Passive Income Opportunities in the Cryptocurrency Industry
The introduction of digital assets, particularly cryptocurrencies, has caused a paradigm shift in investment norms and practices in the last decade. Bitcoin, the first digital asset, was said to be the best performing asset in the last decade, and it now trades around $38-39k, with thousands of percentage increases in returns since it went mainstream in 2009. Since then, the cryptocurrency industry has evolved, and the birth of DeFi (Decentralized Finance) made possible by the creation of the Ethereum blockchain propelled the cryptocurrency industry to greater heights, creating diverse income streams ranging from yield farming, staking, lending, and borrowing protocols for retail investors and institutions alike. Aside from decentralized finance, blockchain technology has successfully infiltrated the gaming industry, with the introduction of GameFi and the play-to-earn model currently looking to displace the traditional play-to-win model. It is also another form of passive income stream made possible by the introduction of cryptocurrency.
There are significant drawbacks to these passive income streams, which will be discussed in this article. In addition, we would investigate new forms of passive income streams emerging in the cryptocurrency industry and their advantages over some of the more popular ones.
The Downsides of Current Passive Income Opportunities In Crypto
Trading is one of the most popular ways to earn passive income with cryptocurrency. However, cryptocurrency trading requires a high level of skill and knowledge in terms of analysis tools, reading charts, and the general crypto markets, and this has proven to be a significant barrier in the onboarding of newcomers, as it also comes with a lot of risks because cryptocurrencies are very volatile assets. Furthermore, other passive income streams, such as DeFi, which offer users various financial services such as staking, yield farming, lending, and borrowing, amongst other benefits, typically have a high barrier to entry because the UX of these decentralized financial applications is quite difficult to navigate if users are not tech-savvy.
While GameFi has opened up new use-cases for the application of cryptocurrencies and appears to be the most efficient form of passive income stream for retail investors due to its play-to-earn model, it also has significant drawbacks. Gaming NFTs are becoming increasingly expensive, making it difficult for investors to profit, even with the introduction of gaming guilds that offer scholarships. Cryptocurrency is evolving, and new projects aimed at lowering the barrier of entry for newcomers to cryptocurrency while providing passive income opportunities should be prioritized, with recent developments pointing to the X-2-Earn models.
X-2-Earn models are incentivized models in the cryptocurrency industry that aim to create passive income opportunities for investors. In the GameFi industry, one famous example is the play-2-earn model. Other models include the stake-2-earn and predict-2-earn models. Combining these opportunities for different audiences can be essential in onboarding retail investors and creating an efficient ecosystem of passive income opportunities in the cryptocurrency space.
PlotX is a one-of-a-kind project that rewards users with passive income opportunities by utilizing X-to-Earn models such as Play-to-Earn, Stake-to-Earn, and Predict-2-Earn. PlotX was founded in 2020, with the primary function of the platform aimed at allowing users to earn rewards through its Predict-to-Earn model. Users can make various predictions about various cryptocurrency and fiat markets and earn rewards for making correct predictions about the price differentials of these assets. The PlotX platform currently has over 70,000 markets. PlotX also employs the Stake-to-Earn model, allowing users to stake on its platform to earn rewards. Staking $PLOT, the platform’s native token, provides up to 400% yearly returns. PlotX aims to lower the barrier to entry and has put in place some features that address some of the existing issues in other passive income streams in the cryptocurrency space. To put this in context, PlotX transactions are gasless, and users can make predictions for as little as $1, making it simple to onboard users in developing countries. PlotX would also implement the play-to-earn model, introduce NFTs, and expand the use cases for its native token $PLOT.
Incentives have played an essential role in Web 3 and the cryptocurrency industry. According to CoinMarketCap, the cryptocurrency industry has more than a trillion dollars market capitalization. which has made many millionaires over the last decade. To displace fiat currency, new platforms must find a more efficient way to incentivize users, and projects like PlotX aim to do just that with the various measures put in place to lower the barrier of entry to Web 3.0.
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