As the world of crypto grows and evolves, there are different ways to earn rewards for holding, learning or interacting with decentralized finance (or DeFi) apps.
- Coinbase Earn
If available in your country, the easiest way to start generating crypto rewards is through Coinbase Earn. In exchange for learning the basics about certain cryptocurrencies, you can get some to try for yourself.
- Stake some of your crypto
Many currencies now use a “Proof of Stake” consensus mechanism — which is a way their decentralized networks can ensure that all transactions are verified and secured without a bank or payment processor in the middle.
With such cryptocurrencies, you can earn rewards simply for contributing to the security of the network — by “locking” some of your holdings into a staking pool for a certain timeframe. In exchange, you’ll earn rewards. This is an excellent option if you were planning to hold onto the crypto for a longer period — instead of having it sit idle, you can put it to work for you.
Some offer as much as 10% apy.
- Turn your dollars into stablecoins
One potential downside of staking rewards is that they’re paid in the native cryptocurrency, which can be volatile. But you can earn rewards simply by buying and holding dollar-pegged stablecoins like Dai and USD Coin (USDC).
In the current era of vanishingly small interest rates, it’s no longer possible to hold dollars in a traditional savings account and safely earn meaningful yield. But stablecoins have made a very similar proposition possible. A growing number of centralized finance (or CeFi) products have emerged that provide compelling yield for keeping some of your crypto holdings in stablecoin form.