Web3 is the newest iteration of the internet in the market. Also known as the decentralised web that utilises blockchain technology, the Web3 is the third version of the internet launched as an improved form of the current Web2 we are more familiar with.
With Web2, internet users can interact with each other and consume content through networking services. While this has encouraged a more social and interactive opportunity, there are its downsides too.
For one, with millions of users on the internet, an abundance of personal data and content can be collected, creating privacy issues relating to personal and even financial or business data.
As such, the launch of Web3 aims to mitigate such issues due to its decentralised nature, where users would have more control over their data. The third version of the internet is built on blockchain technology.
As its name suggests, Blockchain technology is a digital ledger of transactions that is distributed across the entire peer-to-peer (P2P) network. Confused? Well, to put it simply, it is a chain of blocks that contain data and information.
Blockchain technology aims to allow digital information to be recorded and distributed but not edited. This way, information cannot be altered, deleted, or destroyed, allowing for a more transparent way to share data.
Web3, based on blockchain technology, creates a more transparent and accessible environment.
One use case of blockchain technology is cryptocurrency. Digital assets like Bitcoin and Ethereum are all fundamentally built based on blockchain technology.
Thus, with the new digital era and the rise of blockchain tech, cryptocurrencies have become a buzzword. With many beginner and pro investors alike taking an interest in digital currencies, this has paved the way for new methods of earning through crypto.
Though trading and investing in digital currency helps individuals earn, these typically require additional research and skills. Moreover, with persistent price swings and market volatility, it might not necessarily be a guaranteed source of income. Even the best investors are likely to meet with periods of losses in times of market downturn.
Therefore, crypto users have begun sourcing for alternative methods to help maximise the productivity of their crypto holdings to earn consistently and, yes, sometimes even when the market is facing bearish sentiments.
Ahead, we discuss some of the ways crypto users can earn passive income in Web3.
Deposit assets in an interest-earning account
While investing in cryptocurrency does help investors earn when prices appreciate, depositing them into interest-earning accounts will allow them to earn a greater yield on their crypto assets.
Presently, many platforms offer such a service, and most of them come equipped with other features to help crypto users maximise the productivity of their crypto assets.
Also Read: Crypto and beyond: A guide to blockchain networks in Asia
Singapore crypto lending platform Hodlnaut is one such example. It aims to offer alternative avenues of earning by allowing users to earn interest on their crypto assets no matter which direction the market is heading, at their convenience and in a safe manner.
Hodlnaut offers high-interest rates of up to 12.73 per cent on six supported assets, namely BTC, ETH, USDC, USDT, WBTC, and DAI. The platform also comes equipped with a Preferred Interest Payout and Token Swap function to allow users to earn and receive in the currency of their choice, encouraging flexibility and control over users’ crypto assets.
Furthermore, such platforms are likely to offer compounded interest. Users will earn interest calculated based on a larger sum than the initial deposit.
This is one of the more convenient methods to earn consistent returns even during market fluctuations. The best part? Users don’t even need to manage their accounts actively.
Cloud mining
Another way investors can earn in Web3 via cryptocurrency is through cloud mining. While mining requires technical expertise and a physical mining setup, cloud mining does not.
If you’re new to the term, here’s a quick breakdown:
Cloud mining is the process of generating cryptocurrencies by using computing power from a third party or a cloud mining operator. To do so, users will need to place some funds into a cloud mining service provider, and in turn, the firm will invest those funds into a physical mining operation.
When it starts earning some rewards, users will be given a portion of the cryptocurrency they support. There are also a ton of cloud miners to choose from, such as BeMine and Shamining. Some even have mining farms that use green energy from wind and solar power plants.
This is a much easier and more fuss-free option than the usual mining process since the procedure is extremely straightforward and does not require much technical expertise or time.
Holding dividend-paying currencies
Lastly, users looking to earn with cryptocurrency can also choose to buy and hold dividend-paying tokens. However, it is imperative to note that not all digital currencies pay out dividends.
Most of such dividend-paying digital tokens are issued by exchanges, and some examples of dividend-paying cryptocurrencies include NEO and Cosmos.
Also Read: Is Bitcoin the safest currency in rising global tensions?
There are also tokens that are known to offer users discounts on trading fees and, at times, entitle them to a share of the platform’s profit.
KuCoin Token (KCS) and Bibox Tokens (BIX) are some examples that pay holders up to 50 per cent of the platform’s trading fees in dividends.
The plus side about dividends? They are pretty consistent. To earn more dividends, users can simply buy more tokens and hold them.
Final thoughts
Web3 presents itself as an improved version of the current internet, with its fundamentals based on blockchain technology.
This has propelled the use of digital assets, with crypto interest accounts being one of the many methods and use-cases of Web3.
This provides an opportunity for many investors to earn passive income via cryptocurrency. Plus, some of these methods are simple and fuss-free, making them ideal for beginners.
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