The cryptocurrency space suffered in 2022 when the global economy collapsed due to supply chain issues, the ongoing conflict in Ukra*ne, and skyrocketing inflation. Many NFT projects have disappeared; we even saw the collapse of the cryptocurrency when the moon collapsed. The moon landing platform, Anchor, also went down when the entire blockchain was destroyed.
However, there are still some ways to make money investing in cryptocurrencies as a long-term investor looking for passive income opportunities. Is there some more decent income from staking your cryptocurrencyand theoretically, you can earn continuous cash flow from your work with NFT royalties.
Key Findings
- You can earn crypto royalties from NFT royalty programs, staking rewards, and lending.
- Investing in cryptocurrency is risky as it is a volatile asset, but long-term investors can benefit from various royalty programs.
- You can earn passive income by lending your tokens to borrowers or by staking your cryptocurrency to verify transactions on the blockchain.
How can you make money with crypto royalties?
In the crypto space, you can earn passive income from lending and staking in crypto. Cryptocurrency lending, as the name suggests, is all about lending your tokens to borrowers at an agreed rate. Cryptocurrency rate is slightly different as it includes renting your tokens on the blockchain to validate transactions.
Because no single centralized bank controls everything or verifies transactions, companies use one of two transaction verification mechanisms on the cryptocurrency blockchain. Any blockchain using a proof-of-stake (PoS) mechanism allows crypto to be staked to validate transactions on the network in exchange for a reward that is usually part of that token.
Since the Ethereum merge has led to the transition to a PoS system, you can stake your Ethereum tokens. You can also bet Cardano, Solana and any other cryptocurrency which uses this mechanism. You cannot bet on bitcoins as they use a proof-of-work mechanism.
In this article, we will look at crypto lending, crypto staking, and NFT royalty programs as earning options as long-term crypto investors.
Crypto Lending Opportunities
In decentralized finance (DeFi), many financial products and services are built on blockchain. DeFi differs from centralized banking in that it is based on peer-to-peer digital exchanges rather than centralized institutions like banks. One of the most popular DeFi services has become crypto lending.
You may have seen advertisements from crypto exchanges that said how much you can earn from crypto lending. You can make money lending in cryptocurrencies by depositing your cryptocurrencies into a lending platform that deploys and lends your cryptocurrencies to borrowers who want to get a cash loan using cryptoassets as collateral. In exchange for lending your cryptocurrency, you earn interest as the money is returned to you.
The amount you earn will depend on the platform, the type of cryptocurrency you provide, and other possible market factors. We encourage you to shop on various exchanges to see the rates offered by different companies.
How to make money staking cryptocurrencies
One of the common ways to make money from cryptocurrencies is staking, which involves transferring your tokens to the blockchain so that it can validate transactions.
How can you bet on cryptocurrencies? Here are the steps you are likely to follow if it interests you:
- You must decide which cryptocurrency you want to invest in. It is very important to find a coin you want to invest in that allows you to bet.
- Find the right platform. You want to find a crypto exchange that offers competitive rates and security.
- Deposit your cryptocurrency and place your bet for the agreed time. When it comes to the verification process, it often makes sense to put your cryptocurrency on an exchange, where the exchange adds your tokens to the validator’s stash. Thus, you receive a part of the reward received from the verification of transactions.
Many people will use an exchange like Binance to stake their chosen cryptocurrency. Interest yields vary depending on market conditions.
There are two different types of staking: locked and DeFi. A staking lock means that you must lock up your cryptocurrency for a period of time, typically 30 to 120 days. As the name suggests, fixed staking means that you cannot access your cryptocurrency for a specified amount of time.
DeFi staking is more related to smart contracts and DeFi projects. If you try DeFi staking through a service like Binance, Binance will not be held responsible for any security issues with smart contracts on the network.
As we saw with what happened with Luna, it is imperative that you only invest money that you can afford to lose when it comes to staking your cryptocurrency.
NFT royalty programs
NFT royalties allow you to earn a percentage of the sale price every time someone buys your NFT project on the marketplace. Smart contracts complete payments and can range from 5% to 10%.
NFT royalties do not require an intermediary. They only need a smart contract executed on the blockchain; everything else is handled automatically.
These NFT programs have attracted many artists and people in the digital authoring industry as they can earn money directly from their work.
So, for example, an artist can sell one piece of digital art or any other creative project once, and then make money on it many times over.
Let’s say a client buys your NFT artwork and decides to sell it for a profit after a few months because it was limited or its value increased for some reason. You will receive a royalty on this sale depending on the terms you have agreed to (between 5 and 10%). Then another six months later, when your reputation as an artist grows or the artwork becomes more valuable again, that person decides to sell. You will again receive royalties as specified in your terms.
Blockchain and smart contracts work hand in hand, so the rightful owner gets paid after the transaction is completed.
These NFT royalty programs benefit both parties because the artist or creator of the original work is rewarded for their efforts, while the buyer can have peace of mind knowing they are buying a genuine version and not a fake.
How can I earn from NFT royalty programs?
While the idea of making money from NFT royalties seems simple, implementing it becomes tricky as you need to create an NFT project that others will want to buy. Many musicians, artists and digital creators are simply turning to NFTs because they already have an established audience that wants to buy something from them.
You must create your NFT project on the marketplace for the public to buy it. The most popular NFT marketplace is OpenSea, which some refer to as “eBay NFT”. There are also Rarible and Mintable.
What you need to know about crypto income
We want to emphasize that you must buy a cryptocurrency coin before you can wager or lend it. This indicates that you are taking on two different risks to generate passive income as you are not just putting money into a savings account.
You should hope that the price of the coin will remain high when it is out of your hands. For example, if you lock up your Solana for 90 days but want to sell it because you notice the price is starting to drop, this is not an option.
What should you consider before investing in crypto royalties?
It is worth recalling that investing in cryptocurrency can be very risky and the market is filled with volatility. We also have to state that regulators in the US have been heavily criticized by these crypto lending platforms. Prior to Luna’s collapse, its own lending platform was offering interest rates that seemed too good to be true. In hindsight, it was true, and the platform collapsed.
You must also remember that your money is not protected by federal insurance. First, you must use fiat currency to buy cryptocurrency. Then you have to borrow it or put it on the platform. You then have to hope that this platform does not become insolvent, causing you to lose your investment. There have been many horror stories of investors losing money when the platform went down. Investors lost tens of thousands of dollars overnight due to crashes.
How should you invest your money?
While there are many unique opportunities to earn passive income in cryptocurrencies, risks are always present.
New markets always come with an additional level of risk How do they find their footing? If you are an investor with a shorter time horizon and lower risk tolerance, investing your money in a safer and more secure investment might be a good choice. You should not invest in cryptocurrencies that you are not prepared to lose.
bottom line
If you want to earn passive income from cryptocurrencies, there are many options worth considering. Crypto lending involves lending your crypto tokens to people who want to use them as collateral for a loan. You can earn interest on this loan. Cryptocurrency staking involves transferring your tokens to the blockchain so they can use them in the verification process. This only applies to cryptocurrencies that use proof of stake. We encourage you to take the time to do more research before you decide which investment to choose.
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