FX.co ★ Top 3 ways to earn passive income on cryptocurrency assets

Lending

Lending is one of the most popular ways of passive income. Cryptocurrency lending is a form of Decentralized Finance (DeFi) where investors lend cryptocurrencies to borrowers in exchange for interest payments. The transferred funds are locked in a smart contract. Crypto exchanges find it profitable to deal with such investors, because lending increases the liquidity of the exchange’s capital. One example of such an exchange is Binance. It offers two types of lending - flexible terms contracts and fixed terms contracts. A flexible terms contract has low interest rates, and you can withdraw or add funds at any time. A fixed terms contract is set for a fixed period of time (10, 15, 30 days etc.) and has much higher interest rates then flexible terms contracts, but you cannot withdraw funds until it expires.

Staking

Staking is another effective way to receive passive income. It means locking crypto funds in the Proof of Stake algorithm (PoS) to support the operations of the blockchain network. The token holders earn rewards in coins for doing so. Only cryptocurrencies using PoS, such as EOS, Tezos, Tron, and Cosmos - allow staking. Using staking depends on the investment strategy. Staking is an excellent additional source of income. However, a holder of the crypto asset should understand that it is impossible to sell the token for a long period of time. It can bring investors from 3% to 15% returns per annum. Tokens that have a medium-term uptrend are the most promising for staking.

Crypto funds investment

Investing in reliable cryptocurrency funds is the third way to earn income passively. It is more suitable for beginners. A lack of experience in trading is not a problem, as you can entrust your assets to a crypto fund and make a profit. When dealing with them, the main risks are negotiated in advance. That is why, you don’t have to worry about your assets. Traders are recommended to learn about the fund's reputation before starting out.