Many centralized cryptocurrency exchanges allow you to open deposits with a fixed or floating interest rate. As a reward, deposit holders receive a small part of the crypto exchange's income. In the cryptocurrency environment, deposits are one of the safest ways to invest. Today, choosing between volatility in the crypto market and stagnation in traditional finance, investors are increasingly choosing cryptocurrencies. Capitalization is growing, involvement in the crypt is growing, and opportunities for crypto-financiers are becoming more.
If we talk about centralized exchanges, which are usually regulated and better protected, then the main risks are hacker attacks or a sudden collapse of the exchange, as happened in FTX. In order to minimize risks, it is better to invest in proven sites that work for a long time and have managed to prove themselves well. To hedge against volatility, you can diversify your investments, invest in different cryptocurrencies and projects. Or invest in stable coins – crypto assets tied to real currencies, for example, to the dollar. However, you will not get high dividend interest here – the lower the risk, the lower the yield.
Many cryptocurrency services (both centralized and decentralized) allow cryptocurrency owners to issue their digital coins to other users at a percentage.
Unlike centralized services where you need to go through the KYC procedure, decentralized P2P lending platforms offer loans to anyone without checking their credit history and without an identity card. The only condition is a pledge. Usually it is about 150% of the loan amount. The borrower takes a loan in cryptocurrency at interest, leaving collateral also in cryptocurrency. The investor invests his assets in a common pool and earns interest. At the same time, the smart contract guarantees that the lender will return its funds with interest even in the event of a drop in the value of cryptocurrencies or non-repayment of the loan by the borrower. The main risks, without taking into account the volatility and regulatory problems inherent in all cryptocurrency finance, are errors in smart contracts, which are quite difficult to track in advance.
Staking is considered one of the safest and most reliable ways of passive earnings on cryptocurrencies.
Indeed, from the point of view of the balance of risk and benefit, staking is perhaps one of the most optimal options for investing in cryptocurrencies. It is safer than margin trading or farming, does not require special knowledge and immersion in the process and brings a decent income, with the right strategy, compared to bank deposits.