Ever wanted to become an art collector? An investment banker? A venture capitalist? A professional gamer? An algo trader? A gold miner? In crypto, you can truly be any of these professions. Crypto newbies (me) and veterans alike can contribute to a blockchain’s economy in a variety of ways and gain valuable skills in the web2 and web3 worlds.
Note risks are relative. The whole thing can go up in flames or Crypto Winter may be around the corner…
Difficulty is also relative. UX and design are NOT strong suits in web3 and crypto, and a lot of these applications and exchanges are confusing as hell and not user friendly.
Tax and regulation are also complicating how money is made in crypto!!
Categories
Market Trading
HODLing
Yield Farming
Staking
Lending Bots
Flash loans
Play-to-earn (P2E)
Games
Non-Fungible Tokens (NFTs)
Mining
Market Trading
Description: Playing the volatility of the market, buying low and selling high at any time
Difficulty level: 🧠🧠🧠🧠
Crypto day trading can be a full time job with lots of in depth technical analysis
Potential returns: 🤑🤑🤑
You can make hundreds, if not thousands of dollars in any given day.
Risks: 🚩🚩🚩
Crypto is extremely volatile. Play at your own peril. Note the risk increases dramatically (🚩🚩🚩🚩🚩) when you use leverage (trading with borrowed money) and short calls (predicting a price to go down)
HODLing (Hold On For Dear Life)
Description: Buying a cryptocurrency, holding it, and hoping it goes “to the moon,” that is, buying a token for $0.001 and it eventually goes to $1,000+ in 10 years
Difficulty level: 🧠🧠
Close your eyes and pick one. Keep up to date on the latest news, Discord chatter, crypto Twitter, upcoming Airdrops, etc.
Potential returns: 🤑🤑
If you pick a random coin, you will most likely lose all your money. If you do your research and time the market right, you could make a lot of money
Risks: 🚩🚩
There are hundreds of new shitcoins launched every day
Decentralized exchanges (DEX) are cryptocurrency exchanges that allow direct peer-to-peer cryptocurrency transactions to take place online securely and without the need for a middleman. UniSwap, PancakeSwap, and Curve are well-known examples of DEXs. Projects not listed in centralized exchanges (like Coinbase) can be found in a DEX.
Yield Farming
Description: You can offer two tokens into a communal pool to facilitate exchanges between the two tokens at lower rates than in a traditional exchange. For example, you can offer AVAX and MIM (AVAX’s stablecoin) into the AVAX-MIM liquidity pool. In return, you get proceeds from every transaction in that pool. The more transactions, the higher the return. In exchange for your two tokens, you also receive a liquidity pool (LP) token that you can exchange for your original tokens.
Difficulty level: 🧠🧠
Close your eyes and pick a pair. Keep up to date on the latest news, Discord chatter, crypto Twitter, trending projects in a blockchain, upcoming Airdrops, etc.
Potential returns: 🤑
The returns depend on transaction activity and how much liquidity you put in. To make any meaningful return, you need to contribute a significant amount to the pool ($10k+)
Risks: 🚩
This strategy creates passive income, which is resilient in downturns. However, you risk impermanent loss, which occurs when you could’ve made more money just holding onto the tokens instead of putting it in the pool.
Staking
Description: You can take the liquidity pool (LP) token from your yield farm and stake it, meaning that you plan to keep your tokens in the liquidity pool in exchange for additional passive income through transaction fees on these LP tokens
Difficulty level: 🧠
If you plan to keep your positions for the long term, it’s a good idea to stake, which takes one additional action.
Potential returns: 🤑
Ditto with yield farming
Risks: 🚩
Some exchanges have a mandatory holding period, meaning you won’t have access to your tokens for a certain amount of time. You also run into the potential for impermanent loss.
Lending
Description: Do you enjoy being the banker in the board game Monopoly? Boy do I have a money-making strategy for you! You can lend your tokens to others and get interest payments back. Many exchanges are overcapitalized, mean you can only borrow a certain percentage of the amount you collateralize in the market (For example, if you put up 100 AVAX for others to lend, you can only borrow 70 AVAX). Returns tend to be lower and more volatile than staking or yield farming
Difficulty level: 🧠
You just put up your money, lock it in, and let the money come in.
Potential returns: 🤑
This is also passive income, and you will have to put in considerable funds to make any sort of daily return.
Risks: 🚩
Since most markets are overcollateralized with insurance funds, you do not really need to be afraid of losing your tokens.
Trading Bots
Description: There are several different types of bots that will trade and sell in certain frequencies within certain price ranges
Difficulty level: 🧠🧠🧠
They are easy to set up, but difficult to master and actually get meaningful returns
Potential returns: 🤑🤑
You have the potential to make more money than other forms of passive income
Risks: 🚩🚩
You are more susceptible to volatility than other forms of passive income. Note the risk exponentially increases (🚩🚩🚩🚩) when you start working with leverage (trading with borrowed money) and short calls (predicting a price to go down)
Flash loans
Description: Classic arbitrage. You find price differences on two exchanges and execute an order instantly, paying off the loan immediately, and making a small return in the process.
Difficulty: 🧠
This is a new product that is pretty straightforward
Potential returns: 🤑🤑
You can get returns easily if everything works out
Risks: 🚩🚩🚩🚩
Bugs may still exist in code, and with such a new product, it has not been stress tested. Not only volatile, but may be unstable, insecure, and unreliable.
Play-to-Earn (P2E) Games
Description: Playing certain crypto games can earn you in-game currency, that can in turn be worth money
Difficulty level: 🧠
It’s easy to play the game, but you have to grind to earn tokens
Potential returns: 🤑 Grinding itself will only net you some tokens, which may not be worth a whole lot on their own.
Risks: 🚩
You just need to play
Non-Fungible Tokens (NFTs)
Description: One-of-a-kind digital assets that can be sold and traded like art or collectibles for personal use, in games, or as membership cards into clubs or exclusive metaverse communities
Difficulty: 🧠🧠 It is easy to buy NFTs, but you will have to do a lot of research on what could grow in value and what won’t
Potential returns: 🤑🤑🤑
NFTs, like most things blockchain, are wildly speculative to create and to buy
Risks: 🚩🚩🚩
It’s likely you end up with some worthless jpgs
Mining
Description: You offer computing power to a blockchain, and in return, you get tokens for each transaction you verify on chain.
Difficulty: 🧠
Initial setup may be tricky, but there are tutorials all over the place
Potential Returns: 🤑
Depends on the platform. Bitcoin for example is oversaturated and returns are low
Risks: 🚩
Almost no risk, other than the whole chain crashing and burning
