How to Maximize Your Crypto Passive Income

July 8, 2024

| Stay Ahead In The Crypto Revolution.|

“Ugh! I have too much money. I don’t need any more,” said no one ever.

The truth is that money is important, and if you hold crypto, you can turn your digital assets into a productive source of cash flow.

For years, I’ve been studying various passive income alternatives in the crypto space. In this article, I’ll show you exactly how to make money while you sleep.

But how?

Patience, my friend. I’m getting there.

As Warren Buffett once said, “If you don’t find a way to make money while you sleep, you will work till you die.”

Let’s face it: no one wants to work until their last breath. Relying on savings alone can be disappointing. The key to financial freedom lies in generating passive income.

Passive income is the secret to building long-term wealth, and in the world of crypto, trading, and investing aren’t the only ways to make money. You can use your existing assets to generate additional passive income, which is precisely what this article is about.

I’ll be exploring the different methods to earn passive income and rewards from the crypto you already own.

If you aspire to be financially free, building a passive income stream is crucial. So, stick around and learn how to make your crypto work for you.

How to Generate Passive Income From Crypto

According to Defillama, $100 billion of assets are locked in DeFi. This means that these $100 million are generating passive income for their investors—and maybe you should join them, too!

Here are four ways to earn passive income in crypto. I’ve used and tested all of them over the last few years.

Although they are tested and trusted ways to earn passive income, they are not without their risks, so be sure to do more research before committing to any of them.

1. Staking

Crypto staking is a popular way to earn passive income in crypto. It offers a way of earning rewards for holding certain cryptocurrencies.

It is a process where you lock up your cryptocurrencies on a platform or protocol for a specific period, and you earn a fee in return based on the amount staked and the duration. This is done to support the blockchain’s network.

Cryptocurrencies that use consensus mechanisms, such as Proof of Stake (PoS) and Delegated Proof of Stake (DPoS), offer this type of passive income.

I’ve been personally staking all the cryptocurrencies below. This is a simple and easy way to generate some crypto passive income.

Here are the approximate yields you can get for staking, according to

  • Ethereum: 3.3%
  • Solana: 7.2%
  • Cardano: 3%
  • Sui: 3.3%
  • Avalanche: 8%
  • Polkadot: 11.5%
  • NEAR: 9%

So, if you have any of these cryptocurrencies, why not stake them to get extra rewards?

There are different places where you can stake your crypto, but most wallets nowadays have built-in staking functionality.

If you have your crypto on exchanges such as Kraken, Coinbase, Binance, or OKX, you can also stake your crypto there.

To stake Ethereum, I would recommend taking a look at stakingfarm.

Benefits of Staking

  • The biggest advantage of staking is you will earn extra passive income. This is pretty obvious.
  • Aside from this, you’re also helping to secure the network, and you’re also getting paid for it.
  • Staking helps you to turn your crypto into a productive asset.

Risks of Staking

  • Staking sometimes has lock-up periods, meaning that if you want to sell your staked crypto, you might need to wait a few days to unlock it.
  • Note that staking is a long-term strategy, so if you are a long-term investor, losing liquidity and lock-up periods will not matter.
  • There is also the risk of slashing penalties, but this only applies if you are running a staking node yourself.
  • Finally, some protocols have minimum staking requirements, and if you don’t have up to the minimum stake, you may not be allowed to participate in the process.