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How you can hold up to 17% digital assets annually – Finance Bitcoin News

The mainstream has caught a glimpse of the profits from cryptocurrencies like Bitcoin and Ethereum, but many people are unaware that crypto users also make passive income. While the mainstream financial institutions give people with savings accounts a measly 0.35% to 0.60%, digital currencies can give people 1-17% or even more by employing certain tactics.

Crypto returns that beat the savings account

You may have heard the phrase “make your money work for you” in the past, and that’s exactly what savings accounts do when they earn a percentage of the interest over time. Sure, a person can be a little riskier and invest in stocks and the like, but with a savings account, the money just stays there and accumulates over a period of time. The more money that is held, the more interest an account receives, but these days banks no longer give interest. We can see that some of the top banks in the world are only giving 0.35% to 0.60% returns according to the best savings account rates on bankrate.com.

Crypto Earning vs. Savings Accounts: How To Hold Up To 17% Annually Digital AssetsToday’s bank rates do not offer a saver high returns, none of which offer even 1%.

Now you can do the same with cryptocurrencies and get a much better Annual Percentage Return (APY). Many centralized exchanges offer between 1-12% interest for staking or holding a digital asset on the trading platform for a period of time. For example, on the Coinbase trading platform, you can earn 1.25% APY for holding USDC. Coinbase also offers rewards for staking out Algorand (ALGO), Kosmos (ATOM) and Tezos (XTZ). These three coins see payout rates either daily (ALGO), every three days (XTZ) and once a week (ATOM).

Crypto Earning vs. Savings Accounts: How To Hold Up To 17% Annually Digital Assets

People can also take advantage of the Crypto.com exchange, which offers customers up to 2% to 6.5% per annum (PA) for a variety of cryptocurrencies and up to 12% for holding certain stablecoins. Crypto.com users can choose an interest rate by choosing a term that can be either flexible, one month, or three months.

Flexible means that you can withdraw and use the cryptocurrencies at any time and receive 2% for supported crypto assets and 8% for stablecoins. A 30-day term at Crypto.com gives the person 4.5% for the average crypto asset, while stablecoins get up to 10%. The 90 day term is 6.5% for coins like ETH and BTC, and stablecoins like USDC can be up to 12%.

Crypto Earning vs. Savings Accounts: How To Hold Up To 17% Annually Digital AssetsThe San Francisco-based exchange Coinbase has started offering savings rewards for certain coins as well as staking rewards.

Coinbase and Crypto.com aren’t the only exchanges or custody solutions that offer interest-bearing accounts. Other interest-bearing products are offered by Blockfi, Linus, Outlet Finance, Gemini, Kraken, Youhodler, Coinloan, Nexo, and the Celsius Network. Everyone has different terms and interest rates, depending on the crypto asset they hold.

Most of these platforms offer higher percentages on stablecoins because fiat-backed crypto assets can bring higher returns for savers. Of course, depository solutions are coins that are held with a third party and those who choose to generate interest in this way should understand that the risk is greater. A depository platform could fake reserves, get hacked, or even ruin the business through bad business decisions. As the old saying goes, “not your keys, not your coins”, holding funds on an exchange means you trust them.

Use of proof-of-stake tokens, Ethereum 2.0 staking

People who want to generate passive income can also do so by using platforms without custody and staking concepts. Staking uses a Proof-of-Stake (PoS) crypto-asset and the person needs a staking wallet to perform this function (transaction validation) in order to receive a stake. Similar to a savings account, staking simply means holding the asset and receiving coins for the amount the user owns. The more tokens that are held when staking, the more interest the user gets.

Crypto Earning vs. Savings Accounts: How To Hold Up To 17% Annually Digital Assets

Currently, some people are stuck Ethereum (ETH) with the new ETH 2.0 staking feature. However, in order to earn ETH in this way without custody, the user needs a total of 32 ETH to participate. However, the person can earn anywhere from 5% to 17% PA. People can also use ETH negligently via exchanges such as Kraken and Coinbase. The Coinbase exchange in San Francisco offers “between 3-7.5% reward for every ETH you use”.

Crypto Earning vs. Savings Accounts: How To Hold Up To 17% Annually Digital Assets

Defi-Apps based on Ethereum, Bitcoin Cash, Polkadot and Tron

In addition, people who want high-yield returns on their crypto assets can use a decentralized financial application (Defi) in addition to staking. There are numerous defi apps like Compound, Aave, Nuo Network, Ddex and Dydx that can provide a person with a return by simply providing liquidity or lending. A good part of these defi-apps that are not stored nowadays also offer higher returns for stablecoins.

Crypto Earning vs. Savings Accounts: How To Hold Up To 17% Annually Digital AssetsDecentralized finance applications, also known as Defi, allow people to generate income without custody.

This type of apps allows people with numerous ERC20 tokens such as TUSD, LINK, DAI, ETH, WBTC and USDC to earn returns based on a time period. In addition, there are other blockchains moving in the direction of creating defi ecosystems, including networks like Tron, Bitcoin Cash, EOS, and Polkadot.

Crypto Earning vs. Savings Accounts: How To Hold Up To 17% Annually Digital Assets

An example in the BCH network is the Anyhedge protocol developed by the General Protocols team, a concept that enables people to use BCH with the detoken application that is not kept.

“The first product available on Detoken is the Anyhedge BCH-USD futures contract,” the team explained when the app was first launched. “This is a smart contract that allows users to secure or extend their BCH while earning a funding premium. In addition, the users retain control of their own money during the entire process. “

Let your money work for you

All of the above platforms and tools offer people a chance to make their money work for them. Individuals can make a return by doing something they likely did before they knew they could earn interest – just keep it. This decentralized form of liquidity will continue to grow as long as the demand for crypto assets remains strong.

As mass adoption continues to grow, liquidity and potential revenue can only get better over time. Once the mainstream embraces these massively higher interest rates instead of the tiny 0.35% to 0.60% banks, it won’t be long before they want to invest their funds in something that will attract real interest rates over time.

Tags in this story

Aave, APY, bank interest, banks, Blockfi, Coinbase, Compound, Crypto.com, custody, Ddex., Decentralized financing, DeFi, earn, earn, high returns, just mining, Kraken, non-custody, PA, passive income, PoS, proof -of-stake, savings accounts, staked, staked

What do you think of all of the platforms and services that enable people to earn passive income just by storing their crypto assets? Let us know what you think on this matter in the comments below.

Jamie Redman

Jamie Redman is the News Lead at Bitcoin.com News and a Florida-based financial tech journalist. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for bitcoin, open source code and decentralized applications. As of September 2015, Redman has written more than 5,000 articles for Bitcoin.com News on the disruptive protocols emerging today.

Photo credit: Shutterstock, Pixabay, Wiki Commons, Coinbase, Crypto.com, Ethereum, Bank Interest, Detoken, General Protocols,

Disclaimer of liability: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement for any product, service, or company. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author are directly or indirectly responsible for any damage or loss caused or allegedly caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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