The traditional approach on making money on cryptocurrencies includes crypto trading and crypto mining. In this article, we’ll talk about other ways to earn with the digital money.
Special roles of master nodes
Master nodes are part of the infrastructure that sustains cryptocurrencies. Master nodes do not add new blocks of transactions to the blockchain, but they verify new blocks of transactions in a cryptocurrency. A masternode is a crypto wallet with advanced functionality that stores the full version of the blockchain and synchronizes operations on the network in real time.
Master nodes operate on a collateral-based system. In other words, the operators need to own a significant amount of the cryptocurrency. In return for time and money, operators of master nodes are rewarded with guaranteed crypto earnings.
Among famous networks with the usage of master node system is the Dash cryptocurrency. In order to run a master node on the Dash network, the owner needs to have 1,000 Dash in your wallet. What master node owners receive is 45% transaction fees, which are proportional to the deposit amount. The operation of master nodes does not require large computing power and the creation of mining farms.
Crypto lending
Crypto assets can be transferred to third parties at a percentage, which is lending. Crypto owners can transfer digital money to crypto exchanges to provide liquidity, or to other crypto investors. The transferred funds are blocked in the smart contract.
To take the Binance exchange as an example, there are two types of lending: a perpetual contract and a fixed contract. The first one has a low interest rate, but funds from such a contract can be withdrawn or added at any time. At the same time, a fixed contract is usually set for a certain period of time, has a higher interest rate and funds from such type of a contract cannot be withdrawn until its expiration date.
Binance users have the option to invest cryptocurrency in a perpetual contract using USDT stable coins. The interest rate on such a deposit will be 7% per year. A higher interest rate is 12% per year for the perpetual contract of the CAKE token.
To compare, a fixed contract of the Axie Infinity token offers 25% per year. However, the funds invested in the contract will not be available for 7 days. The lending platform Celsius provides a fixed contract on Ethereum at 5.3%.
Fan tokens
Fan tokens, or the other name is sports cryptocurrencies, are digital assets that enable sports teams, associations and players to strengthen fan engagement. It is especially helpful for teams to remain connected with fans who live in a different geography. Various sports organizations issue their own tokens that give fans access to unique content.
The Socios.com platform reveals a large number of such tokens. It offers tokens of the football clubs Milan, PSG, Juventus, Barcelona, Manchester United and the promotion of mixed martial arts UFC. These tokens are a form of cryptocurrency. But as opposed to virtual currencies, fan tokens require making use of blockchain technology from a third party.
Typically, the value of such tokens increases significantly against the backdrop of positive events taking place in sports organizations. These tokens make fans more than just spectators. With the help of a fan token, a passive fan becomes an investing fan. He or she can also gain from the financial upside of the team concerned.
The crypto market is extremely volatile and it’s always venturous to make investments into this sphere. At the same, these assets are slowly becoming a part of our modern culture.