Five ways to get the passive crypto income you may start your crypto journey with

For many of us, cryptocurrencies are associated with complex and risky earning schemes. For example, this is trading, which requires deep knowledge of the market, methods of financial and technical analysis, as well as experience in operations with crypto assets.

In fact, cryptocurrencies can consistently generate passive income. Just like a bank deposit or government bonds. Most importantly, an investor does not need to dive deep into the specifics of the crypto market. The main thing is to choose a strategy to your liking and find the best-performing crypto funds in which it is convenient and safe to invest. You can learn more about them at Chain Broker.

Hodl strategy

You do not need to be a qualified investor to earn income from crypto assets. There is an extremely easy entry into the world of cryptocurrencies for novice investors. This is the Hodl strategy. By the way, it is used not only in the cryptocurrency market but also when investing in classic financial assets such as stocks.

The essence of the Hodl strategy is very simple: you need to buy a certain amount of cryptocurrency and keep it in any wallet until the value of the coins reaches the desired level.

How effective is such a strategy? Decide for yourself. Those investors who kept within Bitcoin, say, in January 2018, even taking into account all the fluctuations and corrections of the market, have increased their investments by 5 times until today. Agree, it's impressive. And at the same time, you do not need to manipulate cryptocurrency constantly. All you need is patience as this investment can be long-term. In addition, Hodl also has disadvantages:

1. it is important that the cryptocurrency be popular with large trading volumes on crypto exchanges, as the lower the demand for it, the lower the liquidity and the probability of growth;
2. you should be careful when choosing a platform for opening a wallet and placing your funds because there have already been cases of hacking cryptocurrency wallets and stealing investors' money.

Staking: a profitable safe

Staking is called an analog of a bank deposit on a crypto market because the earning mechanisms here are very similar. As with opening a deposit in a bank, staking guarantees the investor a stable passive income for storing cryptocurrency assets. At first glance, it might seem that staking is the same as Hodl. But it`s not.

As part of the Hodl strategy, the investor is entirely dependent on the price dynamics of a particular cryptocurrency. Staking is a kind of reward to an investor for holding a crypto asset. That is, in fact, this is an analog of the income that an investor receives for opening a deposit in a bank.

The reward is paid for the fact that users who store coins thus support the circulation of a particular cryptocurrency and the blockchain on which this currency operates. Simply put, each staking participant is a kind of link in one big chain. And the more such participants, the more reliable the system and the more liquid the cryptocurrency.

Not all cryptocurrencies are suitable for staking. This is another highlight of it. The token must be generated according to the proof-of-stake (PoS) protocol. These are Etherium, Cardano, Solana, Algorand.

Yield Farming

Yield Farming is another way to make money by holding cryptocurrency assets. Cryptocurrency holders deposit their funds into liquidity pools to provide liquidity to other users. Thus, these holders become liquidity providers (LPs).

It is worth noting that the liquidity pool is a digital pile of crypto assets locked in smart contracts. Liquidity providers are compensated for adding liquidity to the pool. Compensation may come from the base fees of the DeFi platform or another source.

Different liquidity pools offer different tokens as payment methods. Once rewarded, incentive tokens can be placed in additional liquidity pools to continue earning rewards. 

Masternodes

Ways of passive income are not limited to stock trading and investments. Some blockchain protocols provide for the creation of special nodes that perform additional work to verify transactions and bring regular profits to their owners. Such nodes are called masternodes.

Masternodes first appeared in the Dash coin system. They have a privileged status compared to ordinary nodes. For example, on the Dash system, they perform the following functions:

Private send technology. The transfer is split into several parts, transferred between masternodes from 2 to 8 times, and only after that is sent in full to the addressee. Mixing allows you to "obfuscate the traces" and make the transaction truly anonymous.

Instant send. Unlike other blockchain protocols, Dash transfers can be confirmed almost instantly. It is the masternodes, which have a higher priority than regular nodes, that provide fast verification of payments.

For the content of the masternode, its owner receives a reward. Typically, the payout is fixed as a percentage of the total income of the miners. For example, in the Dash network, miners are required to give masternode holders 45% of the income when creating each new block. The amount is distributed among all masternode holders in equal proportion - but only if they clearly follow the prescribed rules.

Join a guild

If you've been picking up the hype of recent days around play-to-earn games, then you may have found that playing these games and using in-game assets and NFTs can be very time-consuming.

After all, these games really need to be played to make money. Thanks to the emergence of guilds, this is not necessary.

These are platforms that allow investors and players to work together for mutual benefit. As a rule, investors provide funds and assets, and players reliably use these assets to earn money. Profits are shared between investors and players, and often other intermediaries such as managers, who create documentation and training materials for players.

Some of the guilds allow the pooling of assets together within, while others allow direct NFT peer-to-peer lending between NFT holders and borrowers in exchange for an agreed fee.

On a final note

As you can see, taking the first steps in investing in crypto assets is not as difficult as it might seem at first glance. Today, the cryptocurrency industry offers a variety of products and services that allow you to receive an asset even without being an investment or trading expert.