The Art of Passive Earning Part 1: Staking Crypto
For me, the idea of creating an entirely passive income stream that is genuinely viable for my life and my future plans is quite exciting. Just the fact that the ability to earn income effortlessly is now somewhat easily attainable through numerous different methods holds a great deal of appeal. I mean, who wouldn't want to go about their day not even thinking about the market and whether their portfolio is appropriately configured for the possibility of both a sharp increase and a sharp retrace. While I have only been around the cryptosphere a very short period compared to many, I certainly know how to do excellent research and utilize this research to find the best opportunities for my situation. With this in mind, this series will focus on the numerous different methods that can be successfully utilized to earn your own passive income.
When I first started climbing into the rabbit hole that is the cryptosphere, I was merely using Coinbase for the “learn” feature that rewards you with specific coins/tokens once completed. The discoveries I made were simply a few places that allowed you to do basic tasks such as spin a wheel to earn some tokens. Needless to say, while I was hospitalized and bedridden for nearly the entire month of March due to appendicitis, I decided to utilize the crash and my free time to earn a decent amount of several coins. Once I got further into the rabbit hole, I discovered many other ways to earn these coins with less to virtually no work. My overall goal is to create a portfolio of passive income ventures I utilize while generating new interests in other crypto projects for future gains.
“If you do not find a way to make money while you sleep, you will work until you die.”
~Warren Buffet
Before diving into the first thing that offers some form of passive income, research needs to be completed. Without adequately vetting different projects and opportunities, it is difficult to know both the short term and long term possibilities of returns and risks involved. Of course, our psychological viewpoint makes us want the highest APY even if it seems outrageous; However, if we think logically about things, we would look for a moderate to higher APY with minimal risk. I have several specific things that I look for when vetting potential opportunities, and they vary depending on the type of offer or incentive.
Similar to most things in the world, there is an abundance of choices that offer the opportunity to earn various crypto assets in a completely passive fashion. While these options will vary in the amount of initial work involved, they all have the commonality of providing a steady crypto income. For instance, one of the increasingly common methods to accomplish this has been a hot topic lately surrounding the Dec. 1 launch of the ETH2 beacon chain. The launch of ETH 2.0 is completely changing the way that the network will be secured in that it will no longer be a PoW mining system but instead will rely on the Proof-of-Stake in which a specified amount of ETH is locked. By locking the ETH, you will receive an APY of approximately 15% from what I have found. The website Stakingrewards.com states the current return for staking 32 ETH is 16.65% per year precisely.
While staking specific cryptocurrencies has the benefits of providing a pretty decent yearly return, there are many factors to be considered when deciding which currency might be the most viable option for you. Fortunately, as I stated earlier, the opportunities are far-reaching and take many different forms. I loved it when I was naively staking in Atomic Wallet with their native token for a sweet 17% return, and the large majority of my coins were either free or dirt cheap. Unfortunately, I did not do my due diligence and properly research and merely jumped in for the high return. This lack of research on my part left me holding the coins from their peak value to about half the value. As I discovered more opportunities, I eventually withdrew from AWC and started on several new ventures. This event is merely one example of a downside to staking crypto, especially if you are purchasing a coin specifically to use for staking.
Fortunately, at this time, there is no shortage of cryptocurrencies that offer staking opportunities for a pretty decent yearly return that average anywhere from 7%-24% for some of the larger, more developed projects. While some projects like ETH offer staking, they are only available to a subset that has enough to participate. Another example of this is with a newer DeFi project that offers staking to holders with 10,000+ tokens worth roughly $30,000 at the current rate. These staking options are mostly inaccessible by the average person, but luckily there are other viable options for everyday users.
In the end, everything comes down to choices and the choices we decide to make minute by minute, hour by hour, day by day. Subsequently, with these choices comes opportunities to either continue with what you are doing and not participate in staking in these projects that have high minimum thresholds, find a way to accumulate enough to be able to participate, or do the smart thing and diversify! When you are left with three choices, and two of the three are mediocre, you must do the smart thing, and that’s where projects like ANKR come into play.
Recently ANKR created the STKR simplified staking system, which allows the average user like me who has over 0.5ETH to stake on their platform and benefit from the ETH staking rewards. This kind of protocol is excellent in my opinion because it allows users to not only benefit from staking ETH if they are dead set on going that route, and it has a low minimum requirement so people can properly diversify between high and low yield opportunities. While I only mentioned a single project that allows the average person to stake in projects with high requirements, many others are available. Even many exchanges offer similar opportunities - albeit with fewer returns.
Thank you for taking the time to read my article! I will be writing more passive earning articles that will focus on other methods of earning.
If you have any questions or suggestions for me, please do not hesitate to ask in the comments!
~ Trever Russell
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This article was originally published on Voice.com
