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8 Ways to Earn Passive Income with Cryptocurrency

Find out how to earn passive income with cryptocurrency and make your crypto work for you.

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Passive income usually covers income streams where an individual doesn’t actively participate. In the case of earning passive crypto income, all you typically need to do is invest your digital assets in a specific crypto investment platform or strategy. This way, you’ll be able to set up a new stream of passive income where you won’t need to put in too much ongoing effort while enjoying a steady stream of income.

In this article, we’ve also included ways to earn cryptocurrency online that require little to no investment on your part as well. While these are usually one-off rewards or giveaways and may require more effort on your part to meet the requirements, they are great options to start earning crypto and to test the waters.

In this article, we’ve also included ways to earn cryptocurrency online that require little to no investment on your part as well. While these are usually one-off rewards or giveaways and may require more effort on your part to meet the requirements, they are great options to start earning crypto and to test the waters.

We’ll be covering the following 8 ways to earn passive income with cryptocurrency:

1. Crypto Interest Accounts

2. Earn Crypto by Staking

3. Lending Platforms

4. Mining

5. Liquidity Pools

6. Airdrops

7. Hard Forks

8. Affiliates and Referrals

Summary of passive income strategies crypto
Table: Summary of crypto passive income strategies

1. Crypto Interest Accounts

You can earn passive income by holding your cryptocurrency in a crypto savings account. These accounts are similar to regular savings accounts. This is a sustainable and low-risk method to earn passive income in crypto since crypto interest accounts offer fixed interest on your idle crypto assets.

Instead of keeping your digital assets in a wallet,  you can put them to work by depositing them in interest-bearing accounts. Based on your needs, you can choose between different interest rates. These can range from flexible savings plans, where you can withdraw your assets whenever you want, to fixed savings plans, where you deposit your assets for a set amount of time. Generally, interest rates are higher for fixed savings accounts.

2. Earn Crypto by Staking

Staking involves keeping your digital assets in a specific wallet. You can earn staking rewards by performing different network-related functions, i.e. validating the transactions.

The term ‘Stake’ refers to holding the crypto, which incentivises the user to help maintain the security of a network via ownership. For this purpose, staking networks rely on Proof-of-Stake (PoS), a consensus algorithm. There are different types of PoS, including Leased Proof of Stake and Delegated Proof of Stake.

Generally, staking requires creating a staking wallet and holding a specific number of crypto assets in it. This process also includes delegating or adding funds to a larger platform known as a staking pool. It is simple, as you just have to keep your crypto assets with the exchange.

Staking is referred to as the easiest way to earn cryptocurrency. It allows you to increase your crypto assets with little effort. When choosing a platform, select one that is reliable and offers good return rates to ensure you maximise your staking rewards.

3. Lending Platforms

The popularity of crypto lending services is surging with each passing day. Trusted lending platforms offer these services in both the decentralised and centralised segments. Hence, you can earn passive income in the form of interest from lending your digital assets to the borrowers.

Listed below are the four major lending strategies for earning passive income from crypto:

I. Decentralised or DeFi Lending

II. Centralised Lending

III. Peer-to-Peer Lending (P2P)

IV. Margin Lending

I) DeFi Lending

Decentralised Finance lending, commonly referred to as “DeFi Lending” is an entirely automated approach. Through this method of crypto passive earning, you can directly use blockchain for executing lending services.

Unlike other lending options, no intermediaries are associated with decentralised platforms. On the contrary, both the borrowers and lenders rely on self-executing and programmable contracts known as “Smart Contracts”. These contracts finalise the interest rates autonomously and will execute once both conditions are met. If you’re planning to earn passive income through DeFi lending, choosing over-collateralised projects, where borrowers have to put up collateral that’s valued higher than the borrowed sum, adds an extra layer of security.

II) Centralised Lending

This strategy depends on a centralised third-party platform, which offers its independent lending infrastructure. To earn passive income through centralised lending, you’ll need to transfer your digital assets to the lending platform you’ve chosen, so make sure that you’ve chosen one with good platform security.

Centralised lending services offer fixed interest rates to borrowers (the annual percentage rate: APR) and share a portion of the proceeds with the lenders as APY (annual percentage yield). Unlike DeFi lending, borrowers and lenders will have to pass KYC processes to ensure compliance with financial regulations. 

III) Peer-to-Peer Lending (P2P)

Platforms like these allow users to define their individual terms and conditions. For instance, by using one of these peer-to-peer lending platforms, you can set the interest rate and the amount you want to lend.
P2P serves as a bridge between borrowers and lenders, where these platforms ensure a specific level of control. Just like centralised lending services, you must hand over your cryptocurrency to these platforms.

IV) Margin Lending

Margin lending is another way to earn crypto interest passively. With this lending strategy, you offer to lend your crypto assets to traders. Using borrowed cryptocurrencies, these traders can strengthen their trading position with added liquidity without selling their assets.

This is an easy way to earn passive income with cryptocurrency, as most of the work is done by crypto exchanges. You just need to ensure the availability of your digital assets on your chosen platform. 

4. Mining

Mining is the oldest way to earn passive income with crypto. This process allows you to receive a reward for securing a network using computing power. You don’t need to hold crypto to earn passive mining income. 

Initially, people used to mine Bitcoin on a regular PC or general-purpose mining rigs. However, with the increased hash rate, miners started to use more powerful computers. At present, mining equipment uses ‘Application-Specific Integrated Circuits’ (ASICs) with integrated chips tailor-made for mining.

Setting up and maintaining mining rigs also requires some investment and technical expertise, even more so with the current mining hardware. As a result, mining is becoming a corporate business and is becoming increasingly out of reach for a regular person to use as a source of crypto passive income. 

Nevertheless, there is an alternative to traditional mining — cloud mining. Cloud mining lets you rent the computing power of a specialised mining rig based anywhere globally. It usually requires paying a fixed amount to the third party for handling the technical aspects of mining on top of a daily maintenance fee for managing the mining rigs. However, since you’re renting part of a pool with plenty of computational power, you’ll have a higher chance of generating a winning hash than other miners with less powerful machines.

5. Liquidity Pools

This is a sustainable way to earn cryptocurrency online, as liquidity pools serve as a foundation of the DeFi ecosystem, although there are some risks involved. In addition, a wide range of crypto-related services relies on these pools.

Some of these include:

Automated Market Makers (AMMs): Being the key element of the DeFi ecosystem, AMMs allow the automated trading of cryptocurrencies through liquidity pools.

Borrow/Lend Protocols: Borrowers and lenders use these protocols to borrow or lend digital assets in a decentralised manner. This is made possible with the help of smart contracts, allowing individuals to lend their assets anytime.

Yield Farming: It is a crypto investing strategy which involves staking or lending digital assets and getting rewards in the shape of interest or transaction fees.

Synthetic Assets: These are tokenised derivatives, serving as the representation of digital assets that a person can’t buy. However, such a person can take advantage of price fluctuations of that assets through these derivatives or synthetic assets.

On-Chain Insurance: This type of insurance provides cover against the risks associated with the DeFi sector and crypto businesses, i.e. hacking or losses.

Blockchain Gaming: This approach refers to collecting non-fungible tokens (NFTs) stored as digital assets on the blockchain. These include various digital items used in popular video games, i.e. weapons, dresses, collectables, etc.

The idea behind liquidity pools is straightforward. It involves collectively contributing funds into a huge digital pile, where all these assets are secured through a smart contract. These pools facilitate lending, decentralised trading, and various other functions.

The platform’s liquidity providers or users create a market by adding the equal value of two crypto tokens to a pool. As a reward for offering their funds, the liquidity providers can earn passive income in trading fees, which comes from a percentage of a trading fee from the trading activity in a pool.

However, a liquidity provider is also subjected to the risk of impermanent loss, which happens when the value of a crypto asset deposited into a liquidity pool is different from the original value.

6. Airdrops

Airdrops are a great way to try out new altcoins, where fulfilling certain criteria entitles you to receive an airdrop. Airdrops are tied to various blockchain-based projects, where developers offer free tokens to the members of the crypto community to gain the public’s attention.

This is a marketing tactic, and you just need ownership of a specific wallet address to receive an airdrop. Some crypto exchanges also offer regular airdrops to their users.

Usually, airdrops are issued to users after completing a particular task. Some of these tasks include:

  • Holding a specific smart contract wallet
  • Signing up or creating an account for receiving regular updates
  • Re-tweeting or sharing a post
  • Receiving or sending crypto through a particular platform

The basic idea behind airdrops is to distribute newly minted coins or tokens to specific wallet addresses to keep the recipients engaged.

Here are some of the ways to offer airdrops:

  • Asking a user to perform different tasks on social media and receive airdrops.
  • Auto distribution of tokens to holders of a specific digital asset

7. Hard Forks

hard fork is a change in the network protocol that causes a split in the network. As the new update isn’t compatible with the prevailing blockchain protocol, this causes a permanent split, allowing two separate networks to run side by side. Usually, these happen to add functionality, correct security risks, resolve disagreements within a cryptocurrency’s community, or reverse transactions on the blockchain.

As a user who has invested in a blockchain before a hard fork, you will automatically receive the new blockchain’s token, which you can choose to hold or sell.

8. Affiliates and Referrals

Most crypto platforms offer rewards to partners for bringing new clients to their platforms, so if you have a large following on social media, you could earn a substantial amount of passive income through partnering with a platform as an affiliate.


As seen above, there are many different ways to earn passive income with cryptocurrency, and each have different levels of technical knowledge, effort, and risk. Regardless if you're a new or experienced crypto investor, there are simple and straightforward ways to generate a constant stream of passive income through crypto, which is to open a savings account.

This article has been prepared by Cabital Fintech (LT) UAB  (the “Company”) and is general background information about some of the Company’s activities at the date of this presentation.

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