Deposit
Cryptocurrency deposits operate similarly to bank deposits, but exchanges handle the process. An independent financial advisor notes that exchanges collect crypto as a fee and reinvest it, sometimes through margin trading, rather than holding customer funds like a traditional bank would.
Volatility is a hallmark of crypto deposits, affecting both how funds are placed and how long they stay there. Rates can be floating or fixed, with interest paid regularly or at maturity depending on the product.
On larger exchanges, deposits are often viewed as relatively stable because incidents of hacking and fraud are less common than in earlier years. Still, the risk to capital exists if a major security breach occurs or if the price of the underlying asset drops sharply.
Industry practitioners note that certain deposits offered on major platforms like SOL on Binance can reach very high annualized rates for short terms, with variable quotes tied to market conditions. Fixed-rate offerings typically sit in a lower range, while variable rates start from modest levels. Passive income from deposits can, in rare cases, reach substantial annual percentages.
Landing
Landing involves providing interest-bearing, collateralized cryptocurrency to other market participants through a trusted intermediary. The approach is attractive to those who want higher yields from holdings meant for the long term. It is often described as a cousin to traditional debt instruments because it involves lenders earning interest while supporting liquidity in the market.
Prominent exchanges employ landing strategies using fixed-rate deposits. Investors can earn a few percent per year, though the risks align closely with standard deposit risks. Caution is advised when considering exceptionally high yields on certain projects, and it is wise to rely on entities with long-standing reputations and rigorous auditing, as well as robust security measures against hacks. This perspective comes from seasoned industry voices who emphasize due diligence and security over quick gains (Tarasova, Maerli Capital; Limin, ICB Fund).
Don’t stretch
Staking represents another form of passive income. Token holders can earn rewards by staking their assets, a process that supports network operations. The general rule is simple: more capital can translate into higher earnings, provided the assets are kept in a secure wallet for an extended period.
Staking resembles a bank deposit where earnings accrue on the initial investment, but the source of returns comes from participating in the network’s operations. Returns vary widely and depend on the token and the specific staking mechanism. Typical ranges span from modest gains to significantly higher annual percentages, depending on the network and demand for staking power.
Some networks have recently completed upgrades that broaden staking opportunities, increasing potential revenue for participants. However, token prices can be volatile, and earnings may fluctuate in fiat terms. Diversification remains a key strategy to mitigate risk, along with selecting assets known for stability and sustainable growth. It is also worth noting that staking is not available for all coins, especially those that are mined through proof-of-work. Popular staking options include networks that provide staking incentives beyond Ethereum 2.0, such as Avalanche, BNB Chain, and Polkadot (Limin, ICB Fund; Loboda, BitRiver; Tarasova, Maerli Capital).
Airdrop
The term airdrop is widely used to describe promotional releases of new coins or tokens distributed for free. During such campaigns, demand can surge and recipients may receive a small allotment each, sometimes capped at modest amounts. Profit opportunities arise if the coin gains traction at launch and investors manage to sell at higher prices, though predicting which token will perform is uncertain.
Promoters warn of scams associated with airdrops and advise diligence and skepticism. Participation often requires basic verification and engagement with project channels, but terms should be reviewed carefully, as not every free token qualifies as a legitimate airdrop. Experts stress that some projects may discontinue airdrop practices during downturns in the crypto market (Loboda, BitRiver; Limin, ICB Fund; Tarasova, Maerli Capital).
Fork
A fork creates a new coin by changing the rules of an existing blockchain. Following a hard fork, additional coins may appear, driven by demand as investors seek to acquire new tokens and expand holdings. Price movements often spike as people anticipate future allocations, resembling dividend-like behavior around fork announcements and registry closings.
The ultimate gains from forks are uncertain and depend on which fork is executed and how the market reacts. Long-term holders who maintain funds in wallets during the fork period often stand a better chance of benefiting. It is possible to buy tokens ahead of a fork and sell at elevated prices just before the fork event, though outcomes vary. Historical examples, such as Ethereum’s fork resulting in Ethereum Classic, illustrate how forks can introduce valuable tokens but also unpredictability in earnings (Loboda, BitRiver; Tarasova, Maerli Capital; Limin, ICB Fund).