The cryptocurrency space suffered in 2022 as supply chain issues, the ongoing conflict in Ukraine, and rising inflation rates weighed down the world economy. Many NFT projects disappeared; We also saw the crypto collapse when Luna crashed. Luna’s landing platform, Anchor, also went down when the entire blockchain was destroyed.
That said, there are still some Ways to make money from crypto investments As a long-term investor looking for passive income opportunities. still is The right yield for staking your cryptocurrencyAnd you could theoretically create a constant flow of money from your work with NFT royalties.
Key takeaways
- You can earn crypto royalties from NFT royalty programs, staking rewards and lending.
- Investing in crypto is risky because it is a volatile asset, but long-term investors can benefit from various royalty programs.
- You can earn passive income by lending your tokens to borrowers or by staking your crypto to verify transactions on the blockchain.
How can you make money from crypto royalties?
In the cryptocurrency space, you can generate passive income from crypto lending and staking. As the name suggests, crypto lending is all about lending your tokens to borrowers at an agreed rate. Crypto staking is a little different because it involves renting your tokens on the blockchain to verify transactions.
Since no central bank controls everything and verifies transactions, companies use one of two methods to verify transactions on the cryptocurrency blockchain. Any blockchain that uses a proof-of-stake (PoS) mechanism allows staking of cryptocurrencies to validate transactions on the network in exchange for rewards, which are usually a portion of that token.
Since the Ethereum merge has led to a switch to a PoS system, you can stake your Ethereum tokens. You can also place bets Cardano, Solana and any other cryptocurrency which uses this mechanism. You can’t stake bitcoins because they use a proof-of-work system.
This article will consider crypto lending, crypto staking, and NFT royalty programs as options for making money as long-term crypto investors.
Crypto lending opportunities
In decentralized finance (DeFi), many financial products and services are built on blockchain. DeFi differs from centralized banking because of its foundation Peer-to-peer digital exchanges instead of centralized institutions Like banks. One of the most popular DeFi services has become crypto lending.
You may have seen ads from crypto exchanges telling you how much you can earn through crypto lending. You can make money from crypto lending by depositing your crypto into a lending platform that lends your crypto to borrowers seeking to secure cash loans using crypto holdings as collateral. In exchange for lending your crypto, you earn interest as you make payments.
The amount you earn depends on the platform, the type of cryptocurrency you are lending, and other possible market factors. We urge you to shop around at different exchanges and see the rates that different companies offer.
How to make money from crypto staking
A common way to make money from crypto is through crypto staking, which involves giving your tokens to the blockchain so it can verify transactions.
How can you stake crypto? Here are the steps you will likely follow if you are interested in this:
- You have to decide which cryptocurrency you want to invest in. Finding the coin you want to invest in is important.
- Find the right platform. You want to find a crypto exchange that offers competitive rates and security.
- Deposit your crypto, and stake it for an agreed time. When it comes to the verification process, it is often wise to hold your crypto on an exchange where the exchange adds your tokens to the validator’s stash. This way, you earn a portion of the rewards generated by validating transactions.
Many people will use an exchange like Binance to stake their chosen crypto. The percentage yield varies depending on market conditions.
There are two different types of staking: lock and defy. Lock staking means that you have to lock your crypto for a period of time, usually 30 to 120 days. As the name suggests, locked-in staking means that you cannot access your crypto for that agreed time.
DeFi staking has more to do with smart contracts and DeFi projects. If you try DeFi staking through a service like Binance, Binance will not be responsible for any security issues with on-chain smart contracts.
As we saw with what happened with Luna, it is important that you only invest money that you can afford to lose when it comes to staking your crypto.
NFT Royalty Programs
NFT Royalty lets you earn a percentage of your sale price every time someone buys your NFT project on the marketplace. Smart contracts complete the payout and it can range from 5-10%.
NFT royalties do not require mediation. All they need is a smart contract executed on the blockchain; Everything else is handled automatically.
These NFT programs have attracted many artists and people into the digital creator space because they can earn money directly from their work.
So, for example, an artist can sell a piece of digital art or any kind of creative project once and then profit from it many times over.
Let’s say a customer buys your NFT artwork and decides to sell it for a profit in a few months because it was limited or increased in value for some reason. You will earn royalties from those sales (anywhere from 5-10%) depending on the terms you agree to. Then after another six months, as your reputation as an artist grows or the artwork becomes more valuable again, this person decides to sell. You will once again receive royalties as stated in your terms.
Blockchain and smart contracts work together, so the rightful owner receives payment once a transaction is made.
These NFT royalty programs benefit both parties as the artist or creator of the original work is rewarded for their efforts, while the buyer rests easy knowing they are purchasing an authentic version rather than a counterfeit.
How can you make money from the NFT Royalty Program?
While the idea of making money from NFT royalties sounds simple, implementing it becomes challenging, as you have to create an NFT project that other people want to buy. Many musicians, artists and digital creators have turned to NFTs simply because they already have an established audience looking to buy from them.
You have to mint your NFT project on the marketplace so that people can buy it. The most popular NFT marketplace is OpenSea, which some have dubbed the “eBay of NFTs”. There are also rarerable and mintable.
What you need to know about crypto income
We want to emphasize that before you buy a cryptocurrency coin you share or lend it. This suggests that you are taking two different risks to earn passive income because you are not just putting cash into a savings account.
You should hope that the value of the coin remains strong when it leaves your hands. For example, if you lock up your Solana for 90 days but want to sell it because you’ve seen the price drop, that’s not an option.
What should you consider before investing in crypto royalties?
It is worth reminding you that investing in cryptocurrencies can be very risky, and the market is full of volatility. We also have to mention that regulators in the US have heavily criticized these crypto-lending platforms. Before Luna crashed, its original lending platform offered interest rates that seemed too good to be true. In hindsight, this was the case, and the platform went down.
You should also remember that your money is not protected by federal insurance. First, you have to use your fiat currency to buy cryptocurrency. Then you have to lend it or stake on the platform. Then you have to hope that the platform doesn’t go bankrupt, causing you to lose your investment. There are many horror stories of investors losing money when a platform crashes. Investors lost thousands of dollars overnight due to the crash.
How should you invest your money?
While many unique opportunities exist to generate passive income in cryptocurrency, risks are always involved.
New markets always carry an added level of risk As they find their feet. If you are an investor with a short time horizon and low risk tolerance, putting your money in more established and safer investments may be a better choice. You should not invest any money in crypto that you are not prepared to lose.
The bottom line
If you want to generate passive income from cryptocurrency, there are several options to consider. Crypto lending involves giving your crypto tokens to people who want to use them as collateral for a loan. You can earn interest on that loan. Crypto staking involves giving your tokens to the blockchain so they can use them in the validation process. This only applies to cryptocurrencies that use proof of stake. We urge you to take the time to do more research before deciding which investment to go with.
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