Staking crypto is the act of “locking” up or escrowing your cryptocurrency into a proof-of-stake (PoS) protocol, decentralized application, or smart contract in order to receive something in return.

This return is typically more cryptocurrency, but may also take the form of some sort of privilege, such as governance over a decentralized application (DApp) or future perks. You can also stake to receive non-fungible token (NFTs).

In the real world, you can liken the act of staking to putting your money in a certificate of deposit (CD). A CD allows you to deposit your money into a special account that pays you to “lock up” your money for a specific period of time.

However, the comparison to a CD is a bit of an abstraction, and in reality, there are many different ways, reasons, processes and methods that go into staking cryptocurrency. If you’re keen to start staking you should keep a few things in mind.

The first is that each crypto has a specific rate of return. The total profit can vary depending on the price, inflation rate, protocol rules, fees collected, fees paid out in delegated staking, and many other factors. The reason why this is important is because some forms of staking are more profitable than others.

1. Select coin or token.

2. Learn the staking mechanism required to stake (smart contract, minimum stake, delegated staking, etc.

3. Choose an exchange, DApp, or smart contract.

4. Connect to smart contract or deposit cryptocurreny.

5. Start earning.

One of the ways to make money in crypto some may be more familiar with is trading. Trading is the act of buying and selling crypto, securities, such as stocks, bonds, currencies, and commodities, to make a profit. It should be noted that trading isn’t for everyone, especially the faint of heart. You can lose money.

That being said, there are many ways to approach trading, as it is more of an art than a science. As it is one of the more difficult ways to make money from crypto, here is a simplified list of a few things to keep in mind.

• Platforms: There are many places where you can go to trade, be it CEXs or DEXs. In summary, CEXs tend to have a better user experience and deeper liquidity at the cost of counterparty risk and regulatory risk. In addition to removing counterparty risk, DEXs also offer the added benefit of platform-wide revenue sharing. On the other hand, users incur gas fees for their trades and may experience low liquidity during periods of low interest.

• Reduce risks: There are a few ways that you can approach reducing risks, depending on what you trade. Diversifying your portfolio is a good way to mitigate some risks. However, choosing the right asset is also a way of being risk adverse.

•Education:Learn the fundamentals, learn how the financial products behave, and learn how to mitigate risk. Education also goes hand in hand with research and developing a trading plan. Always do all three before investing.

•Master your emotions: One of the first lessons you should learn before trading is to master your emotions. Whether choosing trading signals, a platform, or mitigating risks, none of these methods will be effective if you do not master your emotions.

1. Select an asset or financial instrument (e.g. futures or options) that you want to trade.

2. Choose an exchange (based on fees, trading rebates, liquidity, interface, etc).

3. Register an account and deposit capital.

4. Begin trading.

Crypto lending is the second method on this list that allows you to make money from passive income. It is also more straightforward to learn in concept, as you simply:

1. Supply a borrower with crypto.

2. They repay the crypto.

3. You receive interest in addition to the crypto that you lent out.

Unlike traditional finance, web3 does not institute credit scores to assess the creditworthiness of the borrower. Instead, the terms of repayment are hardcoded into the protocol.

When you loan cryptocurrency through a protocol, you do not know the borrower — nor do you have to. In TradFi this would be absurd, but not so much in crypto. You do not have to know or trust the borrower in crypto.

Typically LPs deposit crypto into a “pool” of cryptocurrency and users borrow from that pool. In order for borrowers to borrow crypto, they must overcollateralize their loan.

If the price of the collateral hits the liquidation threshold, the collateral is sold off and used to pay the LPs. If the loan is not liquidated, when the borrower repays the loan you will receive your crypto and fees/interest for issuing the loan.

Moreover, in crypto you can rehypothecate the crypto you loan or borrow to compound your earnings for more profit — another reason why it is one of the top methods for making money in crypto.

1. Select the asset that you would like to lend. It is important to choose an asset that has demand.

2. Select a platform that allows you to lend, ideally based on how much you are allowed to earn, the fees, and safety of the platform.

3. Create an entrance/ exit strategy or plan to stay risk adverse, as market downturns can affect your earnings.

4. Deposit your crypto onto the platform and start earning.

Play-to-earn (P2E) is a way that you can make money from crypto and have fund while you’re doing it. P2E is a business model in the gaming industry, particularly in the blockchain and cryptocurrency space, where players can earn real-world rewards, often in the form of crypto or NFTs, by playing games.

These rewards are typically traded or sold on various platforms. This model contrasts with traditional gaming, where in-game assets usually don’t have real-world value.

P2E games often involve activities like completing tasks, winning battles, or progressing through game levels to earn these rewards. When you think about it, this not an entirely foreign concept, as E-sports has always been a popular source of income.

In this way, crypto just evens the playing field for the everyday users. Today, everyone can earn from playing games. As you can see below, the P2E market is just a baby, yet sits right under $10 billion. This contrasts to the current E-sports market, which is less than $3 billion.

1. Select a blockchain based game.

2. Complete the in-game tasks to receive crypto, NFTs, or rewards.

3. It is important to remember that the assets must have a demand to resell them on the secondary market.

An airdrop is when a protocol or blockchain retroactively decides to reward users and “drop” or send them cryptocurrency or NFTs to reward their loyal use of the platform.

A blockchain fork occurs when there is a divergence in the blockchain protocol, leading to the creation of two separate paths: one that follows the old protocol, and another that branches off with a new protocol.

This often happens during a hard fork, resulting in two blockchains with identical account balances at the point of divergence. From a user’s perspective, this means they will have holdings in two separate blockchains.

However, these holdings are independent post-fork, and their respective values can differ based on several factors. It’s important to note that having coins on both blockchains does not necessarily equate to double the financial value.

1. Select an asset that you would like to receive an airdrop from.

2. Exercise caution, as there are many phishing scams out there, and some people can rug pull their own projects.

3. Farm for the airdrop by using the protocol, blockchain, or completing specified tasks.

4. Wait for the announcement of the airdrop terms to receive crypto.

Mining is the OG way to make money from crypto. Simply put, mining is the process by which coins are minted on a proof-of-work (PoW) blockchain.

It entails using computer hardware and software to run algorithms to secure a cryptocurrency network from adversarial behavior. This is a resource intensive process, as opposed to the more eco-friendly PoS.

In return, you receive the native coin of that particular blockchain for utilizing your resources to secure the network. It is considered the most censorship resistant way to enter the cryptocurrency market without utilizing a counterparty.

1. Choose a PoW cryptocurrency.

2. Purchase the necessary hardware (e.g. GPUs, ASICs, power supply units, fans, etc.).

3. Some cryptocurrencies may require you to join a mining pool to make profit, if you do not have a large scale operation.

4. Begin mining.

Whether as a bonified crypto venture capitalist (VC), an accredited investor, or a retail investor, investing in crypto is the most obvious way to make money from crypto. Seeing as how investing itself needs no explanation, here are a few things to keep in mind:

• Diversify risk: Some people like to use the 70/30 portfolio. 70% in assets that you can earn from capital gains, 30% in assets that pay you to own them. You can also hold assets that are likened to digital gold and digital silver for long-term price appreciation. The rest of your portfolio can be potential unicorns, preferably a smaller percentage.

• Fundamental analysis: When you are choosing which coins and tokens to hold, it is safer to choose assets that have intrinsic value. This is determined by their use case, or the problems they are trying to solve and their ability to actually solve them.

• Investment goals: Needless to say, your investment goals should be realistically attainable. If you are trying to become an overnight millionaire, you are in the wrong business. For many investors, a 10% yearly return is the cream of the crop.

• Patience: The market can remain irrational longer than you can remain rational. In other words, good projects can fail, and scams can pump. This does not mean that you made a bad decision by avoiding projects with bad fundamentals. Even billion dollar VCs will have one or two unicorn projects that offsets multiple losses. Stay patient and stick to a plan. If the plan fails then readjust.

1. Learn fundamental analysis.

2. Set aside a portion of your net worth/ income for investing and another portion for paying your bills.

3. Create an investment strategy and goals.

4. Begin investing.