Big price jumps and 100x profits get a lot of attention from experts and influencers in the cryptocurrency community because they offer the hope of fortune overnight.
In reality, these possibilities are few and far between. Not to mention that only a handful of traders actually manage to catch these waves and cash out money in time to secure life changing money.
Fortunately, the sharp rise in prices for crypto investors is nowhere near the only way to make money, and the recent rise in decentralized funding (DeFi), non-fungible tokens (NFTs), and slow progress in mainstream crypto adoption offer one nearly endless stream of investment opportunities.
Let’s look at five different ways crypto owners can easily make money without actually having to trade.
Staking, which rewards users for locking tokens on a log as security for transaction validation, is one of the best ways to get a return on assets held in a crypto-based portfolio.
In August, the Ethereum network will switch from a Proof-of-Work (PoW) consensus model to a Proof-of-Stake (POS) model, and Ether (ETH) holders who participate in the Eth2 contract will be able to do so earn up to 5.83%. .
As part of this new PoS system, token holders take an active part in transaction validation by locking their coins in nodes on the network, which then compete for a chance to verify transactions, create new blocks and receive the rewards associated with them.
Data from Staking Rewards shows that wagering 10 Ether currently results in weekly earnings of 0.0075 ETH, worth $ 17.96 at current prices, and annual earnings of 0.3876 ETH, currently worth $ 933.69.
The percentage return for Ether will decrease as more tokens are blocked on the network, so the final earnings may change.
Currently, the five largest crypto assets by value used are Cardanos ADA, Ether, Solana (SOL), USD Coin (USDC) and Polkadot (DOT).
All in all, staking offers one of the best low-risk ways in the crypto space to gain a bigger stack regardless of market sentiment or performance while supporting the network through transaction validation.
Borrow crypto for low risk returns
The growth of the DeFi sector led to the development of a diverse crypto credit ecosystem where users can deposit their cryptocurrencies into various credit protocols to receive rewards in the underlying token or in various assets such as Bitcoin (BTC), Ether, and various Altcoins .
Aave is currently the top credit protocol and the platform offers revenue opportunities for tokens on the Ethereum and Polygon networks with its native coin MATIC.
The graph above shows the top seven credit pools available through the AAVE protocol on Polygon and the rewards are paid out in Wrapped MATIC (WMATIC) with the current percentage on deposit return (APY) 1.92% and an annual estimated APY of 6.1%.
Other top credit protocols are Curve (CRV), Compound (COMP), MakerDAO (MKR), and Yearn.finance (YFI).
Lending provides another low-risk way to get decent returns in both bull and bear markets on tokens that don’t offer user-driven rewards like staking.
Earn fees and tokens by providing liquidity
Liquidity provision is one of the main components of a DeFi platform, and investors who choose to make funds available to emerging platforms are often rewarded with high percentage returns on the amount wagered, as well as a percentage of the fees incurred through transactions within the pool develop.
As can be seen in the illustration above, providing liquidity to an Ether / USDC pool on QuickSwap entitles an investor to a percentage of the $ 23,098 of the total daily rewards paid and a fee of 33.81% APY.
Ideally, long-term investors should research the available pools in the market, and if a liquidity pair from solid projects, or even a stablecoin pair like USDC / Tether (USDT) looks attractive, it has the potential to be the blockchain version of a savings account that offers far better returns than can currently be found at a bank or an old financial institution.
Maximize yields through high yield farming
Yield farming is the concept of using crypto assets in such a way that the highest possible return is achieved while minimizing the risk.
As new platforms and protocols emerge, they provide great incentives for depositors to look for liquidity and increase the Total Value Locked (TVL) of the protocol.
Rewards for STKGHST-WETH LP deposits on DinoSwap. Source: DinoSwap
The high returns offered are generally paid out in the platform’s native token, as shown above, with a user depositing a liquidity pool token for a STKGHS-WETH pair which has an APR of 189.2% and so far a reward of 3.312. generated by DINO.
For long investors who hold a portfolio with a variety of tokens, yield farming is a way to get involved in new projects and get new tokens without having to spend new funds
Related: Because of this, DinoSwap (DINO) TVL soared to over $ 330 million a week after launch
NFT and blockchain gaming are making play-to-earn a reality
Blockchain gaming and NFT earning are another way to get a return on a crypto portfolio without spending new funds.
Axie Infinity is the most popular example right now, and the play in the game involves trading, fighting, collecting, and breeding NFT-based creatures known as the Axies.
Playing Axie Infinity generates rewards in the form of Smooth Love Potion (SLP), an in-game token used in the Axie breeding process and also traded on major cryptocurrency exchanges. Users can exchange SLP for dollar-based stablecoins or other large-cap cryptocurrencies.
According to data from Your Crypto Library, “the average gamer today makes between 150 and 200 SLP per day,” which is worth between $ 40 and $ 53.50 at current market value.
In some parts of the world, this equates to the income a full-time job offers. Because of this, Axie Infinity has seen massive increases in user activity and new accounts in countries like Venezuela and Malaysia.
Crypto investing, lending, staking, and play-to-earn blockchain games offer a much higher return on investment than traditional savings and checking account banks offer. As the blockchain sector grows, it is likely that investors will continue to flock to platforms that offer high returns for engaging with the protocol.
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The views and opinions expressed are those of the author only and do not necessarily reflect the views of Cointelegraph.com. Every step of investing and trading involves risk, so you should do your own research when making a decision.