Blog Investing 3 best ways to earn interest on your crypto today

3 best ways to earn interest on your crypto today

date January 5, 2021 time 5 min read 116 views

While cryptocurrencies can yield impressive interest on their own, just holding can be a risky way to earn. A more complete strategy for crypto holders is to earn interest on their crypto. And there are a growing number of ways to do that today. This article discusses the best ways to earn interest on crypto while minimizing costs.

Crypto can be a lucrative investment, but it’s a stressful one.

While overall ROI has been good, many coins can fluctuate well over 10% in either direction on a day-by-day basis. Sometimes it’s hard to know whether you should hold or sell.

But there are ways to invest in crypto besides holding onto the rollercoaster ride of the day-to-day prices or by taking part in risky day trades. And that’s by earning interest on your crypto.

You can earn high interest on crypto at surprisingly stable rates
You can earn high interest on crypto at surprisingly stable rates (source: googleapis.com)

Here are of the 3 best ways to earn interest on crypto

1. Stake proof of stake (PoS) coins

Some cryptos let you earn more of them just by holding them.

These proof of stake coins give you the right to validate transactions and govern the blockchain they are based on. Your influence (and earnings) depend on how many coins you hold. The more the coins you stake, the higher your rewards.

Proof of Stake cryptos can work for your portfolio in much the same way a dividend stock can
Proof of Stake cryptos can work for your portfolio in much the same way a dividend stock can (source: fastly.net)

Some common examples of PoS coins are Tezos (XTZ), Cosmos (Atom), Privacy Coin (PRV), and Polkadot (DOT)

While the official way to stake is usually via a personal node, there are a growing number of ways for the casual hodler to stake as well to earn interest on their crypto.

Sites like Kraken and Trust let you stake into their node and earn a portion of the interest. Kraken boasts rewards of up to 12% annually depending on the type of coin you hold.

Staking is a great way to earn compounding interest with crypto. Just like with a dividend-yielding stock you can reinvest interest or rewards earned from your PoS coins back into your holdings.

2. Earn money on your BTC through DeFi

You can earn interest on many major cryptos just by helping some crypto exchanges maintain their liquidity.

Liquidity is the ease of converting a coin to cash or other coins without affecting the market price. Often, liquidity is a challenge in crypto because of a mismatch in demand and supply.

Decentralized exchange (DEX) liquidity pools solve the liquidity challenge by holding free crypto from numerous investors to help fulfill trading orders.

When you put your crypto in an exchange liquidity pool, you earn a portion of the trading fees as interest. The higher the supply and demand for a particular crypto, the more you earn. 

Exchange liquidity platforms have varying interest rates and terms. Choosing the best exchange liquidity platform can help you earn higher returns while minimizing risk. Here are 5 factors to look out for before you settle for an exchange liquidity platform: 

Platform reputation

Go for liquidity providers with a proven track record and those that have established long-term relationships. These factors help to provide stability in today’s volatile market, which translates to consistent returns for you. 

Ease of withdrawal

Avoid platforms where your funds have to go through long review periods before you can withdraw.

Rates and fees

Be wary of the fees charged to your account as they eat into your earnings. 

Security

Cryptocurrency suffers certain risks like loss through theft. Put your crypto in a liquidity platform that guarantees your funds in case of losses.

Access to support

When you have any issues or concerns with liquidity services, you want a provider that is easily accessible.

Put your crypto in a liquidity platform that secures your funds from losses
Put your crypto in a liquidity platform that secures your funds from losses
(source: retailbankerinternational.com)

3. Lend stablecoins through crypto-backed P2P lending

In the evolving landscape of P2P lending, stablecoin crypto loans are growing increasingly popular as one of the safest ways to earn interest on crypto.

You can easily convert percentages of your crypto holdings into stablecoins for lending on most exchanges. Then you simply transfer them to a P2P platform, lend them out, and start earning interest.

Don’t want to cash out your crypto investment for stablecoins? Crypto-backed P2P platforms let you get stablecoin loans against your crypto assets so you can unlock the value without selling up.

And speaking of crypto loans, we have one of the best services on the market for steady-returns on crypto…

Earn 7% or more on your crypto, fully-secured with MyConstant

At MyConstant, we provide three great ways to earn interest on your crypto:

1. Earn 9% APY on your crypto on our exchange liquidity pool

With our crypto-lend, you can enjoy interest rates up to 9% APY on your BTC, BNB, and ETH; compounded and paid every second. You also enjoy 0 fees, instant withdrawals, and 24/7 customer service.

2. Invest your stablecoins in crypto-backed loans for up to 7% APR

Earn at competitive rates up to 7% when you loan your stablecoins using our crypto-backed lending feature. All loans are backed by crypto collateral worth up to 200% of the loan’s value so we can sell and recover your coins in case of a borrower default.

Want to leave your crypto in a wallet and let them earn interest passively? Our lending pool feature has no fees and anytime withdrawals. And you earn 4% APY of compounded interest on your cryptos while they’re there.

3. Branch out into PoS coins and DeFi with our crypto loans

Want to get involved investing with PoS blockchains or DeFi projects but don’t want to sell your BTC to buy in? A crypto-backed loan may be exactly what you need.

Unlock the value of your assets without selling up with a crypto-backed loan on MyConstant. We accept loans against over 70 different cryptos and let you directly buy some of the most popular cryptos all on our platform at the best prices.

Sign up on MyConstant today and start multiplying your crypto at competitive rates!

**Disclaimer – this article is meant for informational purposes only and should not be seen as investment advice. Make sure to do your own research before making any major financial decisions.

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