One of the recurring criticisms made by veteran investors of the cryptocurrency market is that Bitcoin is not a cash-generating asset. But that's okay, not all assets need to be productive, gold, as a commodity, showed a much higher return than the stock market in 2020.
Even so, the cryptocurrency market has the potential to impress many people, with gambling-based tokens and security tokens, which basically function as digital securities.
Below are some of the more prominent tokens that distribute the profits in some way.
Nexo is a loan company with a bitcoin guarantee. What does that mean? Basically, it allows you to use your bitcoin to obtain cheaper loans. Almost like a home mortgage, but without bureaucracy or complications.
The company has issued tokens on the blockchain and has agreed to pay 30% of the dividends of all profits generated to the owners of the Nexo token. Dividends are paid in BTC, Ether, or even Nexo tokens.
Nexo tokens did very well in the last big market crash in 2018, reaching $ 2.20 each; today, they are trading at $ 0.15.
However, the company has expanded and is already trading altcoins, has a debit card service, and has broken records for dividends paid.
This KCS ticker token is centralized and works as a way of investing in the Kucoin exchange, which distributes the broker's earnings through the fees of each trading pair.
In this way, Kucoin Shares holders earn dividends in more than 200 different cryptocurrencies that the platform has, depending on the trading volume of each one. Plus, merchants with thousands of KCS get discounted trading fees.
The great advantage is the ease of investing in a large cryptocurrency exchange and that, if it grows more in the market, the token can appreciate by generating profits in addition to dividends.
The main downside is having to keep the token at the broker, which can be much less secure than keeping it in your wallet. Cryptocurrencies received as profit distribution can be withdrawn by paying the withdrawal fee.
Betting on the largest broker on the planet
Binance Coin is initially proposed to discount the trading fees of the exchange, which is today the largest in the world by volume.
However, the discount, which started at 50% in 2017, drops by half each year, reaching zero in the fifth year of existence. In the future, it will be used on Binance's decentralized exchange (DEX).
The BNB token does not technically yield, but it does have a periodic coin-burning feature. Quarterly, an amount of tokens based on the total volume of operations in the brokerage goes out of circulation in the market.
This process tends to increase the price of the remaining tokens, which should assume the total market value of Binance Coin, which currently stands at $ 3.4 billion, according to Coingolive. Therefore, buying BNB also serves as a way to bet on the success of the largest broker on the market today.
The coin burning process must continue until 100,000,000 coins are useless, which represents 50% of the total tokens minted in its creation. There are still 47,883,948 to be withdrawn from circulation.
Unlike other cryptocurrencies, Decred (DCR) tries to provide security to its blockchain through a hybrid system between Proof Of Stake (PoS) and Proof Of Work (PoW). In this way, in addition to the mining traditional that we know from Bitcoin, holders also get new coins.
And it is not only the block validation that the holders are in charge of, with DCR you can participate in voting for changes to the consensus rules and Politeia proposals. But in this article we will focus solely on the remuneration of users.
Thirty percent of the block reward goes to PoS validators, and to become one, participants must purchase tickets that vary in price every 12 hours. After the purchase, the ticket waits to be inserted in a block by a miner and waits to “mature” to be able to vote, the whole process takes an average of 28 days.
Finally, the token takes its vote and receives the mining reward and the price of the return ticket, in the process there may be fees from a group of bets. Besides being a way of making money, this is especially interesting as it is a way of empowering the incumbents, who basically choose the "rules of the game".
How we explain In another article, the second largest blockchain in the world will undergo major changes and will work exclusively through PoS. The new mining process will not require physical equipment, the new rewards of the blocks will be of the interested parties, in a similar way to the previous alternative.
According to the current proposal, the minimum amount of tokens you will need to hold is 32 ETH. While the new Ethereum is being tested, thousands of new addresses reach that number of tokens, probably getting ready for make money with Ethereum 2.0.
ReitBZ – BTG Token
Banco BTG was the first financial institution in Latin America to issue its own blockchain token, ReitBZ. Backed by shares in a Participation Investment Fund managed by the bank itself, the token already distributed $ 83,000 in dividends in July.
Unfortunately, residents of Brazil, the US, and China cannot participate in the distribution.
There are many other tokens that distribute profits and dividends in some way. This list brought only some of the cryptocurrencies and tokens that represent innovations to the traditional market in general, without setting up an investment recommendation.
Lending platforms can make any cryptocurrency "perform," even Bitcoin. However, much depends on the risk appetite of each investor.
It is also worth noting that nominal earnings do not represent real earnings, and the investor would fall into a terrible risk-return ratio if they did not consider, among other factors, the liquidity of the token.
This publication is not an indication of investment. Remember to check the jurisdiction to contribute any amount anywhere.