Currently, it is a widespread notion that the only way to make money in the crypto sphere is through day trading. Nonetheless, this could not be further from the truth. There are dozens of other new skillful ways of making money in the cryptocurrency space for those in the know, such as cloud mining, leveraging and via masternodes. One of the best amongst these is by investing in altcoins that pay dividends.
What are crypto dividends?
From a basic point of view, a dividend is the distribution of profits from a company’s income. The revenue is usually shared among corporate stakeholders and its mode of distribution managed by a board of directors. Dividends can be issued in form of cash, shares of stock or other assets that the shareholders agree upon.
In the modern age of cryptocurrency, traders have access to a whole new class of dividends from some of the best digital currencies and exchanges that offer payments in various forms.
Various methods of earning dividends in crypto
There are two major ways in which you can earn dividends in the crypto industry. Nonetheless, the specific method differs from one digital coin to the next considering they all run on different algorithms, rules and regulations.
The two major ways that pay dividends are:
Staking entails holding proof-of-stake(PoS) coins in a supported crypto exchange or in a special wallet thereby becoming an investor in the digital asset. This method will have a compounding effect on your deposit since you will be eligible for periodic payouts (crypto dividends) from the company.
Essentially, the tokens you stake function as security that protects the crypto’s environment the same way a Bitcoin miner’s electricity and equipment work to secure Bitcoin’s ecosystem.
Normally, there will be a maturity period where you will need to stake your tokens before you can start earning dividends. Some may take a few hours long while some may take up to a month.
Holding entails buying and storing crypto in a wallet of your choice. Investors do so with the hope of being rewarded according to the revenue earned from fees charged to traders using the platform.
In the old days, a bank savings account could pay over a 5% annual interest for simply banking with them. In such an arrangement, you are letting the bank invest using your money and you receive a small portion of what they make in terms of dividends.
Nonetheless, bank rates are not enticing anymore and people are turning to cryptocurrencies which provide bigger payouts than traditional banks thanks to their highly volatile nature.
The following are some of the altcoins that pay dividends. Note that this is not an exhaustive list.
Popular Altcoins That Pay Dividends
Neo, formerly known as Antshares and Antcouin is a smart contract token similar to Ethereum with headquarters in China. The platform allows you to “stake” your NEO tokens in order to receive dividends in a different asset called NeoGAS.
NeoGas is only available from a handful of wallets. Therefore, you must ensure that the platform on which you stake your NEO supports GAS payouts. For every NEO you stake, you get 0.0003 NeoGAS per day. You can choose to get a daily or monthly payout.
VeChain is a smart contracts platform that employs a similar model to NEO and Ethereum. The major difference is in the method of sharing profits. While NEO pays in form of GAS, VeChains distributes dividends in form of VTHOR.
VeChain pays out 0.00042 VTHOR tokens per day for staking 1 VET. The dividends are shared either on a monthly basis or every second.
Private Instant Verified Transactions (PIVX)
PIVX has made its name as one of the most prestigious new coins in the market due to its bespoke algorithm which allows users to be totally anonymous. PIVX was established in 2016 as a fork of Dash and runs on a Proof of Stake protocol which allows users to stake their tokens, thus improving the security of the whole platform. As a reward, PIVX pays a 4.8% annual dividend.
Although lucrative, earning dividends from PIVX comes with the disadvantage that you have to be online 24/7. However, you can solve this by cloud staking.
Komodo is a well-performing token that works on a proof of work model, allowing businesses to create their own blockchain networks. To be eligible for Komodo dividends, investors must stake at least 10KMD in their wallets.
Unlike PIVX and other similar POS cryptos, you do not have to be online all the time to receive the payouts. This feature makes KMD more attractive compared to other staking services. They pay an annual dividend of 5.1% on a monthly basis.
BitMax is a cryptocurrency exchange with headquarters in Singapore that was established in 2018. The company shares a whopping 80% of its net transaction revenues with its investors making it one of the most sought after altcoins that pay dividends. At the time of writing, the APR for investors is between 35-50%, which surpasses most savings account and other similar tokens by far.
BitMax distributes dividends on a daily basis depending on the amount of tokens an investor holds.
Kucoin is a Hong Kong-based exchange that is known for being one of the pioneers of the dividends exchange model token. The company was formed back in 2017.
The exchange distributes 50% of the transaction fees on the platform with its token holders sharing in terms of dividends. Thanks to the method in which the payouts are calculated, investors are poised to reap huge benefits if the trading volumes and users of the exchange increase. This is almost a certainty as cryptocurrency becomes more commonplace and attracts more traders.
To benefit from Kucoin’s dividend payments, you need to hold a minimum of 6 Kucoin tokens and leave them on the platform. The dividends are shared on a daily basis and according to the number of Kucoin tokens you have in your wallet.
Coss is a decentralized ER20 cryptocurrency token that has seen massive growth since its inception. The exchange shares 50% of its trading fees with its investors. It is similar to Kucoin with the main difference being how the mode of distributing dividends.
In the Coss.io platform, you receive dividends according to how the fees were paid. For instance, if some users paid the platform’s fees in BTC and others n ETH, you will receive your payments in these currencies.
The dividends are paid on a weekly basis and are dependent on how many Coss tokens you have in your wallet.
Bibox is a relatively new cryptocurrency based in China that is already making waves in the market after surpassing the 1-billon-trades-in-a-day mark. It is also among the altcoins that pay dividends in form of Ethereum on a weekly basis.
For you to qualify for a payout, you must purchase and store 500 BIX tokens on the platform and then every Friday, you will receive your portion just in time for the weekend.
Pundi X (NXPS)
Pundi X is a new and exciting cryptocurrency project that comes with a lot of potentials to transform the industry thanks to their unique XPOS device.
Investors can earn dividends on a monthly basis as calculated by their unique algorithm and also based on the amount of tokens in the wallet.
However, the firm is expected to make payouts until the end of 2020 after which distribution will cease.
Reddcoin is a ‘social’ cryptocurrency that was formed in 2014. It allows Twitter and Reddit users to tip content creators using digital tokens to show appreciation for the content. Investors with RDD in their wallets can start earning rewards after just eight hours of holding the tokens.
The payments vary based on how many coins you hold and also how long they have been in the wallet. Note that there is an ideal amount of time you can hold your tokens to maximize your rewards.
Under ideal conditions, Reddcoin allows its holders to receive up to 5% dividends per annum. The payouts are calculated using Reddcoin’s PoS consensus algorithm.
Diversifying your cryptocurrency portfolio is a smart and effective way of growing your investments in any market. The magic of earning crypto dividends lies in the fact that you are making passive income. Furthermore, tokens can increase in value dramatically over a short period; hence even small gains can become significant quickly.
Staking and holding are just some of the ways you can take advantage of the rise in crypto. There are many other ways of diversifying and growing your portfolio of digital assets. To be on the safe side, ensure that the tokens used to pay rewards are valuable enough for your investment since some platforms pay using a different token from the one you are staking.
Note that there are many other currencies and exchanges that offer lucrative deals that did not make this list.