When we talk about finances the Holy Grail is always talked about as being passive income. Income you make for doing next to nothing allowing you to live the lifestyle you want. In traditional finances you're limited unless you are an accredited investor. These limitations put a great deal of stress on many people to being able to build enough passive income to live off of.

However with the introduction of crypto and the massive amount of options it now provides it's never been easier to build a passive income powerhouse. Below I'm going to go over a few highlight options of what I feel are worth it and worth your time.

*This article is for entertainment purposes only and is not financial advice. Understand the risks of each investment and do your own research before investing.

Staking

I won't go heavy into this one as most people now know what staking rewards are. Simply stake your tokens and earn more of that token. Most of the time this is done via running your own node however there are now places that offer running the node for you for a small fee or

Flash Loans

Flash loans are a rather new way to earn passive income with cryptocurrency. However being that it's so new you will need to know how to do some development yourself or know someone that is capable of it.

For example if you use Moonwell which is on top of the Base blockchain it's a lending style platform. Now before I go further this system might already be obsolete so you're going to have to do a fair bit of research more into it yourself.

Moonwell is actully pretty cool as it acts as a lending and a borrowing ecosystem. But it does so in a way that capabilities on two factors. The staking factor of the token plus the borrowing APY.

As a rough example let's have a look at a stablecoin USDC which currently offers a MASSIVE 9.6% APY. It does this by taking the already 5.1% that Coinbase currently offers APY on their stablecoin token and combines it with the 5.7% APY that borrowers have to pay. Combining these two together gives you a total of 10.8% APY meaning they are taking roughly 1.2% APY of the profit. But also if you mouse over each you'll notice that you're not just earning USDC in this case you're also earning from the native token of theirs called wells at 3.9% which is how we show that big jump in APY so you're going to want to watch that part of it.

Now there's some back and forth to look into on that but that's for another article on another day. In this article we are going to focus in on the new flash loans.

The idea of flash loans is to have direct access to the smart contract and understand how it works. In general the theory is at times you can borrow money and boost it towards the APY being paid out for the current contract.

Lending

A good portion of this was covered in the above section. Mainly what it is for example is you take any token such as USDC which has a 5.1% APY on it already and loan it out to someone who is paying a 5.6% APY. This is then combined to give you the person loaning the money a large APY on your funds over simply staking it for rewards. Idk about you but I'd rather earn 9.7% yield instead of 5.1% yield on my money that's going to get me there that much faster when it comes to living off of passive income.

Yield Farming

Yield farming really is just DeFi trading which has taken a bit of a hit in the last few years. While it sounds great on paper a vast majority of people end up losing out. Unless of course you put your funds into rather stable or semi stable tokens and increase in value and are highly swapped and traded which collects fees for the liquidity providers. This one comes with some decent sized risks.

Trading Bots

Trading bots are another way people with development skills are tapping into. It's about creating a bot that either does trades for you or does it. There's also a subsection of this calls arbitrage trading bots. These are bots programmed to pull funds from one exchange and sell them on another if there's a big enough price difference between the two.

Dividend Tokens and NFTs

Some NFTs and other tokens have what are know as dividends. Earnings from off of the base layer that work and act much like a staking token would however it's mainly outside of the core blockchain and is project specific.

A Few helpful notes

At the time of writing this the $HIVE blockchain is offering up a massive 20% APR on staking their algorithmic stablecoin called HBD. On top of this Hive also offers up awesome ways to earn passive through staking and what is know as curation rewards where you vote on other quality content with your stake weighted powered up hive.

On top of this LeoDex.io is another powerful solution which connects hive with layer 1 blockchains like Bitcoin, Ethereum and other big names like Thorchain and even our favorite meme Pepe! This offers up liquidity earnings but also just offers up a powerful solution for the hive blockchain itself.

Posted Using InLeo Alpha