Investors who have been in the cryptocurrency game long enough to survive the bearish environment may view a stagnant market as an opportunity to buy something at a discount. However, if you’re new to the game, the idea of buying more of something you’ve already lost may seem like a rush into the fire with everyone running for the hills. The CEO of a Blockchain investment firm shares his 3 best passive ways to earn crypto with little capital.
The first way to earn passive income: Physical devices
Jake Brukhman, founder and CEO of CoinFund, one of the first investment companies focused entirely on Blockchain, says you can earn crypto without constantly trading. This can be done by finding various ways to join networks in exchange for returns or rewards.
Jake Brukhman says the first option to consider is physical devices that allow users to earn rewards in the form of tokens. New networks that create a service or collect data often launch small hardware tools that look like an internet router. Many of these products can be purchased for well under $1,000.
One device that Jake Brukhman mentions is a Helium miner, a hotspot that provides wireless network coverage for surrounding areas. This little box retails for between $400 and $800, depending on the provider. Rewards are earned in the blockchain’s native token HNT and can vary widely depending on where the device is placed and the strength of its antenna.
Eric Vladimirsky, a senior software developer based in Los Angeles, started mining Helium with two miners and then quickly grew to 63. He earned 1,386 HNT over a 30-day period in July 2021. Today, the rewards have been significantly reduced, but the price of HNT has increased from $12.88 during its mining to $16.33 as of May 4.
A similar device is PlanetWatch, a small box that monitors air quality and sells that data to weather companies. It rewards its holder with PLANETS tokens. The miner retails for around $600 and requires a $270 annual license.
Jake Brukhman is also excited about Dimo, a user-owned IoT platform that allows drivers to collect and share vehicle data in exchange for rewards. The tiny device retails for around $345 and is placed on the vehicle’s dashboard.
The second way of passive income with cryptocurrencies: Staking
If you’re not a fan of hardware, betting is a second option. Investors participating in this process support a Blockchain by verifying transactions and blocks within the network. Jake Brukhman says that users lock some of their tokens and get a return on that token in return. Staking times vary for each platform.
Knowing which staking protocols to use can be daunting. Jake Brukhman proposes filtering options through a website called Blockdaemon, an independent Blockchain infrastructure platform that supports these protocols. Dan Reecer of Acala, a platform that is soon launching various DeFi applications including yield farming, recommends checking out staking platforms at BlockFi, Polkadot, and Kusama.
The third way to passive income with cryptocurrency: Yield farming
The third option is yield farming, a process that involves users depositing their crypto into a DeFi platform. Jake Brukhamn says that joining such platforms often means adding liquidity or decentralized exchange protocols or lending protocols. He recommends checking out a website called APY.Vision, which lists the varying returns opportunities between different products.
This approach is high-risk compared to staking, as users rely on a protocol rather than the fixed consensus of a blockchain. This means that if the project fails or gets hacked, you could lose your money. On the other hand, the rewards can be significantly higher than the simple bet.
“There’s definitely risk,” says Sonali Giovino, head of communications at DeFiYield, an asset management platform that allows users to connect their wallets to a variety of crypto protocols, including yield farming.
As you can closely watch on Kriptokoin.com news, projects can fail or be hacked, and users may experience a ‘rug pull’ when the creators of a project reduce the value of the project by withdrawing large sums of funds. Sonali Giovino adds that the smart contract may contain loopholes in the protocol that would allow security vulnerabilities.
DeFiYield’s dash alerts users when any of the protocols connected to their wallets show any red flags or signs of vulnerability in the smart contract. Sonali Giovino’s advice to investors: Only put in what you can afford to lose.
Dan Reecer recommends doing some internet research and offers the following advice: Look at the team. Make sure they are not anonymous and have been involved in other successful projects in the tech industry if not in crypto in the past. Investigate if others are doing any control over the network. And if the yields are too good to be true, they probably are. Dan Reecer considers reasonable for yield farming include Aave (AAVE), Compound (COMP), Uniswap (UNI), Curve (CURVE), Trader Joe’s (JOE), Astroport, Saber (SBR), and Raydium (RAY). ‘
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