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Top 10 crypto passive income ideas – methods to earn online with little time!

Photo by Vu Thu Gaing, Unsplash

Top 10 crypto passive income ideas – methods to earn online with little time!

Ten tried and tested ways to earn crypto passive income. From simple to the complex and capital intensive to zero cost, I provide an overview of the top 10 methods to earn money from crypto passively and build a life of freedom.

Passive income is the holy grail of income — money that is earned without effort, or with very little effort.

In this article I will share…

10 ways to earn passive income from crypto:

  • Mining (& cloud mining)
  • Lending
  • Staking
  • Nodes & Masternodes
  • High interest saving ‘accounts’
  • Liquidity pools & farms
  • Crypto affiliate programs
  • Airdrops & forks
  • ‘Crypto passive income' projects
  • Passive income platforms

With the exception of mining, I have had at least some personal experience in all the above methods.

Crypto Passive Income Methods Compared

Potential
Reward
Risk
Level
Minimum
Invest
Setup
Time
Mgmt
Time
Skill
Needed
Mining
Cloud Mining
Lending
Staking
Nodes
Managed Nodes
Saving 'accounts'
Farms & pools
Affiliate programs
Airdrops & forks
PI projects *
PI platforms *

* PI = Passive Income.  Very crude comparison — read article for full details. www.vanlifeincome.net

The easiest way to earn passive income is to have a large sum of money and invest it. However, not everyone has hundreds of thousands of dollars to buy a rental property or invest in the stock market.

Thankfully, there are many crypto passive income opportunities that are so lucrative it takes a lot less money than when compared to traditional methods.

How do I know?  Because I have done both! 

From real estate to book publishing and print on demand (POD)…and virtually every crypto passive income method you can imagine. And now, the only thing I pursue in terms of passive income is crypto or crypto-facilitated

One of the questions I get asked most often is…

How can I make $1,000 per per month with crypto passively?

To put it simply, you would need $3,300 in a crypto that returns 1% per day (30% per month) or $13,300 in something that returns 0.25% per day (7.5% per month) in order to earn $1,000 per month passively. 

I receive this question for a variety of numbers and timeframes! eg.

How can I make $100 per day with crypto passively?

You would need $10,000 of crypto in something that earns 1% per day (30% per month) or $40,000 earning 0.25% per day (7.5% per month) to earn $100 per day passively. 

However, making passive income and deciding which method is right for you from crypto is rarely that simple or consistent.

Below I share 10 methods to earn passive income from cryptocurrency, ranging from capital-intensive to those which require no money at all, those which are time-intensive to those which require almost zero time…and everything in-between!

Feel free to skip through the table of contents to the bits that interest you most — it’s a long article!

1. Mining

  • Potential Reward: high – if crypto is in bull market, med if flat.
  • Risk Level: high due to correlation with crypto (bear) & technical risk.
  • Min $ Initial: high due to cost of equipment.
  • Setup Time: high due to equipment & coding setup.
  • Mgmt Time: fairly high due to monitoring of rigs & code.
  • Skills needed: high! No explanation needed lol.

Mining is one of the most popular ways to earn crypto. Despite being one of the most expensive to set up. For maximum gains, the process requires you to invest in a mining rig of good quality and join a mining pool. Unlike the early days, when everyone with a PC could mine Bitcoin, these days, the standard hardware to make real money will involves powerful specialist computers like the Antminer S19. Note that there are often long lead times for getting your hands on these machines.

Some cryptocurrencies can still be mined with a computer at home, such as Monero or Litecoin. However, the cost & risk vs reward ratio is not great, especially with energy prices soaring.

Furthermore, maintaining your mining rig can be quite costly and take time.

So, if you’re going down the hardware route, make sure you have readily available resources because the eventuality of breakdowns and outdated software might significantly impact both your earnings and your time — it could turn out to be not-so-passive 😉 Cloud mining is an alternative strategy to traditional crypto mining.

1.1 Cloud Mining

  • Potential Reward: high – if crypto is in bull market, med if flat.
  • Risk Level: high due to correlation with crypto (bear) & centralized risks.
  • Min $ Initial: low-medium; some platforms have very low starting costs.
  • Setup Time: low; the platform looks after the rigs and code.
  • Mgmt Time: low; the platform monitors everything for you.
  • Skills needed: low; usually just register and deposit funds.

What is cloud mining?

Cloud mining is the contribution power, aka “hash power”, from your computer or a virtual machine to special third-party rigs. You provide the power, and the cloud mining company looks after the mining equipment and technical aspects. There are companies that cover all aspects, including the power — you simply rent or lease a contract and they do the rest.

This approach is much less risky than the investment of time, skill and money required to setup your own hardware.

Even some of the best cloud mining software is accessible for as little as a $50 investment and provide a much better form of crypto passive income than running your own hardware. However, obviously you are working with a centralized entity – ie. you are giving your funds to someone else, rather than doing it all yourself.

Best cloud mining companies

Nowadays, there are many companies offering cloud mining services. Always do your due diligence before handing over any money as there are also scam companies in operation. Here are five to get you started.

  • Hashing24 – founded in 2015, this is one of the oldest cloud mining companies.
  • StormGain – a beautiful, award-winning and multifunction crypto app. 
  • HashShiny – a 2017 company that provides 1.5% of the world's BTC hash rate!
  • IQ Mining – operating for 4 years with advanced mining algorithms for higher payouts.
  • ECOS – another multi-function app with excellent mining opportunities.

The above companies and apps are a good place to start. They have all been established for several years and are trusted cloud mining softwares with daily payouts and low minimum requirements.

2. Lending

  • Potential Reward: low, especially in bear markets.
  • Risk Level: low-medium. Centralized risks if CeFi.
  • Min $ Initial: low – most platforms don't have minimums.
  • Setup Time: low – usually just a few clicks, however research takes time.
  • Mgmt Time: medium; need to shop around & move for best APY.
  • Skills needed: medium if DeFi, low if CeFi.

Lending crypto makes it easy to accrue interest on your digital assets, however many crypto lending and borrowing platforms require you to lock up your crypto for a set period. Before you commit to lending as your crypto passive income method, you must know the % APY or APR rate and any fees or lockups involved.

Firstly, borrowing and lending can be centralised (CeFi) or decentralised (DeFi). If you’re not familiar with these terms, here are quick definitions as the terms will be used throughout this article;

  • CeFi – Centralized finance: These are ‘custodial’ services, meaning you deposit your crypto into a centralised platform, managed by humans. They take custody of your crypto. Beyond the risks associates with lending, there is a risk of the company ‘going under’, stopping withdrawals or changing the rules.
  • DeFi – Decentralized finance: These are ‘non-custodial’ services, meaning nobody takes ownership of your crypto – your tokens are managed from your wallet by the smart contract. DeFi is generally seen as superior to CeFi. Beyond the risks associates with lending, the biggest risk is the smart contract being hacked or exploited.

Lending and interest rates change all the time, so if you choose this route, you’ll need to do research and check in fairly regularly for chances and the best deals. Whilst centralized platforms are the easiest way to get started, I would encourage you to invest some time learning more about DeFi as this is where the innovation is happening.

Best CeFi lending platforms

There’s a good chance your crypto exchange offers lending and borrowing however they usually don’t offer the best rates. Here are three that do;

  • BlockFi – can be as high as 15% on crypto and 8.5% on some stables.
  • Nexo – currently up to 12% on stables and up to 16% on cryptos.
  • YouHolder – leveraging their ‘multi-hold’ and turbo can return triple digits!

If I were to use a CeFi, I would spread my crypto across multiple platforms to reduce risk.

Best DeFi lending platforms

As DeFi innovates, we’re seeing more and more platforms (protocols) coming to market. Here are three of the most trusted.

  • AAVE
  • Compound
  • Oasis (MakerDAO)

There is not a lot of difference between the above, it mainly boils down to personal choice. I have used AAVE on Polygon network for borrowing and found it excellent. 

The downside of lending is that it generally only works well (good interest rates) when the market is going up. The three DeFi platforms above, many rates dropped below 1% for lending in 2022!

Regardless of markets, lending is not a great way of earning passive “income” due to the much lower rates than other opportunities. Obviously, if you are holding a lot of cryptocurrency and are happy with the risk then lending crypto definitely worth considering.

3. Staking

  • Potential Reward: low-high; depends on how risky the tokens are.
  • Risk Level: low-high; depends on tokens AND platform used.
  • Min $ Initial: low; usually no minimum.
  • Setup Time: low; usually a few clicks – research takes time.
  • Mgmt Time: low; however you can make it more ‘active'.
  • Skills needed: low-medium; depends on platforms & methods used.

Staking usually means locking up your tokens to help validate transactions on the network and, in return, earn rewards. However, in recent years and especially mid 2021, a new wave of rebase staking platforms emerged, also referred to as ‘DAO's, which is generally an inaccurate description.

The income from these rebase staking tokens, such as Olympus DAO, Wonderland’s TIME and KLIMA was sky-high with crazy APYs and crashed horribly at the end of 2021, early 2022.

The amount you earn will depend on the token and the duration you stake it. 

How much can I earn staking crypto?

The returns from staking can crypto vary hugely, from single digit APY to +50% APY. By locking up crypto, aka staking, some people have earned life-changing returns while unfortunately others have lost. This is because the profit is very highly correlated to the performance of the crypto in question.

If done correctly, staking can be a low-effort and very passive approach to money-making online using the Proof-of-Stake consensus algorithm. 

Popular staking cryptos include; Polkadot, Cardano, Avalanche and Solana.

Alternatively, you could stake stablecoins, which in theory are safer due to the lack of volatility however, generally offer much lower APYs and come with their own risks.

Rebase staking

These are the highest risk plays in staking and the only one I will mention is OlympusDAO (OHM), the original. It currently has an APY of around 300% (mid 2021 it was 15,000% APY!). Having emerged mid-2021, Olympus was forked many times. Lots of money was made and lost in these ‘DAOs’ (DAO is not an accurate description, but that’s how they were often referred to). Read more about that here.

CeFi staking

Most exchanges such as Binance, Kraken, Crypto.com, etc. make it easy to stake and earn APY for major coins/tokens in a few simple steps. 

Often, this is people’s first introduction to staking. You’ll also find most of the apps mentioned in this article such as MyContainer, YouHolder and StormGain also offer staking and tend to offer a better user experience than the big exchanges.

DeFi staking

Most DeFi platforms provide staking opportunities as part of their platform and, in my opinion, DeFi is nearly always the better choice.

Furthermore, by staking using a DeFi platform, you will also likely gain the opportunity for yield farming and liquidity pools, which I’ll touch on later.

Staking new tokens

Finally, very often new tokens and protocols use staking as a method to raise funds and often offer exceptional rewards for locking up. This can be extremely lucrative if you get the right one! 

For example, TNGBL, the token for Tangible marketplace that launched mid-2021, offered an opportunity to lock up any quantity for any period up to 4 years; the longer the lockup, the bigger the reward — by locking up for 4 years, you could have received a 25X on your token holdings. I personally locked up several batches of TNGBL for various periods, but mostly the full 4 years.

If you are a bullish supporter of a crypto and intend to hold, it’s worth research to see if they have any staking opportunities. Note thought, that long-term lockups have potential to be very lucrative, but are not really cryptos for passive income.

4. Nodes and Masternodes

  • Potential Reward: high if in flat or bull market.
  • Risk Level: high due to crypto correlation and tech/equipment.
  • Min $ Initial: high; there is a minimum collateral & tech requirements.
  • Setup Time: high; need to set up server and configure code.
  • Mgmt Time: medium; need to monitor for changes & uptime.
  • Skills needed: high; understanding of servers & code.

Masternodes has some resemblance to staking in that you tie up your tokens and earn rewards in return. There is also a similarity to mining in that computing power is required. However, the mechanics are very different.

If you wish to operate a node, there will be requirements for both hardware and processing alongside token collateral. DASH is one of the oldest masternode coins that is still popular, but the requirement of 1,000 tokens means the cost is out of the reach of most $$ 46.74 * 1,000.

The APY from masternode can vary hugely, from single-digit APY to 1,000%+. As with everything, the higher the potential reward, the higher the risk and most of those offering crazy APYs are extremely low market cap coins that come with additional risks and considerations.

You can also operate validator nodes on networks such as Avalanche

However, getting into the nitty gritty here is not something we can do due to the complexity. Manual configuration and management is also not something I do myself — I always opt for the easier and more passive option.

Which is…

4.1 Managed nodes

  • Potential Reward: high if in flat or bull market.
  • Risk Level: high due to crypto correlation and centralized.
  • Min $ Initial: low-high; varies depending on platform & coin.
  • Setup Time: low; usually just deposit your coins.
  • Mgmt Time: low; platform takes care of everything.
  • Skills needed: low-med; depends on platform and coin.

A third party manages your nodes, takes a cut or charges a fixed fee and pays you the rest.

Similar to cloud mining, it means you have no responsibility for the hardware, upgrades etc. Although I do recommend checking in on them occasionally eg I have used Flits for almost a year and during that time, my nodes went down once. 

You also have to check and understand what you are responsible for eg if node collateral changes at a given block, you may have to add more coins and restart your node.

Some node management services are;

  • Flits
  • Allnodes
  • MasternodesOnline

In addition, we are seeing new players come onboard for next generation crypto. For example,  I already used PoktPool for my $POKT — this is managed and fractionalized platform that allow you to participate and auto-compound rewards, even if you don’t have enough collateral for a full node. 

I’m also very excited about $DAG, which uses nodes, and I intend on participating in a similar ‘co-nodes’ managed service when that becomes available.

The additional rewards earned usually cover the fees which make these almost a no-brainer. The caveat is you are handing your tokens over to a third party (centralized – they have custody of your coins), so be sure you can trust them!

Similar to staking, there can be great rewards to be had from masternodes but, much depends on the price appreciation of the underlying token. For example, in the 2022 crash any profit I made from $POKT has been wiped out by the depreciation of the token price. I’m still bullish on the long-term tech though so I’m happy to let it roll.

A really simple option worth considering is Yieldnodes – multiple masternodes managed and pooled for profit split.

5. Crypto saving ‘accounts’

  • Potential Reward: low.
  • Risk Level: low-med; mostly centralized.
  • Min $ Initial: low; most platforms have no minimum.
  • Setup Time: low; usually just deposit your coins or tokens.
  • Mgmt Time: low; platform takes care of everything.
  • Skills needed: low-med; depends on platform.

You can simply deposit your crypto into a trusted virtual savings account and watch it grow. 

Again, there are CeFi and DeFi opportunities.

Keep in mind that interest rates vary and change a lot. They also vary depending on your choice of cryptocurrency, so if you’re considering this as an option, be sure to do your research at the time. 

As in a traditional bank savings account, this approach helps your idle assets accrue value, however it’s not really going to generate life-changing returns.

At the same time, you don’t have to manage anything or actively participate in the process. It has the advantage of being low risk and sustainable. While this is convenient, you can adopt the dollar-cost averaging (DCA) approach, where you add more funds to your capital regularly. Compounding the accrued interest is a great way of scaling up quickly.

5 crypto savings accounts

Below are five crypto products that are comparable to high interest savings accounts. Each is very different.

  • YouHolder – have low-risk guaranteed APY saving options.
  • Gelt – a hybrid DeFi- CeFi platform that makes DeFi accessible.
  • Freeway – earn 40% APY on fiat currency and crypto.
  • mStable – fully decentralised, with a ’save’ functionality.
  • fluid.ch – one to watch if you also want traditional-style banking.

With the exception of Freeway, which isn’t really a savings account but operates in a similar manner, you won’t earn much passive income from your crypto via high interest accounts, it’s more about trying to beat inflation….but what you do earn will be extremely passive and at the lowest risk level.

Yield-bearing stablecoins

Whilst we’re here, an alternative to ‘savings accounts’ to consider are automatic yield-bearing stablecoins — stablecoins that pay you interest simply for holding or staking without lockup period.

I have a post comparing 5 of interest-bearing stablecoin tokens here

Of the five, four of them are decentralised in the sense that you retain custody in your own wallet. mStable, already mentioned above is one of them, others are USDs, USD+ and USDR. They sit at around 9% APY average and are very passive; no need for liquidity pools or farming. 

Which leads us to…

6. Liquidity pools & farms

  • Potential Reward: high; however high rewards require activity.
  • Risk Level: high; impermanent loss and many other risks.
  • Min $ Initial: low; most platforms have no minimum.
  • Setup Time: high; mainly due to the research involved.
  • Mgmt Time: high if you want the highest APYs.
  • Skills needed: high; good understanding of DeFi required.

Farming and liquidity pools (LP) involves “lending” crypto into decentralized finance (DeFi) pools and earning interest. 

Using LPs and farming as a means of passive income can vary hugely in the level of risk, rewards and ‘passiveness'.

It is a big step up from the already-mentioned methods such as typical P2P lending and staking. And it can be as passive or active as you want — but earning high APYs means being active and monitoring opportunities.

Not for beginners!

In essence, both contribute to the functionality and liquidity of DeFi platforms, giving the platform the much-needed funds that enable trading and/or lending to occur.

Uniswap, PancakeSwap, SushiSwap, Compound, TraderJoe and countless others all require decentralised liquidity to operate.

Liquidity Pools

Liquidity Pools (LP) are the backbone of DeFi and the easiest of the two to understand. 

You deposit your token pairs into a pool (a smart contract). The DeFi platform then uses these tokens to facilitate operations such as trading or lending between the pairs…much like how banks use your money. 

You become a ‘liquidity provider’ and, in return, you earn a percentage of all the fees earned by the platform using that pool, proportional to the share of the liquidity you provide.

For example, if you were the only person in an LP of ETH-DAI (ie. You deposited equal parts ETH and DAI), then you would earn 100% of the fees allocated to LP.

The major setback of liquidity pools is the issue of impermanent loss. This occurs especially under high price volatility between the 2 tokens in the LP. The presence of bugs in the smart contract and hacking are also big risks, especially if you are playing on new platforms…which is often the case if you are chasing high APYs. Providing liquidity to a pool with unlocked liquidity is a risk as your funds are liable to malicious attacks.

There is too much here to cover LPs in detail, but suffice to say, they are one of the more advanced methods of earning income from your crypto and one with the most varied risk-reward ratio

If you choose to give this a go, the safest method for passive income is to stick to a Top 20 crypto and pair it with a stablecoin on a reputable platform.

As with most income methods, the least risk usually provides the least return and, in terms of being a liquidity provider, this is also usually true.

Yield Farming (liquidity mining)

The next step up from simply depositing in an LP, which can already carry significant risks, is yield farming.

When you join an LP, you receive LP tokens as a receipt and means of tracking the tokens you deposited and the rewards you are due.

With yield farming, you can take these tokens and deposit them elsewhere to earn yield. 

It can be extremely complex, there are many strategies and I wouldn’t really call it passive income as so much time is usually involved to monitor and move things around. The reason is the it is generally not sustainable and so farmers are always on the hunt for the latests top-notch APY to move into.

Not my cuppa tea, but it might be yours 🙂

7. Crypto affiliate programs

  • Potential Reward: medium; varies hugely.
  • Risk Level: low in terms of $$$.
  • Min $ Initial: low; you can get started with zero $$$.
  • Setup Time: very high; lots of writing and community building
  • Mgmt Time: medium; depends on what methods you use.
  • Skills needed: medium; you'll need some marketing skills.

Crypto affiliate programs are another way to generate passive income. Ads too if you have a very busy or large website whereby manually managing affiliate ads becomes too much hassle. 

If there is a product or service you use or see value in, it may have an affiliate program whereby you can earn crypto if you refer someone who registers and/or purchases.

These days, almost every large product or service has such programs, from Amazon an Apple, to Binance and Coinbase. Some are simply called ‘refer a friend’ and earn you in-app benefits or game-of-chance rewards eg. Get a free token when you refer a friend (token could be anything from a $0.01 value to thousands of dollars).

The advantage of this approach to generating passive income is that it costs nothing in terms of $$$ — you do not need to make any initial financial investments or tie your capital down. However, if you want to do it as a means of earning a passive income from crypto, it will take significant upfront time and effort (maybe a small amount of $$$ too); you need to build an audience and provide value to them.

For example, although my primary income is directly from crypto, this website also earns income from various affiliate programs — some of the links may earn me a commission or some form of benefit. 

It’s one of the reasons I can afford to not have the site is not full of ads (eg Adsense) which can slow the site down immensely and make for a bad user experience. 

However, it often takes me several days to write each piece of content (high initial investment of time)…some of which will earn zero income, some will eventually (usually after many weeks/months) earn a small amount on a regular basis. With websites, you are at the mercy of Google. And there's maintenance, security, optimisation which can take a few hours to many hours per month.

Social media marketing

Another option for sharing affiliate stuff is social media. Some people love Twitter, Reddit, Tiktok etc and thrive on interacting. And I’m sure you’re already aware of how massive it is on Youtube.

For me, social wasn’t an option as I’m much more focused on passive earning and I’m kinda shy — the thought of being on YouTube doesn’t appeal. 

Although you need to be fairly regular with blogging, it is not as intense as the expectations on social media. Eg. I can sit down and write/research articles several hours per day for a couple of weeks and I love it…but I also love the ability to step back and do nothing for a few weeks 😉

The great thing about social media is it’s fast and free — no website setup, plugins, hosting, optimisation etc to worry about. Also, you can build an audience very quickly and see results fast, unlike blogging which takes a lot longer.

If you go down an ‘affiliate’ route, I recommend it only if you have a passion for your niche and can be true to yourself and others. It’s also good to share experiences even if they don’t sit right eg this, if they have not worked for you eg this or if they have (probably) failed eg this.

Top 6 crypto affiliate programs

Below are six crypto affiliate programs. They are not top for earnings, but they are “top” as they are all products that I personally use regularly:

  • Yieldnodes – my primary crypto passive income; approx 9% per month.
  • Freeway – my primary crypto ‘savings’ income; 43% per year.
  • Kraken – my off-ramp to fiat currency (although I never registered for their affiliate).
  • CoinTracking – the software I used for tax and portfolio tracking.
  • Flits – an app for simple management of masternode (although after writing this article, I’m keen to explore some of the other staking and mining apps!).
  • Ledger – my crypto hardware wallet of choice; the Nano X.

I also have a few income-related platforms with a referral aspect that I am experimenting with which you can read more about here. 

Registering for Amazon Associates (the name for their affiliate program) may also worthwhile depending on what niche you are in eg. It’s great for vanlife as we purchased a lot of our stuff through it, although you’ll need an audience first to get approved.

8. Airdrops & forks

  • Potential Reward: low-med; depends on price movement.
  • Risk Level: low in terms of $$$; just research.
  • Min $ Initial: low; sometimes zero, but often you need to hold something.
  • Setup Time: low-med; often there is nothing to setup.
  • Mgmt Time: medium; research and some actions take time.
  • Skills needed: low-med; for advanced techniques, DeFi is required.

You can never get it wrong with free token distributions. Airdrops and forks ere are two ways that you can position yourself for them.

Airdrops

There are several ways to get airdrops. Most times, developers do major giveaways to gain attention and provide awareness to an existing audience. This usually happens because you are holding a token and the developer of a new token decided to airdrop as a promotion.

Very often, you’ll find opportunities in Discord groups or on Twitter. For example, tweeting or engaging to qualify for an airdrop. Not exactly passive income, but if you’re watching the space then why not? There are a few sites that list airdrops such as airdropalert.com.

Sometimes, you'll find people sharing airdrop qualification ‘methods' or procedures on Twitter that involve moving crypto from one place / platform / network to another in order to meet requirements for forthcoming airdrops. These can be lucrative but time-consuming and often require a minimum amount of $$$.

Note: Be wary of scam airdrops.

These are tokens that suddenly appear in your wallet via airdrop with no reason. Binance Smart Chain (BSC) is one of the most targeted. These scam tokens are fake. Very often, they will direct you to a phishing website and get you to connect your wallet to a scam contract and then empty your wallet. BE CAREFULL!!!

Forks

Hard forks happen when when there is some form of disagreement within a protocol and the only way forward is to fork it — make one or more copies. As a result, anyone holding the existing coin ends up holding the same quantity of tokens of the new coin.

The biggest one to date has been Bitcoin when it was forked to produce Bitcoin Cash (BCH) and Bitcoin Gold (BTG). Big money was (or could have been!) made for zero effort — BCH launched at around $300 a coin and soared to over $3,500.

As Ethereum approaches the merge move to Proof of Stake (PoS), there have been a lot of talks about forks, in particular a Proof of Work (PoW) fork. In which case it could be beneficial to hold Ethereum in your wallet in order to receive the fork tokens.

Whilst I wouldn’t classify Airdrops or Forks as passive income due to their sporadic nature, they are work keeping an ear out for. Tools such as Blockchiar’s Release Monitor are helpful if you choose to go down this route.

9. ‘Crypto passive income’ projects

  • Potential Reward: high; totally depends on project.
  • Risk Level: high; totally depends on project.
  • Min $ Initial: low-med; often there is no minimum.
  • Setup Time: low; usually just a few clicks
  • Mgmt Time: low-med; depends on project.
  • Skills needed: med; MetaMask & networks / bridge knowledge.

These are token-based projects that primarily exist to generate income. It’s a growing area. How ‘passive' they are varies hugely — most time is spent on research and then monitoring developments in the early days.

‘Passive income cryptos’ became a rage in 2021 with many making millions and many crashing and burning and many outright rugs (see A brief history of ‘DAO’ and ‘nodes’ models + rug season 2021/22– it was a wild ride!)

There were also many NFT passive income projects, however it’s not something I participated in much other than NFTs for boosting Strong node rewards, multiplier lock-ups for Tangible and passive income from Fiscus.

Some of these ‘passive income crypto‘ projects still exist today, although the majority have failed and/or were scams. Most of those that still exist have had to evolve to survive and are still struggling to find sustainability. 

One that continues, albeit at a much lower price point, is Drip Network — it was never subject to the crazy big emissions of “node model” projects and DAOs with crazy APYs. Another newer project that is a slight evolution of the Drip model and developing ‘realyield‘ utility is Furio crypto that is also developing Furbet.

Evolution of crypto passive income projects…

We are now seeing new projects that have taken elements of these failed models and created something completely new, such as XETA Capital. They are doing something that generates “real world” income and is almost a node-Drip-hybrid in terms of tokenomics and how the rewards are distributed.

Several other projects used the OlympusDAO-famed rebase method to kick off their #RealYield projects. One example is Tangible — a ‘real world asset’ (RWA) investment marketplace whereby token holders can earn passive income through holding TNGBL tokens and in doing so gain a share of the marketplace fee. FiscusDAO had intended on using a similar method as a means of distributing/minting their tokens, although that is currently on hold and a new method under discussion.

We’re also seeing passive income stablecoins, whereby a yield (interest) is provided directly to token holders. Platforms that distribute trading fees to holders/stakers, essentially simplifying lending, farming and liquidity pools and others with interesting gamification techniques such as Wealth Mountain.

The ‘project’ space is ever-evolving and you need to pay attention as new protocols come and go. 

These projects are also extremely varied in their risk-reward levels; some are extremely high risk, whilst others are relatively low.

One thing's for sure; tokenomics can gamification can only go so far – if these ‘passive income cryptos‘ don't find utility to support them eventually, they will ultimately fail.

I’m always interested to hear about these type of projects, especially if they are innovative and have real utility behind them so if you know of any, send me a message!

10. Passive income platforms

  • Potential Reward: high; depends on the platform.
  • Risk Level: high; depends on platform and people.
  • Min $ Initial: med; but can be low or high.
  • Setup Time: low; usually just the research.
  • Mgmt Time: low; most are designed to be very passive.
  • Skills needed: low; usually just transferring crypto.

These are almost exclusively designed to create yield and return for their users in a relatively simple manner – ie. you generally don’t need any special understanding of DeFi, approving smart contracts etc to get started with platforms. 

In some cases, you may find crypto is barely mentioned however, it is actually used in the background and/or to deposit and withdraw.

The main difference between ‘platforms’ and ‘projects’; platforms are generally centralized and easy to use for people new to crypto. Projects are token-based and usually require higher level of crypto knowledge to participate, eg MetaMask, bridging etc..

Very often, you will see rewards quoted as % either daily, weekly or monthly.

Crypto passive income platforms have been around for many and can be very lucrative. They vary hugely in their business model and how they operate. There are many that seem extremely shady. 

Thus, we can’t place them all in the same/similar bucket for comparison.

The sector is also full of “make money”, network marketing type MLM companies which can be a red flag. I’m not against MLM, I feel it can be a very good way to market a product and a very fair way to compensate if done right…however, only if there is a “product” first and foremost.

Several of the platforms already mentioned in this article could be classified as ‘passive income platforms’ eg cloud mining and managed masternodes are essentially mini money machines, albeit in a volatile crypto market.

Yieldnodes is the only crypto passive income platform I can offer a full, long-term experience on. I have been a member since December 2020 and averaged around 10% per month in that time (2022 has been more like 8.5% average). Their user experience and communication is excellent.

Another platform I am delighted with is Freeway, I feel it leans more towards the “savings” than “income” — earning +40% per year is FANTASTIC (and their user experience, comms etc have been excellent too) but, unless you have +$50,000 in there it’s not going to generate a passive income you can live on.

Automated Capital is my latest venture. You can learn more on why I chose it here. Earnings are looking like around 1% per day via a managed trading bot that operates Monday-Friday; so around 20-30% per month! I only joined in August 2022 so its early days but the experience so far has been good and their customer service is 24/7.

There are many platforms I have also passed on, some of which I share in the blog or in monthly updates. CashFX is one I turned down multiple times due to being very heavily MLM-focused. Same with NovaTech, even though I know people are  making a lot of money, the heavy focus on network marketing just does not appeal. #ProductFirst

Just be wary when looking into any of these programs and platforms, especially if someone solicits you. 

If the website or presentation is lite on “product” or, if you have doubts about the product’s existence or value relative to price, and it is massively lucrative in terms of “business opportunity”, ask yourself – is this person sharing it with me for the right reasons? 🤔

Which methods do I use?

I use several because I feel all are fairly high risk, even those at the lower end of the spectrum, and I like to diversify my income streams as part of the mitigation.

  • Lending – but only to borrow; never as an income stream.
  • Nodes & masternodes – only hosted/managed. Currently Poktpool & Flits. I’m interested in expanding to others.
  • Savings – Freeway for me, although I have downloaded all the mentioned apps and will be testing them with smaller sums.
  • Affiliate – this website contains affiliate links. I’ve shared my faves above.
  • Passive income projects – I’m still in some of these and continue to keep an eye on the market.
  • Passive income platforms – yep; Yieldnodes is my most long-term and am looking into others.

I’m very interested in the cloud mining and looking more closely at some of the multifunction apps for masternode and staking. However, given the state of crypto and the world, I'll probably put off investing in either of these until we see signs of things bottoming out.

I have participated in LPs and farming in the past, however net gain was not great — I’d need to pay more attention, and some of it was a nightmare to track for tax. Too active for me! I also don’t go chasing airdrops for the same reason; time.

Round up

Everyone dreams of having multiple streams of income, especially passive income. Few have achieved this goal because good passive income opportunities are elusive beasts and often require a reasonable level up-front investment, be that time or money…or a combination of both.

I know only too well as I started this journey back in November 2020 with very little other than a dream of freedom. 

Anybody who makes out that creating passive income (be that from crypto or another means) is fast and easy is either very lucky, already very rich or talking bullshit!🐂💩

Without doubt, crypto has enabled many more opportunities for passive income than previously existed.

If you look through this website you will see that 99% of my passive income now comes from crypto (previously it would have been Amazon books, websites and ‘print on demand’).

Hopefully this article has outlined enough ‘crypto passive income’ methods that you will find something to get started with, ranging from capital-intensive to capital-free, time-intensive to (almost)time-free…and everything in-between!

Take action by taking a deeper dive into some of these methods and combining approaches with a few creative measures of your own. Keep busy, keep learning and you will be earning before you know it!

#GodSpeed to you!

Crypto passive income ideas compared – please link back if you use this image. Thanks 🙂

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Disclaimer: As with everything on this site, this article is for informational purposes only and is not advice of any kind. I simply share my experiences and my opinions for information. I am not a financial adviser and I am not providing investment advice or financial or legal advice of any kind. Cryptocurrencies (and most business opportunities) are very high risk. Many of the opportunities I discuss exist in new, high risk and unregulated markets. Some methods require significant investment of time and/or relevant skills. Please do your own research (DYOR) and due diligence; do not blindly follow anyone!

My #1 performer since 2020 – monthly updates always added!

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