How to earn passive income from your bathtub
I experimented with over 10 crypto strategies, so you don't have to.
Ah yes. It’s what we all dream of, making money in our sleep. Or lying in our tub. Turns out crypto offers many avenues for passive income. This is a guide for friends and beginners to help them get started.
*** But first, a warning:***
1) Crypto is risky. Don’t put in what you can’t afford to lose. And this goes without saying, but this isn’t financial advice.
2) There are many scams out there. Be very careful connecting your wallet to ANYTHING. Always double check URL and sources. There are LOTS of scammers out there. If you have questions, message me twitter @danrobhawkins
OK, with that out of the way, let’s get in to it.
I’ve rounded up about 10 or so ways to earn income in the cryptoverse that I’ve tried personally. And I’ve given them a loose score based on 1) ROI ‘return on investment’, based on capital needed to get started and gains over time and 2) difficulty, based on things like time, effort, knowledge, technical know-how, etc. I ranked this as either: Easy, Moderate, Annoying, Hard.
Overall my score is quite subjective, and reflects my experience.
Note: I was going to put a category based on “Risk”, but this is all very risk and speculative. Again, be prepared to lose everything: )
Here’s an overview of what’s below:
iii. Yield Farming
Mining (Bitcoin, Helium, etc.)
No Lose Lottery
Play to Earn Games
Earn to Learn (and watch)
1. Interest %
This is probably the simplest way to earn income. I’ve broken this down into three different ways that are all quite similar: staking, lending, and yield farming.
First, a little background on Proof of Stake (Pos). If you want to skip the details and just see how you can earn, you can scroll down to How to Stake.
PoS cryptocurrencies use a slightly different approach to ‘mining’ coins compared to Proof-of-Work (PoW) crypto-coins like Bitcoin. In both, validators (e.g. people, or more like machines, who verify the transactions on the chain) of the blockchain earn rewards as native tokens for verifying new blocks and securing the network. In PoS it’s called “forging” or “minting” new coins. In both instances, people join or run pools, to increase their chances and share the reward.
But with PoW, there’s a lot of wasted computational power. While everyone competes, only one person wins. It’s a rat race. PoS was created to reduce this waste, and instead chooses a validator at random (through a lottery system).
Though, it’s not exactly random. The more coins you have “staked” the higher the chance you have for being chosen. And if these validators approve a fraudulent transaction, they lose a portion of their staked coins. It’s a clever way to incentivize validators, because they… well, they have something at stake.
And when validators approve an accurate transaction, that pool is rewarded with tokens. So, if you stake to a pool (called “delegating”) or run your own staking pool (a bit more complicated), you’re essentially ‘mining’ for coins.
How to Stake
Staking, for the purpose here, is a way to earn interest on coins you hold. In most cases, you can earn about 5 to 10% APY (annual percent yield) on your coins through staking.
A great resource to find out what coins and how much you can earn is stakingrewards.com. You can also see what coins you can earn interest on through lending and providing liquidity.
You’ll have to do some research on what pools to delegate to. And for each coin, there are many things to consider.
Added bonus, interest is paid out every epoch (roughly every 3 to 4 days) for quicker compound growth.
In crypto, you typically earn interest rewards in the form of the token you're staking, not fiat. And there’s always risk. So make sure to choose coins that you believe will grow in value (and not just pick the highest APY!)
You can stake with almost any amount. And with APYs around 5 to 15%, it’s quite lucrative.
Figuring out what pools can take some work. But once you’re set up, you can just leave it for good.
Overall Score: 9/10
I’m staking pretty much every coin I own. It’s a no-brainer in my opinion.
An easier path to earn interest on your coins, for the less crypto-savvy, would be to use centralized exchanges and platforms, like Binance and Blockfi.
Binance, for example, has many ways to earn interest on your coins. Check out this 10 Ways to earn Passive Income on Binance video tutorial for more.
Most tokens you can lend and earn interest on. You can find the best rates at digitaldoji.com
I personally use platforms like BlockFi, Celsius and Crypto.com to earn interest on BTC, ETH, LINK and stablecoins like TCAD and USDT. I like to split it up between these platforms, to avoid having all my eggs in one basket; to minimize my risks (e.g. a hacked account or leaked keys). But I also do this because their interest rates keep fluctuating, and I figure I’ll just average the gains. Plus, it’ll cost you gas to move your coins from one platform to another, so I tend to set it and forget it.
You can also earn high interest on stable coins, of about 9 to 12% APY on these platforms. And yeah, I know, it sounds too good to be true. 12% interest!? What’s the catch? I don’t really fully understand how it works - though Packy from Not Boring gets into it here. It’s over my head, but just be cautious. There is always some risk involved. Also, most people would recommend you keep ALL your crypto safe on a cold wallet (offline). So be cautious.
You can click the links for my referral codes -- we both get $ when you sign up.
I should also mention there are more involved ways of lending crypto assets. If you’re a bit more savvy, check out DeFi tools like Aave, Yearn, and Curve, and Compound.
There is added risk. And a bit of know-how. So I haven’t messed around with these platforms… yet.
I don’t believe there’s a minimum amount you need to get started with. Easy ~10%. But risky.
If you’re keeping your coins on something like Blockfi or Celisus, this is very straight forward. Set it and forget it.
Overall Score: 9/10
Great for coins like Bitcoin and Ethereum.
iii. Yield Farming & Providing Liquidity
Yield farming is yet another way to earn rewards on your coins, which acts similar to how banks lend assets for interest. But this time you’re the bank. Typically it involves lending your pair of coins to liquidity pools on Dex’s (or decentralized exchanges), like Uniswap, for people trading those coins. So in this case you act like a market maker.
Personally, I don’t mess around with this too much (because of the high risk). But I do provide some pairings (like BNB, CAKE, & DOGE) on PancakeSwap and BunnySwap. Currently, I’m earning ~54% APY. I’ve seen some rates as high as 225%.
Yeah, there are some pretty crazy APYs, but again, just be careful! And like any good farmer, you have to stay on top of your crops. Many ‘farmers’ will cycle through LPs, looking for the best places to ‘farm’, aka find the highest APY yields. And if you don't have a green thumb, there are even tools like Don-key which have almost gamified the experience, where for a small fee, you can automatically hitch your wagon to the best farmers out there.
If you’re still totally confused, check out this video to learn more about how Liquidity Pools work.
Minimum for most coins is likely ~$50. And you can earn very great APYs, like 20 to 50%. But comes with risk.
There’s a few more hoops involved than compared to Staking and Lending. You’ll also want to rotate your crops. So a little less passive.
Overall Score: 8/10
I want to give this a higher rating, but I just haven’t experimented enough, and I got burned on a BNB farm. So I’m quite tentative with yield farming.
2. Affiliated Marketing
Anyone creating and sharing content in the cryptoverse can shill crypto products and referral codes to their audience. So if you’ve got a lot of followers, you can make decent coin. Some Youtubers make thousands of dollars a month this way.
If you’re looking for free money, here’s some more shameless referral codes for my three favourite platforms for buying basic cryptocurrencies like BTC and ETH :
As far as I know, this is the cheapest way to buy BTC and ETH (i.e. lowest fees). But, if you’re looking to send BTC to other places, ShakePay may make more sense. Referral: Code to get $
I use ShakePay to buy BTC and ETH. It’s one of the cheapest ways to buy BTC in Canada. And plus you can shake every day and earn BTC. Referral: Code we both get $
I use this sometimes to buy BTC and ETH and a few others. I’ve heard the spreads are lower. But I just prefer ShakePay. Referral: Code for free $25
My main exchange platform for buying and trading cryptos. Referral: Code to get free $
By the way, I recently did a comparison of ShakePay, Newton and Netcoins. They all are good for different reasons. ShakePay makes the most sense if you are going to buy smaller amounts, and send to other exchanges or wallets. Netcoins was the cheapest to buy, but had large gas fees. Newton was somewhere in the middle, but it also offers a lot more coins than the other two.
Overall, I like ShakePay. Plus, you can shake the app every day and earn free shitoshis. Heck, almost passive!
Don’t need any capital. But, I suppose you need an account.
Literally just need to post your links on your content. But you need to have an audience. So that’ll take effort.
Overall Score: 8/10
Great if you have a large following. I’m not quite there yet ;) But still, very easy and passive way to earn income with no risk.
As mentioned, you can mine Proof-of-Work (PoW) coins like Bitcoin and Ethereum (before it changes over to PoS, coming soon!). Even if you were born under or in a rock cave, you’re probably already aware of mining. So I won't get into it here. Typically, you can earn anywhere from $5 to $20 a day, depending on your rig and what PoW tokens your mining. But of course, you need some upfront cash for equipment. Apparently the juice is still worth the squeeze in 2021.
You can also ‘mine’ for other tokens besides PoW coins, including Helium which uses Proof of Coverage (PoC) to verify the blockchain. Helium is a decentralized blockchain network that provides wireless coverage to the public. Essentially you can ‘lend’ your excess WiFi to the network and earn Helium tokens as a reward.
Helium aims to connect devices, like IoTs devices using their network and hotspots that community miners provide. And some miners are earning up to $1000 a day!
But do some research before you race into buying a Helium miner. Not all hotspots earn the same rewards; you’ll need to make sure your location is profitable first (e.g. in an urban centre with good radio-wave range). There are many good guides and tools to help you determine how good your spot is.
And also beware on which miner you buy. I ordered my miner, Nebra, back in February 2021 for about $500, and it arrived about 6 months later.
Note: You can also run nodes on the Lightning Network (Bitcoin’s layer two solution) to earn rewards. I haven’t done this, and don’t know much about it, but it sounds very similar to Bitcoin mining. So I’m skipping over this one.
Oh and Cloud Mining. You give them $, and you receive mining rewards. All I know is there are tons of scams. I haven’t messed around with it.
I’m basing this off Helium miners (I’m not up to speed on other PoW coins), but you can get started with about $500, and hopefully earn about $10 to $20 a day (e.g. pay off your investment in about 50 days).
Effort: hard, (Nebra experience has been annoying)
Make take some time doing research and getting your rig set up.
Overall Score: 9/10
Could be the most profitable, if done correctly.
4. No loser Lottery
“You miss 100% of the shots you don't take – Wayne Gretzky – Michael Scott - Dan Hawkins”
Same goes with the lottery.
Not sure if winning the lotto classifies as passive income, but Pool Together just may count. It’s a lottery-like protocol where there are weekly winners, but no losers. How the heck? The lottery prize is generated by the interest gained of those who hold their tokens with PoolTogether. So you can play the lottery as long as you hold your coins there. The only cost to you is an opportunity cost with your tokens… and say, earning your own interest*.
(*Come to think of it, this is very similar to running a validator node on PoS).
You can “play” to win a bunch of different tokens, including Ethereum and stable coins like DAI.
For DAI, odds of winning, per $5 are about one in a million, every week, for a chance to win ~$20,000 (on average). I staked 200 DAI, but it appears you have to re-stake each time… and on the Ethereum network it’ll cost you eth gas. So I’ve switched to a BNB lotto, using the BSC network instead.
Pretty similar to staking, in my opinion. But just higher risk, higher reward. Again, you don’t have to pay anything for a lottery ticket. And there aren’t losers. You get your money back.
Pretty easy to get set up. Just need a MetaMask wallet.
Overall Score: 6/10
Fun to have a little money in here, but I’d just stick with staking for guaranteed interest. And maybe I’d give this a higher ranking if I won!
5. Renting NFTs
Yes, those right click save jpegs. You can rent them out. For money.
Many NFTs come with community and utility. With your NFT, you can gain access to content or events (where your NFT acts as an entry ticket). But you can also lend your NFT to others for periods of time to give them this access to things in meat space.
You can also lend your virtual goods in the metaverse too. For example, you can lend your rare ember sword to someone who may need a winning edge in battle. Personally, I’m not there yet. But something I’d like to explore.
Similarly, you can also rent your land in virtual spaces in Decentraland. For example, a shop keeper may pay to set up shop on your land if it’s a high traffic area.
Many people also lend NFT characters to other gamers. I’m currently lending three Axie characters, and have a scholar playing Axie Infinity - a play to earn game. (coming up next!)
There’s more to this world I don’t know yet. So I’m going to skip giving this a ranking.
6. Play to Earn Games
There’s a lot of video games out there that gamers actually earn money while playing. Here’s a list. But I’m only familiar with Axie Infinity and Zed Run. So I’ll talk about those two. (I’m also very excited about Star Atlas, and will be buying some NFTs soon).
In many games, you can earn tokens by playing (like playing PvP, or completing quests, etc.) or by breeding your NFT characters.
Here’s a quick overview, for Axie Infinity and Zed Run. I’m feeling lazy so it’s in bullet form.
On average, full time players can earn up to $500 or $1000 a month just for playing the game. Not a lot in most countries, but in the Philippines ( where most of the players are based) that's not bad money.
Don’t have time to play? You can sponsor someone through a scholarship, and earn from their victories.
In Axie Infinity, you can rent your NFT characters to scholars who play your Axies for you. Why would someone pay you to play with your Axies? They’re expensive. Each Axie costs about $200 to $300. And you need 3 to play.
Players (scholars) can earn ~150 SLP tokens a day by battling other players. SLP trades for ~10 cents at the time of writing this. So they can earn about $15 a day. Typically, most people give their scholar about 60 to 70% of the income (SLP tokens), and keep 40 to 30%.
SLP tokens are used you breed your Axis - and you can breed and sell your Axie NFTs on the open market.
With Axie Infinity, you collect SLP tokens as rewards, which you can then use to breed your Axies, which you can then sell to other players.
ZedRun (which you remember from our last post), lets you race and bet on digital horse races. But, you can also breed new horses. And how well horses perform depends on their bloodline. So, if you own a good purebred with strong DNA, other players will pay you to have sex with your with your horse. Yup.
How does breeding in Zed Run work?
You can breed male horses three times a month, and a female once a month. If you want to breed your female horse, you have to pay fees to the male horse owner. But female horses keep the offspring ( a new horse NFT you can sell). Some breeders are raking in about 1 ETH per month.
And I’ve seen horses earn up to 85% ROI for racing, or about a couple ETH a month. Seems that average ROI for a decent horse is about 10 to 25% ROI. Check out this for some Horse Racing stats.
If you don’t feel comfortable pimping horses, there are other games to explore for breeding.
I’ve only tested out Axie Infinity scholarship program. So far, I’m earning about $5 a day, so it’ll take me about 150 days to get my investment back. I plan on using my SLP to breed more tokens, and get more scholars.
I’m also paying my scholar in SLP to run an Instagram account for me. Fudge Jerry. It’s a Retribution account designed to repost FuckJerry posts - the joke thief. Check it out and please unfollow @FuckJerry if you’re following him.
Effort: annoying, kinda hard
Takes some effort setting up a Ronin account, finding a scholar, managing them, and researching strategies for good Axies. Tip: get your scholar to pick your axies for you.
Overall Score: 10/10
This is personally my favourite passive income for crypto. I like the fact that I’m helping someone earn money, and I like the relationship part of it.
7. Earn to watch | Earn to learn
I’m only really familiar with the Basic Attention Token (BAT) for passive income here.
With the Brave browser, you can earn BAT, just for using a browser and searching the web. Added bonus, it’s faster and more private than Chrome, while still maintaining chrome extension support.
You don’t need any capital to get started. Just your eyeballs.
It’s quite passive. Takes only a few minutes to set up. Though, I think I prefer using Chrome. Haha.
Overall Score: 7/10
TLDR: it’s not really worth it. Only have earned like 4 or 5 BAT over a few months (about $4/month). But why not get free money? And I could be using Brave more often to receive even more BAT.
8. Yet even more ways
That pretty much sums up all things I’ve dabbled in. I’ve come across some other ways to earn passive income that I’ve listed below.
Note: I haven’t tried these (except for a few airdrops here and there for projects I really like), so I can’t really offer any advice.
One last thing. Just be careful out there. Always double check URLs, and be wary of strangers online.
Good luck. Stay Safe. See you on the moon.
Communities are giving away free tokens all the time. Check the latest here.
ii. Cash back rewards.
With some credit cards, you can earn about 1 to 2% cash back rewards in BTC and other coins. I’m on the waitlist for my BlockFi credit card.
Make good posts on Reddit, receive moon coins.
iv. Renting your bandwidth.
Here’s a guide for lending out your bandwidth.
A way to earn tokens for completing small tasks. Check out this guide.
I’m curious to know your experience with any of these methods. Who knows, maybe they’re not worth your time!