Crypto rewards allow you to grow the digital assets you own. There are many different ways to earn rewards, from staking to lending.
Ways to Earn Crypto Rewards
As the crypto economy grows and evolves, there are more choices than ever to earn rewards for holding crypto, learning about crypto, or interacting with decentralized finance (or DeFi) applications. How to earn crypto rewards? We have compiled the most popular ways to win an award based on the question.
1. Stake Some of Your Cryptocurrencies
Many cryptocurrencies now use a “Proof of Stake” consensus mechanism. This is one way their decentralized network can ensure that all transactions are verified and secured without a bank or payment processor in the middle.
With such cryptocurrencies, you can “lock” some of your assets to a staking pool for a certain period of time, earning rewards simply for contributing to the security of the network. In return, you earn rewards. This is an excellent option if you plan to hold the cryptocurrency for a longer period of time. So in other words, instead of having it idle, you can make it work for you.
2. Convert Your Dollars to Stablecoin
Although it’s a common avenue when it comes to crypto rewards, a potential downside to staking rewards is that they are paid in native cryptocurrency, which can be volatile. However, you can also earn rewards by buying and holding dollar-pegged stablecoins such as Dai and USD Coin (USDC).
3. Lend Some Cryptocurrencies With CeFi
Keeping the dollar in a traditional savings account and generating meaningful returns can sometimes be difficult. But stablecoins made a very similar proposition possible. A growing number of central finance (or CeFi) products have emerged that offer attractive returns to keep some of your crypto assets in stablecoin form.
4. Lending Part of Your Assets with DeFi Apps
If you are happy with the higher potential risks for higher returns, you can try lending some of your cryptocurrency through DeFi apps. (DeFi remains an emerging technology, so if you decide to try these protocols, make sure you don’t invest more than you can afford to lose.)
DeFi can enable transparent, peer-to-peer lending for potentially higher returns than traditional financial offerings. Investors supplying cryptocurrencies to DeFi lending protocols receive rewards for lending to borrowers. Of course you need a crypto wallet compatible with DeFi apps for this.
