What are Crypto Dividends?
“If you don't find a way to make money while you sleep, you will work until you die.” - Warren Buffett, multi-billionaire investor
Wise words from one of the wealthiest people in the world.
Note: "crypto dividends" is used throughout this article to describe "crypto rewards." Crypto dividends are NOT the same as stock dividends paid to shareholders of a company.
We define dividends as:
div·i·dend| ˈdivəˌdend |
noun
a benefit from an action or policy.
Crypto dividends or crypto rewards are crypto passive income that is earned for holding or staking a crypto asset. The amount received is often based on the amount of a crypto asset held and may require the holder to take an action such as staking or creating a transaction to claim rewards.
And now back to making crypto! :)
In the early days of crypto, you could make money a few different ways:
- Mining
- Investing
- Trading
While these methods have made some people rich, they are by no means ways to “make money while you sleep”. They can become full-time jobs.
But in recent years, crypto dividends has emerged as another way to make money with crypto. The key difference with crypto dividends is that it is crypto passive income. Sometimes it can be as simple as making a few clicks and making crypto while you sleep!
While you might not get Warren Buffett-rich, you might not have to work that exhausting 9-5 anymore 😉
To save you time, here are some of the best ways to make cryptocurrency dividends!
Tezos (XTZ): ~6% Yearly Interest
Tezos is a blockchain platform like Ethereum that’s known for having one of the biggest ICOs of all time. The platform focuses on solving governance issues characteristic of blockchains like Bitcoin and Ethereum, which don’t have formalized governance processes to make decisions on things like network upgrades.
This has led to splits, or forks, over disagreements about a blockchain’s development. A prominent example is Bitcoin vs. Bitcoin Cash.
Tezos, on the other hand, allows stakeholders to vote for network changes. Tezos itself records stakeholder votes on the Tezos blockchain. Moreover, the network automatically implements changes after they receive enough votes from stakeholders.
But due to the huge amount of money Tezos raised ($232 million), there was a lot of infighting within the Tezos team. This delayed the release of XTZ tokens and made many investors angry. Some even filed lawsuits.
Nevertheless, Tezos’ troubled times seem to be in the past. In May 2019, Tezos finally saw the implementation of its on-chain governance in action.
It’s not only governance that Tezos stakeholders get to take part in but staking rewards, too. Tezos pays stakeholders ~6% interest in XTZ a year (check MyTezosBaker for the latest rate). While not as high as protocols like Dai Savings Rate or Compound Finance, it’s still another great way to earn interest on crypto since Tezos is one of the more promising blockchain projects.
Here’s a quick guide on how to start earning Tezos.
Cosmos (ATOM): ~8% Yearly Interest
Cosmos is one of the most popular staking cryptos, up there with the likes of Tezos. The project aims to become an “Internet of blockchains” by connecting different blockchains. While there are thousands of crypto assets out there, there is no way to easily swap crypto assets between different blockchains.
So far, nearly 100 different companies are using Cosmos to build their own projects. One example is Binance, the world’s biggest centralized exchange. Binance built their blockchain, Binance Chain, using Cosmos’ technology.
Cosmos staking rewards are high at around 8%. But the rewards could become even more valuable with Cosmos’ ecosystem growing by the day.
More info:
Cosmos (ATOM) staking rewards calculator with latest interest rate
VeChain (VET): ~1.5% Yearly Interest
VeChain (VET) is another staking coin to consider. While the rewards aren’t high compared to other staking opportunities, the project, might make up for its low yield with its future potential.
VeChain focuses on using blockchain technology for the supply chain, or the process of moving products and services from suppliers to customers.
It's already announced a partnership with Penfolds, one of Australia’s oldest wineries, to track the authenticity of Penfolds wine and prevent counterfeiting.
Other notable accomplishments include VeChain’s work with BMW on VerifyCar, an application that deals with mileage fraud by recording car mileage on VeChain. Another is Deloitte, one of the Big Four accounting firms, announcing that it is using VeChain to develop blockchain solutions for its clients.
Luckily, if you want to take advantage of VeChain’s potential growth, VET staking is quite easy. Just hold VET in a wallet that supports VeChain and you will receive VTHO, which is used to pay for network transactions.
Compound Finance: ~1.8% Yearly Interest (Variable)
Compound Finance is like Maker in that it involves crypto borrowing and lending. It’s also another high-interest passive income crypto opportunity that doesn’t have to involve volatility.
With Compound Finance, you supply crypto, such as DAI, to a liquidity pool. Borrowers can then borrow from the liquidity pool. Some of the interest that borrowers pay on their loans comes back to you as passive income.
Yet, unlike DAI, you can earn interest on other crypto assets as well. As of writing, DAI pays the highest interest though. For example, DAI has paid as high as 8% interest recently on Compound.
See Compound Finance’s markets page for the most up to date list of supported assets and interest rates.
As with DSR:
- There is no minimum deposit (anything >0)
- You can withdraw your profits at any time without penalties
- And interest accrues about every 15 seconds - not monthly, quarterly, or yearly.
If you have DAI and want to earn interest on Compound Finance easily, check out the Exodus guide to using Compound Finance:
NEO (NEO): ~2% Yearly Interest
Another one of the increasingly many cryptos that pay dividends isNEO. While NEO doesn’t pay as high of a reward as some of the other passive income cryptocurrencies we’ve listed, it still beats many outdated financial system opportunities by a long shot.
Also, NEO is called the Chinese Ethereum due to its origins and strong ties to the world’s most populous nation.
For example, Onchain, NEO's parent company, worked with Alibaba on blockchain email solutions. Big Four accounting firm KPMG also named Onchain a top 50 Chinese Fintech company. It's even rumored that Chinese government officials contacted Da Hongfei, the Founder and CEO of Onchain, for guidance before China decided to ban ICOs and cryptocurrency exchanges in 2017.
Therefore, while NEO might not be as lucrative percentage-wise as some of the other opportunities we’ve listed, NEO coins themselves might be more valuable down the line. In other words, instead of merely investing in a passive income opportunity, investing in the NEO dividend opportunity might be more about investing in the future of NEO itself.
Another thing to note is that NEO pays in GAS, which is what NEO users pay to execute NEO smart contracts.
Tron (TRX): ~4% Yearly Interest
Tron (TRX) is another candidate for the best passive income cryptocurrency. Tron's founder, Justin Sun, is a controversial figure due to his tendency to over-hype Tron.
Yet, Sun’s claims aren’t just hyperbole anymore. Tron has recently shown its potential with:
- The growth in the Tron Dapps ecosystem
- Tron's purchase of BitTorrent (perhaps the largest decentralized protocol in the world, accounting for nearly 30% of all Internet traffic)
- Sun’s partial ownership of Poloniex (an early crypto exchange)
- and Tron’s purchase of Steemit (the biggest blockchain social network).
Love or hate Tron and Sun, Tron’s influence only continues to grow. Earning TRX passive income might be a great way to benefit from that.
To get started, Poloniex offers a way to stake your TRX. Though do note that keeping your TRX on a centralized exchange means you’re trusting someone else to keep your crypto safe. Historically, that hasn’t been a wise decision. In fact, hackers have hacked Poloniex in the past.
For the latest TRX staking rewards, check Staking Rewards’ Tron calculator.
DAI Savings Rate (DSR): Up to 8% or Higher Yearly Interest (Variable)
Dai Savings Rate (DSR) is one of the best ways to make crypto dividends. This is because DAI is a stablecoin designed to mirror the value of the US dollar (1 DAI = $1) which is great if you want a crypto income that is more stable and less affected by crypto's wild price swings.
This is great if you want crypto income that is more stable and less affected by crypto's wild price swings. Moreover, the project behind DAI, Maker, is one of the more established projects in crypto. Maker has over half a billion US dollars locked in its smart contracts.
Maker accepts crypto, such as Ethereum, from borrowers. These borrowers then receive DAI as a loan while their ETH remains locked up in Maker’s smart contracts. The interest borrowers pay to borrow DAI gets redistributed to DAI holders like you in the form of DSR.
With just a few clicks on Oasis, Maker’s app for saving, borrowing, and trading, you can earn up to 8% yearly interest or higher on dollar-denominated cryptocurrency (variable - can change). For comparison, that’s nearly 114 times more than the average US savings account interest rate (0.07%)!
It gets better:
- There is no minimum deposit (anything >0 DAI works)
- You can withdraw your profits at any time without penalties
- And interest accrues about every 15 seconds - not monthly, quarterly, or yearly.
The DSR does change from time to time. For the latest DSR, check the Oasis app.
Ontology (ONT): ~3.5% Yearly Interest
Ontology coin (ONT) is the cryptocurrency that powers Ontology. Ontology focuses on identity security and data integrity (accurate and consistent data). Thus, Ontology caters towards businesses who can take advantage of blockchain benefits like smart contracts while retaining control of sensitive data.
Moreover, businesses can build their own blockchains - each with their own rules and specifications - on top of Ontology’s blockchain. Therefore, businesses get to benefit from blockchain in a way that makes sense to them while also choosing what data they share with the main public Ontology blockchain.
The team behind Ontology is the same team behind NEO (Onchain). Onchain not only developed NEO but is very influential in China.
As with NEO, earning passive Ontology income can be very easy:
Note:
Due to recent changes in the Ontology network rules, staking Ontology (ONT) and generating new Ontology Gas (ONG) rewards is currently not possible inside Exodus.
Due to these changes, new Ontology Gas (ONG) rewards are no longer being generated. Though you can continue to claim your existing Ontology Gas (ONG) rewards.
Our team is working to release a patch for this change.
Follow our progress on our status page or write to us at support@exodus.io if you have any further questions.
Ontology pays about 3% annual ONG rewards, but check ONTCalc for the latest estimates.
DASH (DASH): ~6.5% Yearly Interest
Dash is another passive income crypto that focuses on quick and private transactions. Its push for mass adoption has paid off. You canspend Dash at nearly 5,000 merchants and services as of the end of 2019.
Dash also popularized masternodes, which are like the miners who confirm transactions on networks like Bitcoin. But mining can need lots of technical knowledge to operate mining equipment. Dash only requires some Dash coins to be locked up as collateral to run a masternode.
If you run a Dash masternode, you provide Dash services like instant transactions, private transactions, and governance. For your contributions, the network pays you in Dash at a rate of ~6.5% a year (check Staking Rewards for the latest rate).
Conclusion
The move towards crypto dividends opportunities, such as staking, only continues to grow. For example, another potential opportunity we didn’t mention but are keeping our eye on is Ethereum’s much anticipated transition to proof of stake.
With all these opportunities, remember to store your hard-earned - ok maybe not hard-earned but still valuable - cryptocurrency passive income in a wallet where you control your private keys. Otherwise, they could disappear just as easily as you earned them!
