How can I make additional passive income to supplement my salary, wage, or revenue? This is the question that keeps ringing in people’s minds but with few answers coming through. Yes, there are many options, but they come with many risks that you need to know. For example, you can trade stocks, forex, and properties, but there is one more awesome option, using cryptocurrencies.
Cryptocurrencies are digital coins designed to power their respective blockchain networks. They are developed with advanced cryptography technology that helps to prevent tampering. The coins only reside in their native blockchain networks and you can use them in different ways, such as fiat currencies for shopping and sending value. In this post, we will tell you about the simplified method of making passive income from cryptos.
What You Need to Make Passive Income through Cryptos
When the first blockchain and cryptocurrency were released in 2009, little was known about them. People were even discouraged from using them by governments and banks because they were thought to be too risky. However, more information is now available about them, and it is now clear that blockchain and cryptocurrencies have the answer to the limitations of the traditional banking systems. So, here is what you need to make passive income:
- A crypto wallet: This is a type of digital wallet designed to help you hold and manage your cryptos. You can select hot wallets that are always online or cold wallets that store the coins offline.
- Crypto coins: The coins you select will help you to access different services on blockchain networks or through decentralized finance (DeFi). Make sure to go for coins with a high potential for growth.
- A decentralized finance (DeFi) platform: Although there are some methods of making a passive income that you can do on your own, those that require the use of DeFi platforms are easier and more convenient.
Common Options for Making Passive Income
Cryptocurrencies and blockchain are only opening, growing the already long list of things you can do with them. This list is expected to grow with time, but you can get started right away. So, here are the main options you can use to make passive income:
- Buying and Holding Cryptocurrencies
This method is pretty simple because all you need is to buy the coins and hold them in your wallet. If you can identify coins with greater potential, that will be awesome because the value is expected to grow in the coming years. Good examples of high potential crypto coins that you should buy for holding include ETH, ADA, DOT, and SOL.
- Staking Your Coins
After buying crypto coins, holding them in your wallet can earn you impressive returns, but you can generate more with them through staking. This is the process of committing your crypto coins to help confirm transactions in blockchains that use proof of stake (POS) consensus protocol. In return, you are rewarded with a section of the transaction fee paid by people using the blockchain platform. The benefit of staking is that you do not sell the coins, and they will be returned to your wallet at the end of the selected phase.
- Yield Farming
Yield farming works like staking, but your coins are not necessarily used to validate transactions. Instead, they are used to provide liquidity to blockchain network users. The lovely thing about yield farming is that you earn some predetermined interest. So, you should look for platforms that provide the highest returns.
Cryptocurrencies and blockchains have ushered in a new era of banking services with no limits. You get utmost control over your finances without going through third parties like banks. In this post, we have highlighted some of the unique ways you can use to make passive income. To generate more from cryptos and keep the risks involved low; make sure to work with the best DeFi platforms, such as hi.com. At hi, you can make as high as 40% of your coins.