In the traditional sense, a dividend is a distribution of a portion of the profits generated by a security or a corporate action. Now you wonder if cryptocurrencies can offer dividends? Surprisingly, a similar concept exists in the crypto ecosystem.
Discover a list of the main cryptocurrencies that pay dividends by reading the rest of this article.
What are crypto dividends?
Crypto dividends represent a form of profit sharing that is paid out to investors as part of the income or fees of a crypto project. In most cases, crypto dividends are offered as an incentive to support the growth and development of a project, while maintaining its internal currency.
In traditional finance, dividends are paid to shareholders based on the number of shares they own in a company. The same goes for the crypto sector. Token holders earn rewards, akin to dividends, based on the number of tokens they own.
Most of the time crypto dividends are distributed automatically, so investors are not required to take any specific action to receive their payouts.
This is usually the case with tokens from exchanges that pay their holders a share of the revenue or transaction fees. Conversely, some reward-paying cryptocurrencies require you to hold your tokens in a specific wallet to receive the profits.
The best cryptocurrencies that pay dividends
Now let’s look at five popular dividend-paying cryptocurrencies you could invest in today.
AscendEX, previously known as BitMax, is a Singapore-based crypto exchange. The project ecosystem is powered by the token ASD, which is an ERC-20 token. By holding ASD, investors can earn dividends in the form of automatic airdrops. The platform has a tiered reward system that provides the opportunity for users to earn more rewards based on the number of ASD tokens they own.
AscendEX pays its dividends using a staking system which allows users to earn up to 50% of network profits. In other words, if your investment increases by 10% then you will be paid 50% of that increase. The other half is injected back into the network, which means that if your investment is reduced by 10%, then you will still get half of what you had previously. The dividend payout is calculated using the following formula: (Total Requested Volume / Accumulated Volume) x 50% + 0.1%.
Additionally, users can also purchase an ASD Investment Multiple Card, which can be used to earn additional rewards.
Bibox is a digital asset exchange that was launched in 2017 in China. It offers a wide range of trading options and features, including wallet and storage service.
Bibox has its own native token, the BIX, which is an ERC-20 token. You can trade BIX on the Bibox platform or via the mobile app. The main goal of the project is to allow users to easily buy and sell crypto assets. Note that users benefit from reduced transaction fees and quick withdrawals.
To earn dividends (staking rewards) with Bibox, you need to lock 500 BIX tokens in your account and make at least one trade per week. By completing these tasks, you will receive a percentage of all transaction fees generated by your account as a reward, and this with a APR of approximately 8%.
KuCoin is a very popular exchange platform based in Hong Kong since its launch in September 2017. In addition to its large liquidity, the exchange is also popular due to its fast transactions, nice interface, and overall easy-to-use platform.
KuCoin offers a huge assortment of cryptocurrencies and trading pairs to its users. The platform also remunerates the holders of its Kucoin Token (KCS) through daily dividend payments. Every day, dividends are issued from 50% of all fees collected from users of the KuCoin platform.
Like the other tokens mentioned above, the KuCoin (KCS) token is an ERC-20 token that runs on the Ethereum blockchain. In addition, KCS holders earn dividends by staking their tokens on the platform. The daily wages represent a average annual return (APR) of 5.59%.
Finally, it should also be added that it is possible for users to vote on new crypto listings as well as promotions thanks to their participation in KCS. The more tokens you hold, the greater your decision-making power.
Previously known as AntShares, NEO is a platform that allows the generation of digital assets or smart contracts in order to exchange them. The platform offers developer tools that allow users to build their decentralized smart contracts and applications (DApps). As a result, NEO is sometimes referred to as the “Chinese Ethereum” on the networks.
The NEO ecosystem is powered by the GAS, an internal currency that serves to reward the staking/holding of tokens via crypto dividends. GAS tokens are distributed based on how long you hold your NEO tokens, so the longer you hold them, the more you earn. As it stands, you receive 0.0003 GAS per day for each NEO you hold, corresponding to an annual return of approximately 2%.
Note that GAS is a native token of the NEO ecosystem, so it is different from the gas we usually refer to and which corresponds to transaction fees on Ethereum.
Born in 2015, VeChain is a platform that specializes in smart contracts like Ethereum and NEO. The project relies on a solid and eco-friendly blockchain ecosystem.
The native crypto of this project is the VET, it is an ERC-20 token operating on the Ethereum network. Keeping the token token VET in your wallet, you will be rewarded with tokens VTHORnamely another token of the VeChain ecosystem.
Dividends are paid quarterly and depend on the amount you have invested. Currently the rate for 1 VET is 0.00042 VTHOR, which translates to a 1.4% annual return.
Are there dividends in the crypto universe? The answer is yes ! Although technically, they are not really dividends by definition. Rather, they are rewards paid out in cryptocurrencies.
If you want to generate profits in the form of passive income from your crypto investments, one of these five options might interest you.
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Here are five cryptocurrencies that pay dividends
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