When it comes to making a passive income; there is no greater passion of mine. Especially when I'm able to do that using cryptocurrency that I have already accumulated. I'm of the belief that crypto will present us with the largest transfer of wealth we have seen in recent memory. But it won't be given easily. We all must put in the work and research now; that will help put ourselves in the best possible position.
As you know; the crypto markets have been changing at incredible speeds, especially the lending markets, and if we want to be successful we need to keep changing too.
That is why recently I have been doing a deep-dive into KuCoin and all of the ways they offer to make passive income. Hoping that it might become my next home for where I not only earn passive income, but also do most of my crypto dealings as well.
Because the original article ballooned up so large in size. I had to split up the article into 2 parts. The first part I posted earlier this week and caused heavily on crypto lending on KuCoin. YOU CAN FIND IT HERE.
Today's post will include the 2nd part of the article; which will be focusing on staking and using Trading Bots. It was a wonderful experience going through and learning everything that KuCoin has to offer, and I hope you will find it just as exciting as I did.
So without further delay, let's dig into part 2 of KuCoin: The Best Place to Earn Crypto Passive Income?
While lending crypto can be very rewarding, there is no guarantee that it will stay around forever. Or as you have already seen, the rates you receive or tiers can be a thing that constantly change. Making that stream of passive income not so passive. Staking is different, it is the process of actively participating in the validation of transactions on a proof-of-stake blockchain. For which you receive staking rewards. For that reason, staking is more of a guaranteed path for earning passive income than lending, and is one reason why I have been trying to build up my staking portfolio recently.
While taking my first glimpse at KuCoin’s staking options, once again I was taken by surprise at just how many options and offerings that are available to you.
KuCoin offers three different ways to earn interest on your coins without lending them out that could be considered staking. They are savings, staking and promotions.
Allows you to earn rewards for keeping coins in your exchange wallet without locking them up. While these rewards are typically smaller than if you had locked them up into the staking protocol. Since there isn’t any lockup or redemption period, they allow you to have more freedom to be able to make decisions on a whim. Keeping full control over your coins.
Putting it very simply, when staking on KuCoin, you are locking up your coins for a certain period of time, contributing to the ongoing security of the chain and also helping to validate transactions. Rewards from the successfully validated transactions are paid out to you as interest. If at some point you want to withdraw or sell your coins. There is often a redemption period that you must wait to finish until your coins can become unlocked. For Cardano the redemption period is only 1 day, but for Polkadot it is 28 days.
Another added perk when you stake on KuCoin is that not only do you earn staking interest on your coins, but you also receive POL token rewards as well. Essentially you’re receiving two rewards at the same time.
These are a limited-time campaign or special offer to receive interest on your coins. Think of it as being similar to earning interest on your savings, but these limited time promotions won’t last forever. Usually promotions are offered for newer coins and have larger than normal interest rewards that are given out in order to increase interest in those coins. The current KuCoin promotion rates range from 24.25% all the way up to 100.25%; much better than you would normally ever see for regular staking.
The coin that I have been staking the most is Ethereum. Being able to earn interest passively by staking the 2nd largest coin in-terms of market cap is a chance you simply can’t pass up. Because of that, how well KuCoin does ETH staking is vitally important to me.
Staking Ethereum 2.0 is a little more tricky than your average coin, because your ETH2 coins and staking rewards are locked into the protocol until after both ETH and ETH2 merge into one blockchain. The problem with this is that no-one knows for sure when this will happen, and there is no guarantee it ever will. It requires a lot of confidence to give up liquidity of your coins by locking them up for an undefined length of time.
With the exchanges that I’ve used to stake ETH2, the above situation has been exactly my experience. My coins were locked up and I couldn’t sell or withdraw even if I wanted to.
Thankfully KuCoin has a solution for this. The exchange provides liquidity and supports the trading pair of ETH2/ETH on their spot exchange. Even though it does currently trade at a slight discount. The amount of peace-of-mind this feature provides is worth that small discount in my opinion. I don’t plan on selling my ETH2, but it’s nice to know that I could if I really needed to.
Comparing ETH2 staking on KuCoin to Coinbase shows a big difference between the two services. The current rate that you receive on Coinbase is 4.50%, while having no liquidity. While the rate on KuCoin is 5.07% + 0.60 POL rewards; combined equaling 5.67%. Then also having the ability to keep liquidity; makes the decision of which place to use to stake your Ethereum an extremely easy one.
Polkadot is another blockchain that I heavily accumulated and am actively staking it. I’m very happy to see that KuCoin is a big supporter of the Polkadot ecosystem; another positive thing that KuCoin is doing. They do offer DOT staking, which is great; but an even more exciting thing in my opinion is their adoption of Polkadot Parachains.
If you are you new to Polkadot, you need to know that it consists of 3 main parts. The Relay Chain, Parachain and Bridge. The Parachain is connected to the Polkadot Relay Chain through “slots” to enjoy the security of the Polkadot network, achieving interoperability with other Parachains. There are a limited amount of slots that must be bid on and won by locking up Polkadot. The lockup period for that DOT is 96 weeks. After the 96 weeks pass your DOT will be returned to you.
Users who bid on the winning project will receive tokens of that winning project. It’s a great way to make your Polkadot work for you and also to get into projects very early that have great potential. If your project wins, as said before, you will receive that winning Parachain’s token.
If you bid on a project that doesn’t win the auction, then the DOT will be returned to you at the conclusion of the auction.
With Polkadot there are many ways to make your DOT work for you and earn you a passive income. By staking or participating in the Parachain auctions. Both of which you are unable to currently do on several exchanges, such as Coinbase. Another positive thing that KuCoin has going for it.
I will be the first to admit that I was about as far away from being a trader as a person can possibly be. Even though trading presents some of the greatest possible returns in the market. Instead, in the past I have usually been more of the buy and hold for the long-term type of user. Part of the reason for that is that I always have thought trading was too intimidating. Feeling that I didn’t have the technical knowledge that is required in order to be successful and might lose my money. And then there is the time requirement to take into consideration. To be a successful trader you needed to be glued to the computer ready to take advantage of possible trades at all hours of the day. That isn’t even mentioning the emotional control you must maintain in order to buy and sell at certain levels.
Thankfully there is a solution out there for people like me, and it might just convince me to enter the trading market to earn a passive income. This solution that I mentioned is being offered by KuCoin, which has implemented an extremely useful tool with their automated Trading Bots.
If you are new to trading bots and don’t know what they are. Simply put, it is software that is constantly watching the markets. When the software sees a trade opportunity, it will automatically open the trade. Because it is software, it doesn’t have the limitations that humans normally have when it comes to trading. They can buy and sell at incredible speeds taking advantage of volatile price movements, and also find you the best prices. Since it is software, it strictly follows the parameters that have been set and takes all of the human emotion out of it. Which is a great thing, because usually we are the ones that get in the way of our own success.
KuCoin trading bots have several benefits for cryptocurrency traders. Including convenience, efficiency, powerful strategies and also removing the human element. The part that is my favorite is that anyone can use it, regardless of your experience level and it is free. Which means it would be perfect for me.
You’re only responsible for paying for each crypto transaction and the small trading fee that comes along with it. Not only does KuCoin offer a trading bot for free to help make you a profitable trader, but they actually offer several variations of this product, each one being customized and implementing a different strategy depending on what you’re looking for. Which is perfect, because everyone is different and has their own goals or preferences.
Kucoin currently offers 5 different trading bot options. And the parameters can be customized even further to your own liking.
1) Spot Grid -
The Spot Grid bot is a trading strategy that places spot orders when the prices go up, and also go down; taking advantage of price volatility. It works incredibly well during times of price ranged volatility like we had been experiencing the last few months.
2) Futures Grid -
A trading strategy that allows you to long or short the market. Just like with regular margin trading, there is a possible risk of liquidation.
3) Smart Rebalance -
A trading strategy that’s main goal is to increase the total amount of assets by selling high and buying low. All-the-while keeping your coin allocation percentage in your portfolio unchanged.
4) DCA (Dollar-Cost Averaging) -
Time in the market is often more important than actually perfectly timing the market. That is the whole strategy behind dollar-cost-averaging. Which is essentially buying fixed amounts of crypto at set intervals of time. This allows you to catch a nice average of the volatility of your crypto and letting the KuCoin DCA bot do all of the work for you.
5) Infinity Grid -
The infinity grid is an derivative strategy of the spot grid, designed to avoid "missing out" from the crypto pumping. Best used during times of upwards price movement as the bot will only sell during times of profit.
One of the most important things that will help you be successful in crypto is always having an open-mind when it comes to new opportunities. Which is exactly why I wanted to learn more about KuCoin’s trading bots, even though I didn’t have much trading experience. I came away impressed and felt that I could definitely jump in and do it myself.
If you’re interested in learning more about these trading bots and have any questions. KuCoin has a really great FAQ page that might help you out. HERE
How about you? Which KuCoin passive income offering are you the most excited to try? How do you earn a passive crypto income?
As always, thank you for reading!