Passive Income Ideas Now That The Market Is Bearish

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If there is anything I love about the crypto space, it is it's dynamic nature. Bitcoin has been spiralling in the wrong direction for weeks and as at 3rd of February 2022, it was sitting at 37k a huge decline from its 65k glory. A lot of people have been skeptical while others have been sad but I believe some have been smiling amidst it all while earning passive income. If you didn't know there are many other ways to earn income in crypto even in this period that doesn't include trading. And although the earnings can't be compared to when the market was all green I believe it is better than watching your assets do nothing. Passive income is money generated from ventures in which an individual is not actively involved and where else to earn promising passive income than on the blockchain. So here are 3 ways to earn passive income on the blockchain in 2022.

Proof of stake(staking). Cryptocurrencies are decentralized and so need a way to verify transactions and proof of stake is one of such. In this system, owners stake their coins therefore gaining the right to check new blocks of transactions and add them to the blockchain. It is an alternative to proof of work on which Bitcoin runs in and more popular as it is more energy efficient when compared to the former. By staking your coins, you receive crypto reward for your contribution to help verify the blockchain. The amount you are rewarded totally depends on your mining power i.e the amount of coins you stake and the blockchain you are helping to validate. Each proof of stake protocol is different in how it chooses validators but anyone staking could be choose as a validator. Examples of cryptocurrencies that use proof of stake are Cardano, Solana, Polkadot and Ethereum 2.0. Usually the higher your mining power the higher your rewards and sometimes the longer you stake the higher your rewards.

Lending. The crypto world has evolved largely and as an investor there are many ways to earn money rather than trading or hodling. You can lend your digital assets to borrowers to trade while earning interest rates from them. Three are many strategies you can opt for depending on how much you are willing to lend and for how long. One of such is lending to traders through a crypto exchange with facilities that do all the work for you. There is also DeFi lending that eliminates the need for intermediary while allowing both parties interact but with a programmable and self-executing contracts which have autonomously and periodically set interest rate. The most interesting of all is Peer-to-Peer lending that allows you to set your rates and terms while matching you to the most suitable borrower.

Yeild farming (Liquidity Provider). This is made possible through DeFi but unlike staking you provide two digital assets . Liquidity providers deposit a certain ratio of usually two digital assets into a liquidity pool and earn a proportional amount of trading fees from the pool. For example in other to provide liquidity to an POSI/USDT pool you have to deposit both POSI and USDT of equal value to the pool to be locked for a period of time. One earns two separate interest rates from a single deposit while doing absolutely nothing. The returns are capculated in terms of Annual Percentage Interest(APY) depending on the pool.

While all these options are great it is important to remember that they are not risk free, hence DYOR.