The concept of generating passive income through cryptocurrency is not exclusive to wealthy investors—it is within reach of everyday individuals, although it requires careful planning. For those with significant financial resources looking to broaden their income opportunities, strategies for earning passive income in crypto present distinct possibilities, but necessitate more than mere investment without thought. The essential factor is finding the right equilibrium between risk and potential reward, utilizing specialized methods beyond the straightforward "buy and hold" approach to achieve consistent gains while safeguarding one's capital.

Staking refers to the practice of locking cryptocurrency in a wallet to aid in the functioning of a blockchain, thus earning rewards in return. In contrast to Bitcoin's energy-intensive mining process, proof-of-stake (PoS) cryptocurrencies such as Cardano and Solana allow individuals to stake without extensive technical skills. Services like Coinbase and Kraken provide custodial staking options that yield annual returns of 4-10%, but using hardware wallets for self-custody enhances security. For investors, staking transforms dormant assets into productive ones, although this entails committing funds for predetermined durations—therefore, liquidity considerations must be addressed.

Yield Farming: Strategic Pool Selection

Yield farming enables individuals to lend cryptocurrency or add liquidity to decentralized finance (DeFi) pools for higher profitability. Nonetheless, not all pools yield the same results. It is advisable to concentrate on well-established DeFi protocols such as Aave (for lending) or Uniswap (for providing liquidity) that have reliable performance records. Steer clear of "high APY scams" by reviewing audit findings from reputable companies like CertiK. For instance, lending stablecoins such as USDC through Aave can yield 3-5% safely, whereas providing liquidity on well-established pairs could generate 8-12%, albeit with an understanding of impermanent loss.

Crypto Dividend Tokens: Dividend-Paying Assets

Certain cryptocurrency initiatives distribute dividends derived from their profits, akin to traditional stocks. Tokens such as NEO (which distributes GAS tokens) and VeChain (which employs a token burn and reward system) provide regular dividend payments. Investigate projects with clear revenue frameworks and be wary of those asserting "guaranteed dividends" without transparent income sources. These tokens amalgamate the growth potential of cryptocurrencies with conventional dividend income streams, although they are also influenced by market fluctuations.

Grid Trading Bots: Automated Market Making

Grid trading bots execute buy and sell transactions at predefined price ranges, profiting from market shifts. User-friendly grid bots are available on platforms like Binance and KuCoin, making them accessible for novices. It is advisable to establish conservative ranges for less volatile cryptocurrencies like Ethereum to reduce risk exposure. For example, employing a grid bot on ETH within a range of $1,800 to $2,200 can take advantage of daily price movements, although transaction costs may diminish profits—therefore, select platforms with minimal trading fees.

Risk Mitigation: The Foundation of Success

Successfully earning passive income through cryptocurrencies necessitates effective risk management. It is crucial not to invest more than 5-10% of your overall portfolio in crypto passive strategies. Spread investments across different asset types (such as stocks, real estate, and cryptocurrencies) to prevent overexposure. Implement stop-loss mechanisms when yield farming and grid trading, and maintain emergency funds in stablecoins. For wealthy investors, merging crypto passive income with traditional investment assets results in a strong, multi-faceted income strategy.

Everyday individuals can indeed achieve passive income through crypto, but it is not a path to "easy wealth." It requires thorough understanding, careful scrutiny, and diligent risk management. For wealthy investors, these methodologies provide a means to engage with the innovations in crypto while ensuring steady revenues—transforming the cryptocurrency arena from a gamble to a credible element of a well-rounded financial strategy. With the right techniques, the pursuit of passive income in crypto is governed more by informed, tactical choices than simple luck.

（Writer：Hoock）