“Money that comes in every month whether you show up or not,” says Steve Fisher, author of Residual Millionaire. You no longer be compensated just for your work, but for the efforts of hundreds or thousands of people and on the efforts.

It is money that “comes in every month regardless of whether you show up or not,” according to Steve Fisher, author of Residual Millionaire. It’s when you no longer get rewarded just for your work, but also for the efforts of hundreds or even thousands of people and your own money. To achieve financial and time independence, it’s essential.”

Crypto passive income has been around for a long time. People were already making money from conventional passive income sources like affiliate marketing, stock investments, dropship, Amazon FBA, and many more before the bitcoin sector went into overdrive. Mining, staking, hosting master nodes, and more lately yield farming and liquidity mining are the most common passive revenue streams in the cryptocurrency field.

Mining became the first means of generating passive revenue from cryptocurrencies after the introduction of Bitcoin. Computational resources are put to use to safeguard a network and verify transactions as part of the crypto mining process. To mine Bitcoin nowadays, miners have shifted from graphics processing units to Application-Specific Integrated Circuits (ASICs) because of a rise in hash rate (ASICs).

However, despite the fact that Bitcoin mining remains lucrative, the field is currently controlled by large businesses with substantial financial resources. Bitcoin miners made more than $1.5 billion in income in March 2021, with mining revenue reaching a daily high of more than $52 million.

Staking is a less resource-intensive alternative to Bitcoin mining that is becoming more popular. It often entails depositing dollars into a wallet and then executing certain tasks in order to gain rewards. Ahead of Ethereum’s shift to a Proof-of-Stake network, the Beacon staking contract is now the most valuable Proof-of-Stake coin in terms of market value, outpacing the competition. A total of more than 4.5 million ETH has also been bet on the contract so far. This amounts to almost $18 billion at current market levels.

Markets have shifted away from mining and staked in recent years, focusing instead on yield farming and financing. This transition was spurred by the DeFi boom that is expected to occur in 2020.

Overall, the fundamental premise remains the same: make your cryptocurrencies operate even when you’re not around to supervise them.

1.       How sustainable are passive income blockchains?

Proof-of there are a number of blockchains that allow for passive income and stake blockchains are among the most popular. As a result, they also convey the story of how unsustainable the paradigm might be. Those platforms that provide large staking returns have little problem attracting new users eager to see their money grow by two or thrice in a short period of time. However, it’s difficult to see how these networks can continue to make money for lengthy periods of time.

Many of these projects don’t provide any more functionality beyond staking, thus the circulating supply soon dilutes everyone’s holdings. To assume that staking is the major use case of these blockchains, one is forced to wonder what else they may be used for.

For blockchains that give passive revenue in the form of staking or mining, additional goods and services must be provided to remain lucrative, relevant, and sustainable.

PSI is among a few blockchain initiatives that have realized this fundamental issue. An interesting new notion in passive income has been introduced by the blockchain. First, PSI promotes the long-term viability of passive income via a variety of economic endeavors. Decentralized financial passive income may be generated via tokenization. PSI’s main goal is to make current passive income models more accessible and inexpensive to everyone, which is at the heart of its solution.

Cryptocurrency passive income is centered on Uniswap, another initiative. One ERC-20 token may be traded for another straight from a web3 wallet on the Uniswap decentralized exchange (DEX). Because Uniswap is a decentralized exchange, rather than a centralized exchange like Binance, the swaps are enabled by liquidity providers. When a person has extra money sitting around, they may utilize it to make money by becoming a liquidity provider on the Uniswap platform.

Yearn Finance is another blockchain project that deserves to be mentioned, despite the fact that numerous other blockchain initiatives have differentiated themselves in the passive income niche. The yield aggregator and the DeFi ecosystem work together to optimize yields for platform users. Years Finance has an intriguing feature in that it lets customers choose the DeFi protocol that provides the greatest annual percentage yield (APY) according to their risk tolerance. The yPool function allows users to earn loan fees from both Yearn and Curve by participating in lending pools.

2.       Passive income blockchains are still very much alive

It’s like a hydra when it comes to bitcoin passive income. There are a number of others ready to step in if one goes down. The niche, in truth, may never go out of vogue.

As an example, the total market value of all PoS coins presently stands at roughly $12.6 billion. Staking wallets own almost $8 billion of this total. This shows that a large number of cryptocurrency users are still actively participating in the market. You may be certain that if any of these ventures fail to make a profit, there will be ten more ready to take their place.

3.     The real solution

The actual issue is not with staking or any other passive income methods, but rather with the underlying economics of cryptocurrency. There is an issue with relying just on one source of income. That being said, a project that relies only on transaction fees to generate revenue is doomed to fail.

Transaction fees and the “holding-to-earn” notion are not enough for passive-income blockchains. They should begin by “building.” Having a minimal viable product, a robust community, progressive alliances, and a broad ecosystem of network members are all necessary to achieve this goal.