As the blockchain revolution continues gaining momentum, more people are investing in cryptocurrencies. While some people view this as a long-term investment opportunity, others see it as a way to make money quickly. Regardless of your reason for investing in cryptocurrencies, you can generate rewards on your cryptocurrency investment by holding your tokens, staking your coins, and yield-farming.
Holding Tokens
Try holding tokens if you’re looking for another way to earn rewards on your cryptocurrency investment. While the Ethereum or Bitcoin price is the primary determining factor for investors, new tokens without large followings will offer benefits to new investors who participate with the token.
Cryptocurrency exchanges and other blockchain projects are beginning to offer incentives for users who hold their tokens. These rewards can include fee discounts on the exchange, token airdrops, and opportunities to join exclusive crypto communities. Airdrops are free distributions of tokens; in the case of FTT, token holders will receive regular airdrops of SRM that they can use on the new Serum DEX. Traders can also receive discounts on fees associated with the token exchange. FTT holders would receive discounts on trading across the FTX platform whether you’re buying crypto, transacting with other traders, or participating in the NFT marketplace. As an FTT holder, you can also access the FTX DAO, a community of stakeholders governed by lines of code rather than individuals. Joining a DAO offers stakeholders more significant control over their investments by allowing them to influence the token’s future and the community.
Staking Crypto
Staking your cryptocurrency is like depositing money in a savings account that earns interest. It’s a way to earn rewards on your cryptocurrency investment and can provide steady returns over time. The only difference is that you don’t need to go to the bank or wait for the mailman every month—just leave it running, generating tokens automatically! Staking is possible through a proof-of-stake blockchain model, which allows coin holders to act as nodes on the network and be randomly selected to verify blocks of transactions within the network. The more coins staked with a specific node, the more likely that node will be chosen to verify blocks in the future. Staking can generate serious returns on your investment, but be sure you stake with a reliable node manager. If your node operator is unreliable and does not verify their block within the allotted time, everyone’s coins in the pool will be used as collateral. Successful crypto staking could return rewards up to 10% or 20%.
Yield Farming Crypto
Yield or liquidity farming is another way to generate rewards on your crypto investment. Using a smart contract, liquidity farming allows traders to lock their coins into a liquidity pool. During this time, their coins are lent out to borrowers on the blockchain network in return for rewards from fees or interest. As with traditional lending, there is always a risk involved for investors. You can check the health of a liquidity pool by checking the total value locked (TVL) into the pool. The higher the TVL, the more likely successful farming will occur.
The cryptocurrency market is still in its infancy, and there’s plenty of room for growth. You can make money on your cryptocurrency investment by choosing suitable options, but first, you need to know how to generate rewards on your investments. You can learn more about staking and liquidity farming by joining an online crypto community like FTX.
