The world of cryptos offer you multiple ways of investing in crypto assets. These include active ways to investing, such as trading and long term investing (HODLing). On the flip side, there is a more passive way of earning despite being in a raging crypto bear market. Here’s a list for you, disclosing all the 7 ways how you can make passive earnings in crypto bear market through a crypto bear market strategy. To be able to remember all the strategies of making passive crypto earnings in bear market, we have simplified it into an acronym for you.
What is LAMSDAY you may ask. Well, it comprises of the following:
- Affiliate marketing
- Dividends Payout
- Airdrops & Forks
- Yield Farming
It must be noted that the order of this list is in no way determinant of the applicability or efficacy of these strategies. All these methods are equally applicable to make passive earnings in the crypto bear market 2022. Now let’s dive deeper into this:
Top 7 Ways to Make Passive Crypto Earnings
Lending in cryptos is a process of depositing a crypto to a pool that is then lent out to other borrowers in return for regular interest payments on the principal lent out. All of these interest payments are also typically made in the form of cryptos that is deposited itself, and is compounded on a daily, weekly or monthly basis.
For investors who do have some cryptos they are HODLing onto but want to make some crypto passive earning on the side, lending is one of the most popular ways to do so. There are two main kinds of crypto lending platforms:
- decentralised crypto lenders
- centralised crypto lenders
Decentralised crypto lenders: As the name suggests, these are essentially open source smart contracts built onto the blockchain platform that collects cryptos from interested lenders and lends them out to interested borrowers through a system of rules that is enforced wholeheartedly.
Centralised crypto lenders: On the flipside, centralised crypto lenders are pretty much like the usual banks which work in a centralised system instead of being a program as is the case with the decentralised crypto lenders.
Both these kinds of platforms offer extremely high interest rates, sometimes as much as 20% APY (annual percentage yield) and both typically require borrowers to deposit a collateral to access the loan. However, as a note to investors, this can be an extremely tricky environment to work with and hence a thorough research into the background and history of the platform his highly necessary before investing your hard earned money into it.
Additional Read: Lending and Borrowing in DeFi
This is a method of earning passive returns from the crypto market for those who wields some sort of influence over a large number of people. This could include social media influencers, actors or anybody else with a large following. All that person needs to do is share their referral link with their followers, family or friends. If these followers, family or friends do end up clicking on that link, and investing in that crypto, you would end up getting some value out of that! This is probably one of the simplest ways to make passive earnings in crypto bear market in 2022.
This another very popular way of making passive earning from the crypto market. Mining in the world of cryptos is simply the process of solving complicated mathematical problems using your computer’s processing power and competing to solve it and completing the next block on the blockchain and get rewarded in cryptos for performing that task. This is primarily a method used for proof-of-work (PoW) consensus mechanism based blockchains.
However, it must be kept in mind that this kind of passive earning strategy in the crypto space requires a huge amount of initial cost of getting a mining rig up and running. It requires investing in expensive hardware, setting them up and also requires 24×7 power supply to keep the mining rigs chugging and earning you returns. This is primarily because of the fact that the crypto space has expanded very quickly in the last couple of years which has brought in a lot of people into the mining sector too, thus the competition is high and you as a newer entrant need to equip yourself with newer and faster processors to compete against them. This method requires a lot of technical know-how to operate and run efficiently to make money too.
Staking is another popular way of making a passive earning from the crypto space. If you own crypto tokens and you wish to participate in a proof-of-stake (PoS) consensus mechanism based blockchain network’s validator protocol – staking is the way. Staking is simply when you lock your crypto assets for a set period of time to support the operation of a blockchain. As a reward for staking your cryptos to the protocol, you are enabled to earn more cryptos.
This method too is a capital intensive mechanism since you have to invest in those cryptos before you can stake them. Also, after staking them, those cryptos will be locked away for a predetermined period of time. Secondly, holding those crypto assets bring about the risk of price devaluation of the crypto.
Additional Read: How to Stake ETH?
Quite similar to the dividends paid out to investors by traditional businesses listed on the stock market, crypto dividends or rewards are also paid out by crypto firms to early investors in their crypto ecosystem. It is a form of passive earning in the crypto bear market where crypto dividends or rewards amount is often based on the amount that is staked or held. It depends on the scheme, and may require the holder to take an action such as staking or creating a transaction to claim these rewards.
This is another one very popular method of earning crypto literally while you sleep!
Airdrops and Forks
The next cool way to earn crypto while you sleep is airdrops. Airdrops can be distantly related to bonuses meted out by traditional listed companies in the stock market. It is typically done as a marketing attempt by new and upcoming crypto projects to create hype around them. Airdrops involve sending small amounts of crypto tokens or coins to wallet addresses after a certain action is performed successfully, typically a retweet, or sharing a post on some other social media. The ultimate goal of a crypto airdrop is to promote awareness and circulation of a new token or coin.
While this method isn’t a very reliable and a consistent way to make passive earning from the crypto market, however, it is definitely a very lucrative one. One of the best examples would be the ApeCoin (APE) crypto airdrop to all Bored Ape Yacht Club (BAYC) NFT holders. ApeCoin’s token APE listed at a healthy premium to base values and made a lot of money, pretty much for free, overnight. These APE token which were airdropped to BAYC NFT holders could be sold immediately for a 100% profit.
Coming to forks, whenever a hard fork happens, if you are holding crypto tokens of the original existing blockchain, you will be eligible to receive rewards and additional cryptos too!
Additional Read: Crypto Airdrop Taxes
Last but not the least, comes yield farming and this is arguably one of the most popular kinds of passive earning methods by retail and small crypto investors. Yield farming is basically the process of using decentralised finance (DeFi) to maximise returns from holding cryptos. Users lend or borrow cryptos on a DeFi platform and earn crypto for their services. It is basically a solution where smaller investors can contribute to a pool from which borrowers can borrow from.
Yield farmers generally use decentralized exchanges (DEXs) to lend, borrow or stake coins to earn an interest on the amount lent and even be able to speculate on price swings. Yield farming across DeFi is facilitated by smart contracts on the blockchain — these are pieces of code that automate financial agreements between two or more parties.
In conclusion, we can all agree that passive earning is a very useful way of earning from your existing crypto assets without having to do anything about it. Introducing, CoinDCX Earn! CoinDCX Earn is a brand new and easy way for investors to make passive earnings on their idle crypto investments. Given the volatile nature of crypto assets, CoinDCX Earn allows investors to add secured passive earnings of up to 13% in addition to benefiting from market movements in the long term.
Head over to CoinDCX Earn now to learn more about the various APYs offered and earn passively and easily from your investments!
Read more on What is CoinDCX Earn?