool is now live! Become a liquidity provider and earn from 300k $aUSD rewards.
Other pools in the Liquid KSM Staking Tsunami program include:
▶️ taiKSM (KSM/LKSM stableswap)
Contribute and earn here: pic.twitter.com/6hnLkCicYt
— Karura – DeFi Hub of Kusama (@KaruraNetwork) April 21, 2022
These pools of liquidity allow for greater profits, but they are also more vulnerable to risks, such as impermanent loss or the failure of the protocol in question.
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Earn cryptocurrencies while you sleep? 3 methods to generate passive income to discover – The ₿log
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