You’ve decided to move your crypto off of Coinbase (or your exchange of choice) and it is now sitting in your crypto wallet. What can you do with it? Unlike a lot of stocks, crypto does not have an underlying income generating business that allows it to pay traditional dividends just for owning it. One way to make use of your idle crypto is to stake it, which is another way of saying lock it up into the protocol to earn rewards, which helps secure the network. Another way is providing liquidity, which is another way of locking up your crypto, except in this case it goes towards helping a Decentralized Exchange process trades. THORchain’s Savers program is a good example of this. Being that these are new technologies, proceed at your own risk. Your funds aren’t permanently locked up, but it can take some time and effort to unstake/remove your funds.
We will outline what we believe are the easiest ways to earn rewards on your crypto below, with links to their respective pages.
*It is always best practice to keep good records of these rewards for tax purposes.
- THORChain’s Savers program (BTC, ETH, USDC, LTC, DOGE, and more)
- THORChain’s Liquidity Providers
- Lido ETH & MATIC staking
- AAVE
- Curve Finance
- Trust Wallet’s in-app staking
AAVE
AAVE is an open source liquidity protocol where users can stake their crypto in exchange for rewards, or users can also borrow against their own crypto. It is one of the biggest and most successful platforms for these purposes, and they have options spanning across 8 networks, including Ethereum, Avalance, Optimism, Gnosis, Polygon, Arbitum, Base, and Aave Arc. They have been formally verified and audited, and are battle tested. While no platform can be considered risk free, they have withstood many years of transactions while continuing to offer rewards for anyone that can find bugs in their systems so they can continue to enhance the security.
To access the protocol and begin staking to earn rewards, launch their application, connect your wallet, select the asset and the amount you want to supply. Your passive income rewards are based on the demand for borrowing. You can also borrow against the asset you just supplied. The interest you earn by supplying your crypto can help offset the interest that accumulates when you borrow.
