Absolutely delighted to share our passive income guide with you all today ✅
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PASSIVE INCOME GUIDE
With the right knowledge, you can outperform every single traditional savings account in crypto and Build Wealth ✅
However with so many options to choose from, finding that knowledge can be incredibly difficult 😔
Don’t worry, we’ve made it simple. We’re proud to bring you this Passive Income Guide 📖
We will cover how to optimise your returns through:
Centralised Passive Income
Decentralized Passive Income
Most platforms offer you an interest bearing account that works very similarly to your bank’s savings account.
You trust these platforms to manage your money and in return they provide interest.
In the case of centralised platforms your trust is put in the company, in the case of decentralized platforms your trust is put in the code 🙏
What Are the Risks
Every one of these platforms come with risk 🚫
You are putting trust into these companies and you can lose everything you put in.
This article is for educational purposes only, nothing we say is financial advice, crypto is an extremely high risk industry so do your own research. Some of the links we’ve included are affiliate, they give you rewards and discounts and earn us a commission.
Here are a few of the risks we’re going to flag up.
Most of these interest bearing accounts either self-custody or partner with another exchange that takes over custody, you won’t have your private keys 🔐
These platforms are not FDIC insured (although it’s worth noting that many have their own separate insurance funds) 💰
You will have to go through KYC processes 🔍
Decentralized protocols are all governed by computer code and therefore subject to human error ❌
One of the tradeoffs for this decentralization and independence is that the user interface for someone brand new to the space can take some time to get used to ⏰
Platforms Koroush AK Personally Uses:
As you work through our list of platforms, it might interest you to know my preferred ones 🔥
My decision making process is simple. I like to minimise risk and maximise reward 📈
I do that by finding the specific optimal platforms for returns on the different assets I hold and then spreading my risk across different platforms 🚀
That has resulted in the following mix:
Crypto.com to earn interest on my $BTC using their 3 month lock up and bonus rewards for holding CRO to earn 6.50% APY
FTX margin lending for a portion of my stablecoins to earn 0.88%-100.00% APY
NEXO to earn interest on a small portion of FIAT holdings
Yearn.finance for passive income on altcoins
Badger.finance for passive wBTC income
So now we’re going to a more detailed platform breakdown starting with a hidden gem I’ve been using recently to regularly get up to 0.88%-100.00% APY 😎
1️⃣ FTX is an industry leading cryptocurrency exchange that’s surprisingly good for generating passive income.
Earn: Stablecoins: 0.88%-100.00% and Crypto: 0.88%-12.00%
Pros: USD Stablecoin returns are fantastic (sometimes up to 100.00%)
Cons: Highly variable rates
Next we’ll look at some great platforms that require you to hold native tokens for optimal returns.
2️⃣ Crypto.com is an all in one beginner friendly mobile app that offers a lot of features.
Earn: Stablecoins: 8.00%-14.00% and Crypto: 2.00%-8.50%
- Bitcoin returns at 6.50% and stablecoin returns at 12.00% with a 3 month lock up and at least 5000 cro staked
- Generally competitive rates when combined with a 3 month lock up + staking of the native crypto.com token CRO
- 3 month lock up means you are trapped if the market crashes or you need your money
- You have to take on extra risk by holding CRO
3️⃣ Celsius is a blockchain based fintech platform with a suite of lending, savings, and payments solutions
Earn: USDT (10.51%-13.30% APY), BTC (4.06%-6.20% APY) and ETH (5.05%-6.35% APY)
Pros: Highly reputable
Cons: To earn the best rates, you have to take on extra risk by holding CEL
4️⃣ Nexo is a crypto lending and borrowing platform that allows users to earn interest on stablecoins and crypto and collatorize these assets to take out loans.
Earn: Crypto (BTC, ETH, XRP): 4.00% - 8.00%, Stablecoins: 8.00% - 12.00% and Fiat (EUR, GBP) - 8.00% -12.00%
- Competitive cryptocurrency rates when holding NEXO token
- NEXO allows you to earn interest on fiat holdings at the same interest rates as stablecoins. This is particularly useful for EUR and GBP holders given the lack of stablecoins pegged to these currencies
- Interest is paid out daily
- Nexo is ISO27001:2013 complaint which is the global standard for managing risks relating to security of information
Cons: To earn the best rates, you have to take on extra risk by holding NEXO
To use these you’ll need a metamask wallet. Metamask is a cryptocurrency wallet that gives you a simple but secure way to connect to blockchain based applications.
To install Metamask, simply go to Metamask.io, click “download now” and install on your browser of choice. It will be added as an extension to your browser. Then follow this sequence: Get Started, Create A New Wallet, Create Password, View Seed Phrase, Confirm.
Make sure to write down and save your seed phrase as this is the only way of logging into your wallet if you forget your password. If you’d like a more in-depth tutorial, check out this fantastic article written by Team GaryVee.
With Metamask, YOU are in control of your private keys.
6️⃣ Yearn.finance is a decentralized ecosystem that aggregates lending services
Earn: Highly variable rates
Pros: a great one stop shop for great yields on altcoins
Cons: The process can be intimidating at first
Earn: Highly variable rates
Pros: People who want to try earning the most interest on their wBTC
Cons: The process can be intimidating at first
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Stablecoin Yields As A Bull Market Edge
We mentioned back in April that crypto markets are extremely volatile. What we suggested then is still relevant now: stablecoin yields provide a profitable way of reducing your risk to crypto assets.
Understand that your split between crypto and stablecoins will determine your risk. Keeping a higher amount of crypto means your net worth is subject to high volatility. If the bear market comes, you will lose a lot, but if the bull market continues you will make a lot.
💥 Increasing your stablecoin holdings reduces your exposure to volatility and still ensures you are making serious returns 💥
There’s two ways to go about increasing stablecoin holdings:
1️⃣ Set a clear target. If $200,000 of assets gives you freedom and changes your life, why wouldn’t you reduce volatility as you approach that level? That means, the closer you get to your target, the less crypto you hold and the more stablecoins you hold.
2️⃣ Reduce your crypto exposure every month. The bull market has an end date and every day we get closer to it. Instead of using a set target, we assume that every month the probability of the bull market ending increases. It makes sense to somewhat increase stablecoin exposure and reduce crypto exposure naturally over time.
Not financial or tax advice. The content in this newsletter is for informational purposes only. Nothing in this email is intended to serve as financial advice. We are not financial advisors. Every investment and trading move involves risk. Do your own research when making a decision. See our important security disclaimers here.
Disclosure. Some of the links we’ve included are affiliate, they give you rewards and discounts and earn us a commission. Additionally, the Market Meditator writers hold crypto assets. See our investment disclosures here.