Deposit
Cryptocurrency also has deposits, just like with banks, only exchanges manage everything here, Anastasia Tarasova, head of mutual fund Maerli Capital, an independent financial advisor, told socialbites.ca.
“Banks take customer deposits, give them as loans and earn on the exchange rate difference. By analogy, crypto exchanges take cryptocurrency as a percentage and reinvest in margin trading, for example.”
According to the cryptanalyst, the volatility of deposits in cryptocurrency is higher both in terms of placement and maturity (floating or fixed rate, regular interest or at maturity).
“Deposits on large exchanges can be called relatively reliable, since there is very little hacking and “fraud” (turning a project into a scam, in which customers can run out of money – socialbites.ca),” Tarasova said.
The expert warned that there are risks of losing money only if the stock market is hacked or the asset price drops sharply.
BitRiver Director of External Affairs Andrey Loboda told socialbites.ca that there is a 35% annual deposit for a period of 15 days in the SOL cryptocurrency on the Binance exchange, as well as a floating rate offer. The rate is periodically reviewed and depends on the market situation – “socialbites.ca”) 20% for a deposit in AXS.
On average, a fixed rate is 2-5%, variable – from 2%. According to Tarasova, passive income through deposits can reach up to 50% per year in rare cases.
Landing
Landing is the provision of interest and collateralized virtual currency to other market participants.
“The method is suitable if you want a higher income from the deposit and you have a cryptocurrency that you need to store for the long term. Descent is bonds’ second cousin,” explained Tarasova of Maerli Capital.
Cryptocurrency is issued with a guarantee that if something goes wrong, the amount will be refunded with interest. The exchange acts as a guarantor, and the landing is carried out through it.
Tarasova explained that major exchanges such as Binance are practicing landings through flat rate deposits. According to him, you can earn 5% per year on a landing page and the risks are similar to deposit risks.
Don’t be tempted by the high percentages of certain projects, Chen Limin, CFO and Head of Trading Operations at ICB Fund, told socialbites.ca.
“You should only trust people who have had a high reputation over the years, have gone through countless audits, and are less likely to fall victim to hackers,” he assured.
don’t stretch
Staking is really a passive story: there are tokens for its existence, from which the owner earns income from them.
“The more money you have, the higher your income will be. You place and store coins in a cryptocurrency wallet for a long time and you get rewards for that,” explained Tarasova from Maerli Capital.
According to the analyst, placing a bet is similar to depositing money in a bank, as in both cases the owner receives interest on the initial investment. However, the wagering returns come from the fact that the user helps the system keep working.
Stake can be used in cryptocurrencies such as Tether, USDC, Solana, Cardano, DASH and Tron. By staking, you can earn between 5% and 70% per year.
BitRiver’s Andrey Loboda estimated the profitability of staking at 5-6%. He said it’s the first place to look, as Ethereum has completed an upgrade in September that will enable staking revenue.
“Tokens or tokens are not the most stable in terms of exchange rate. You may be making income, but it’s falling in hard currencies,” Tarasova warned. According to him, this also happened with the popular Solana currency.
The analyst added that to reduce risks when staking, it is necessary to diversify investments and never invest all funds in a single cryptocurrency, and also choose tokens with low volatility, that is, slow but continuous growth.
It’s important to understand that staking is not possible for cryptocurrencies that are “mined” by mining, such as Bitcoin, said Chen Limin of the ICB Fund.
According to him, popular cryptocurrencies for staking in addition to Ethereum 2.0 are Avalanche, BNB Chain and Polkadot.
airdrop
Tarasova of Maerli Capital said that the term Airdrop is often used in the crypto market when a new coin or token is released, and developers distribute them for free as a promotional stunt.
He added that during such promotions, there are many buyers, but each receives quite a few coins, with a maximum of $20-30.
“Main Airdrop earnings can happen if a coin or coin “hits” at launch and its prices rise sharply and you have time to sell,” the expert said.
The analyst admitted that in this case you can earn hundreds of thousands of percent at once, but you never know in advance which token will “shoot”.
Also, Tarasova advised to pay special attention to Airdrop promotions, as they involve a lot of Internet scams.
According to Andrey Loboda of BitRiver, the main advantage of Airdrop is that it is easy to join. “Often it is enough to pass the verification, subscribe to the newsletter and subscribe to the social networks of the project,” the expert said.
He also advised to carefully study the terms of the act. “You should know that new coins are given for free. If there is a financial reason, this is not an Airdrop, ”said the expert.
Chen Limin of the ICB Fund stated that Airdrop cannot truly be considered a passive way of monetization because it will require some, if not complicated, actions from the cryptocurrency owner. He also noticed that many projects in the market are starting to give up on such practices during the crypto winter.
Fork
At the heart of any cryptocurrency is a blockchain or a blockchain. When a fork is made, a new coin with a similar name is created, but running according to the new rules and on a new blockchain.
According to Tarasova of Maerli Capital, after a hard fork is announced, the price of a coin will mostly increase and everyone will try to get as many coins as possible to get the same number of new coins.
“The more they buy, the faster and higher the price. All this is reminiscent of the dividends in stocks and the behavior of the price when it is announced and on the eve of the closing of the registry, ”he explained.
The amount of gain in the forks is uncertain. It all depends on the coin and the fork itself. Those who keep this or that money in a crypto wallet constantly and for a long time are more likely to win.
According to Tarasova, you can not only buy tokens on the eve of the hard fork, but also buy and sell them at a higher price on the eve of the hard fork.
BitRiver’s Andrey Loboda talked about the Ethereum hard fork back in 2016, when Ethereum Classic, ETC, was created from ETH.
“Actually, getting new tokens is free and it can be useful. However, in this case, it is difficult to calculate the amount of earnings,” he said.
Chen Limin of ICB Fund felt that this option has not been as common as other passive income options in the crypto market in recent years.