How to Earn Passive Income with Crypto

Lucky for me, I held onto a majority of the crypto I purchased in 2017. As crypto has become more popular, more platforms to accommodate crypto have been developed as well. It’s pretty amazing what’s out there right now and you know it’s only going to get better in terms of earning passive income through cryptocurrency. Through staking and crypto products, I’m able to make my coins earn more coins. Here’s some of the products and coins I use to earn crypto from my holdings.

Staking

Staking is the process of locking your coins to help validate transactions and earn rewards by doing so.

There are various coins out there that allow you to stake your coins, but the ones I hold are Algorand and Ethereum.

• Algorand (Staking on official wallet @ 5.75% APR, compounds daily, no lock) — I was made known of this coin when it came up in Coinbase. At the time it had the highest APR (6%) of the available coins that earned any rewards. However, after doing some research on the coin, I realized that you can earn a higher APR by staking on their wallet (around 7.5% at the time). One of the easiest coins to stake and it can compound daily. Coinbase takes a cut so I moved what I had to a wallet I created. Currently the APR is about 5.75% through the official wallet and 4% on Coinbase and this will continue to decrease as more users stake their coins and the foundation moves towards a governance model where you have to lock the coins for 3 months and use them to vote to earn rewards. Regardless, I’ll continue to hold onto the majority of my Algo to not only earn interest but because I truly believe in the tech and team that is behind the cryptocurrency. Some alternatives are Cardano (ADA) or Solana (SOL). Recently, a new DeFi app called Yiedly which has a no-loss lottery that you can add some Algo to and will put in line to earn more Algo through the lottery and at the same time earn their YLDY coin.
• Ethereum (Staking on Coinbase @ 5% APR, doesn’t compound, stays locked) — one of the first cryptocurrencies I bought in 2017. At that time I thought Bitcoin was too expensive (silly me) and was more fascinated at the smart contract ability Ethereum offered. It made total sense to me that a digital asset can be used to create coins and apps. I found the potential to be limitless. Fast forward to this year and crypto has been hitting new records, ETH specifically has been breaking multiple all time highs due to what I believe is its functionality. Thousands of apps and coins are built on the Ethereum network and the team have been making progress on upgrading the network to use Proof-of-Stake system instead of its current Proof-of-Work system. As a result, ETH2 can now be staked and earn rewards. You need to have 32 ETH in order to create your own validator node to earn around 7% APR but I didn’t have enough and also it would’ve been too much work and management for me. I could’ve joined a pool but became more risk averse after reading about people losing their coins in them. So the next best thing was to wait on Coinbase’s waitlist to stake with them. I felt safer with Coinbase than some random pool I find on the internet. Once I was off the waitlist, I moved my coins from my ledger and converted them to ETH2 on Coinbase. I was earning 6% APR when I first started staking, but currently the rate on Coinbase has been dropped to 5%. Similar to Algorand, as more coins are staked, the lower the APR will be. Here’s a referral link to Coinbase, if you’d like to do the same. One thing to note is that once you stake your ETH2 it will stay locked until the upgrade is complete.
• Cosmos (Staking on Coinbase @ 5% APR, compounds weekly) — One of the first coins that had staking on Coinbase and the first staking crypto I purchased. The tech behind the coin allowed different cryptocurrencies to communicate with each other and I found it to be a cool idea.

Lending Platforms

Leverage your coins to get a cash loan and/or earn APR by holding your coins in their wallet. There are products such as Celcius, BlockFi, and Nexo that allow you to earn interest on multiple types of coins. I’m sure you’re thinking “not your wallet, not your coins”; but you know what, scared money don’t make money and these seem to be pretty reputable companies. Also, the amount that I’ve put into these third-party wallets aren’t as big as what I’m staking with so it won’t be too damaging if things do go wrong. With that said, here’s how I’m earning interest with my crypto with these platforms.

• Celcius (Earning 6.2% with Bitcoin, 5.05% with Ethereum)—They have a good amount of coins that offer APR, but my biggest attraction to them was their APR rates on Bitcoin and Ethereum. Celcius has the highest on both out of the three platforms listed. In fact, I’ve been starting to move any ETH I’ve recently purchased over to Celcius instead of Coinbase because of the tiny increase in APR and the fact that the coins don’t get locked in and I can access it if I needed to. If you can help me out, here’s my referral code for Celcius: 162216070d.
• BlockFi (Used to earn 5.5% with Litecoin, moved coins to Nexo) — I originally used BlockFi to earn interest with my Litecoin as they had the highest percentage (5.5%), but as of July 2, 2021 the rates have dropped down to 4.5% and is tiered off after having 100 coins, so it just wasn’t worth it at that point.
• Nexo (Earning 5% with Litecoin) — Out of all the three, Nexo had the best user interface and offered pretty high rates for dollar based coins such as USDC (up to 12%). Litecoin is something I’m trying to slowly sell off, but figured I can have it earn some interest while I wait for the price to get higher and Nexo offered the best rates.

As always, this isn’t financial advice and you should do your own research. I just wanted to share what I’m currently using and hopefully inform anyone wanting to earn some passive income.

Edit: Here’s a recent update on rates from available CeFi providers.