Cryptocurrencies have shaken the blockchain ecosystem. While some investors are doubtful about it, the venture is here to stay. Millions of traders have found it profitable because you can trade or earn dividends by owning cryptocurrencies.
So, what are crypto dividends, and how can you earn them?
Crypto dividends refer to the profits you receive from owning digital assets. It is like traditional bonuses shareholders earn for being part of a particular enterprise.
You can receive crypto dividends by investing in different cryptocurrencies. Investors earn these shares from transaction fees deducted from crypto exchanges.
There are many ways you can earn dividends as a crypto investor. Below are some:
- Stake tokens
Mining Bitcoin and other cryptocurrencies are the surest way of ensuring liquidity. The process is tedious, and not everyone can perform the complex tasks involved in generating more cryptos.
Since mining is almost unsustainable, the most reliable alternative is having proof of stake to generate tokens and confirm transactions. This process is known as staking and can earn you dividends.
How does staking work? Staking means lending your coins to the necessary network. Thus, making it easier to validate exchanges. The network will reward you for lending your coins. Note that you can only stake what you own at any given time. And, the more you stake, the higher the dividends.
Some of the coins you can stake and earn shares from include:
- NEO –you will receive 0.0003 gas tokens daily.
- VeChain –you will receive 0.00042 VTHOR tokens daily.
- Invest in a crypto-interest exchange
Investing in cryptocurrencies itself earns you profits. But depositing the tokens in an interest-earning account guarantees higher yields.
Several platforms allow you to deposit digital assets and earn interest depending on the amount you invest. You can also earn compound interest after a specific appreciation period. The most reassuring thing about this option is that you will still earn profits regardless of market fluctuations.
This option is the easiest because you are sure to earn from a token you invest in. The idea is to buy and hold tokens from the dividend-paying currency. But not all digital tokens pay dividends –research and find the ones with such arrangements.
Mostly, exchanges reward investors for holding their tokens on the medium. Such platforms include Cosmos and Neo.
Some tokens like BIX (Bibox) and KuCoin token (KCS) offer discounts to investors, allowing them to earn profit. But how? You will receive dividends from a portion of the transaction fees charged. For instance, traders who exchange kick token to eth will incur a transaction percentage. So, you can earn dividends by holding your currencies on a platform that awards its users for holding their coins on the exchange site.
The interesting bit about this option is that you don’t have to doubt earning as the tokens are consistent. The best way to earn using this approach is to own more tokens by buying them and hodl on the exchange site.
Cryptocurrencies that pay dividends include:
- BitMax: If you invest in BitMax tokens, you will earn high dividends. 80% of its transaction fees is converted to dividends. You can earn 35%-50% annually for investing with BitMax.
- KuCoin (KCS): 50% of the transaction fees are distributed to KuCoin’s investors. You must own at least 6 KuCoin tokens on the platform for you to earn.
Crypto dividends are one of the hassle-free ways to earn from investing in cryptocurrencies. However, it would help if you chose an option that guarantees maximum returns. Also, choose a coin that has favorable dividends-earning terms.