Watching the passive income entering into account is everyone’s dream. It’s not impossible, however, requires a little bit of active effort at thirst.
Passive income might look a luring way to earn funds while you sleep, however, generating a stream of additional digital coins requires a bit more than nothing. And since the technologies are evolving, so do the ways of earning extra cryptocurrencies. In this article, we will review the modern practices of how to top up with the cryptocurrency wallet by using passive income apps. But first things first.
What is passive income?
Basically, passive income is funds that you earn and that does not require doing a lot of active work for making it.
Since the beginning of history, people have always looked for passively earned money, and the industry of digital assets is not the exception. The volatile and thus risky crypto space allows higher profits. However, if you are not a digital asset trader, and yet want more than simply holding your virtual coins, there are still ways to generate passive revenue.
Sponsored
With the whole cryptocurrency space evolving, the new sectors like the decentralized finance (DeFi) industry emerge offering new options that allow passive investors to yield their digital gains.
How to make a passive income via crypto apps?
DeFi is one of the most common ways to generate profit these days. The industry, which is meant to democratize and change the current global financial system, aims to bring a decentralized, more secure, and transparent way of acting. Moreover, it cuts the middlemen out of the game and allows peer-to-peer (P2P) transactions, which means lower costs and higher profits for the counterparties.
Moreover, the decentralized finance industry allows lending and borrowing digital assets with the opportunity to earn interests and thus profit from it. Here is the review of modern ways to earn using passive income apps.
1. P2P lending
Peer-to-peer (P2P) cryptocurrency lending enables digital asset holders to borrow funds from each other. The lending platform, built on blockchain technology, directly connects digital asset lenders and borrowers. Any cryptocurrency holder may lend his digital coins to the borrower and earn interest over it. The borrower in the meantime has first to deposit his virtual funds as collateral before borrowing.
There are dozens of P2P cryptocurrency lending applications online, however, Maker, Compound and Aave are the top decentralized apps at the time of publishing. Built on the Ethereum network, all these passive income apps provide a way to earn interests. Since the whole DeFi industry is booming, the crypto lending is among the best-performing ones, which means that it generates the biggest volumes and thus the profit.
However, it is important to know that since some of the P2P lending platforms like Compound also are liquidity pools, the interest rates there adjust automatically depending on the supply and demand.
2. Staking
Staking is another buzzword, recently trending across the cryptocurrency markets. The term describes the method of earning passive income just by storing digital assets locked in the cryptocurrency wallet.
This means that you don’t need to send your coins to any address or exchange them. All you do is store your coins in a digital wallet and get a reward for that. This is all connected to the Proof of Stake (PoS) consensus algorithm.
Alternatively from the Proof of Work (PoW) which benefits cryptocurrency miners with new coins for solving the mathematical puzzles and confirming transaction blocks, the PoS mechanism rewards users for validating new blocks of transactions through staking. Thus the users that stake their digital coins get the right to validate the next block and earn a premium.
The size of reward thus directly correlates with the number of coins you store in your staking wallet or designated staking pool. There are various digital currencies available for staking, that offer different reward rates determined by the protocol.
Furthermore, staking can be rewarded in different ways, that include simply holding coins or delegating them to the staking pool:
- Claiming. The classic way, where users hold their funds in cryptocurrency wallets like Atomic Wallet or Exodus or Trust Wallet for some time and claim rewards according to the number of coins they are staking.
- Delegating. The alternative option allows earning passive income by delegating the validation rights and funds to the other validators with a higher amount of coins and thus the higher chances of earning reward, which later will be shared accordingly. The method is available in staking pools like StakeCube or Pool-X.
The cryptocurrency staking is an attractive and available way to earn passive income, however, you need to keep in mind that not all digital currencies are being used for it. Furthermore, it would be helpful to have a bit of knowledge before diving into the process of staking.
3. Lottery Pools
For those interested in passive income apps, however lacking specific knowledge, there also is an alternative. A no-loss crypto lottery pool could be a way to earn a digital reward and save funds more playfully.
The digital asset lottery pools like Pool Together or BitWin24 act like savings accounts, additionally offering the ability to win a prize. Entering the lottery pool the user gets the “ticket” for each coin he deposits. The coins on the pool then earn interests and every week one user wins all the interests that accumulate during the time.
Given the fact that no-loss lottery pools are meant to act like saving protocols, the risk of losing your funds is quite low, however, the same are the chances of winning a reward. Despite the fact, it still might be an alternative way to gamify your cryptocurrency savings.
Conclusion
In general, there are various – super hot and less trending – ways of how to generate passive income by using cryptocurrency apps. The methods of how to earn extra funds by putting no or a little effort depend on the risk level you tolerate, as well as on your level of expertise and technical knowledge.
Despite the fact, for those who tend to diversify their streams of income, peer-to-peer cryptocurrency lending, staking, or storing assets with a chance to win a jackpot could be an option to consider.
