When it comes to making passive income; there is no greater passion of mine. Especially when I can do this using cryptocurrency I've already accumulated. I believe crypto will present us with the largest transfer of wealth we have seen in recent memory. But it won't be easy. We all need to put in the work and research now; this will help put us in the best possible position.
As you know; crypto markets are changing at an incredible speed, especially the lending markets, and if we want to be successful, we must also keep changing.
That's why I recently did a deep dive into KuCoin and all the ways they offer for making passive income. I hope it can become my next home where I not only earn passive income but also do most of my crypto trading.
Since the original article grew to such a large size. I had to split the article into 2 parts. The first part I posted earlier this week really sparked KuCoin cryptocurrency lending. YOU CAN FIND IT HERE.
Today's post will feature the 2nd part of the article; which will focus on betting and using trading bots. It's been a great experience experiencing and learning all that KuCoin has to offer and I hope you find it as exciting as I did.
So without further ado, let's dive into Part 2 of KuCoin: The Best Place to Earn Passive Crypto Income?
Although borrowing cryptocurrency can be very beneficial, there is no guarantee that it will last forever. Or as you've already seen, the rates you get or the tiers can be something that's constantly changing. Make that passive income stream not so passive. Staking is different, it is the process of actively participating in the validation of transactions on a proof-of-stake blockchain. For which you get betting rewards. Because of this, betting is more of a guaranteed way to earn passive income than lending and is one of the reasons I've been trying to build my betting portfolio lately.
As I took my first look at KuCoin's betting options, I was once again surprised at how many options and offers are available to you.
KuCoin offers three different ways to earn interest on your coins without lending them out, which can be considered staking. They are savings, betting and promotions.
It allows you to earn rewards for storing coins in your exchange wallet without locking them. Although these rewards are usually smaller than if you locked them in the betting protocol. Since there is no lock-in or buy-out period, they allow you more freedom to make decisions on a whim. Maintaining full control of your coins.
Put very simply, when you stake KuCoin, you lock your coins for a period of time, contributing to the ongoing security of the chain and also helping to validate transactions. Rewards from successfully validated transactions are paid to you as interest. If at some point you want to withdraw or sell your coins. There is often a redemption period that you must wait until your coins can be unlocked. For Cardano the redemption period is only 1 day but for Polkadot it is 28 days.
Another added benefit when staking on KuCoin is that you not only earn interest on your coins, but you also get POL token rewards. You essentially get two rewards at the same time.
These are limited time campaign or special offer to get interest on your coins. Think of it as similar to earning interest on your savings, but these limited-time promotions won't last forever. Promotions are usually offered for newer coins and have larger than normal interest rewards given to increase interest in these coins. Current KuCoin promotion levels range from 24,25% to 100,25%; much better than you would normally see for a regular bet.
The coin I bet the most is Ethereum. The opportunity to earn interest passively by betting on the second largest coin in terms of market capitalization is a chance you simply cannot miss. Because of this, how well KuCoin does ETH staking is vitally important to me.
Ethereum 2.0 staking is a bit more difficult than your average coin because your ETH2 coins and staking rewards are locked in the protocol until ETH and ETH2 merge into one blockchain. The problem with this is that no one knows for sure when this will happen and there is no guarantee that it will ever happen. It takes a lot of confidence to give up the liquidity of your coins by locking them up indefinitely.
With the exchanges I used to stake ETH2, the above situation was exactly my experience. My coins were locked and I couldn't sell or withdraw even if I wanted to.
Fortunately, KuCoin has a solution for this. The exchange provides liquidity and maintains the ETH2/ETH trading pair on their spot exchange. Although it is currently trading at a slight discount. The level of peace of mind this feature provides is worth that small discount in my opinion. I don't plan on selling my ETH2, but it's nice to know that I could if I really needed to.
Comparing KuCoin's ETH2 staking to Coinbase shows a big difference between the two services. The current interest rate you get on Coinbase is 4.50% while you have no liquidity. While the rate of KuCoin is 5.07% + 0.60 POL rewards; a total of 5,67%. Then it also has the ability to maintain liquidity; makes deciding which place to use to stake your Ethereum extremely easy.
Polkadot is another blockchain that I have accumulated heavily and am actively betting on. I am very happy to see that KuCoin is a big supporter of the Polkadot ecosystem; another positive thing that KuCoin is doing. They offer DOT betting which is great; but an even more exciting thing in my opinion is their adoption of Polkadot Parachains.
If you are new to Polkadot, you should know that it consists of 3 main parts. The relay chain, parachain and bridge. Parachain is connected to the Polkadot Relay Chain through "slots" to enjoy the security of the Polkadot network, achieving interoperability with other Parachains. There are a limited amount of slots that must be bid for and won by locking Polkadot. The lock-in period for this DOT is 96 weeks. After 96 weeks, your DOT will be returned to you.
Users who bid on the winning project will receive tokens of that winning project. This is a great way to get your Polkadot working for you, and also to get into projects very early that have great potential. If your project wins as said above, you will get this winning Parachain token.
If you are bidding on a project that does not win the auction, then the DOT will be returned to you at the close of the auction.
With Polkadot, there are many ways to make your DOT work for you and earn passive income. By betting or participating in the Parachain auctions. Both of which you can't currently do on several exchanges like Coinbase. Another positive thing KuCoin has going for it.
I'll be the first to admit that I was about as far from being a trader as one could be. Although trading brings some of the highest possible returns in the market. Instead, I've generally been more of a buy-and-hold for the long-term consumer type in the past. Part of the reason for this is that I've always thought trading was too intimidating. I feel like I don't have the technical knowledge needed to be successful and I might lose my money. And then there is the time requirement to consider. To be a successful trader, you need to be glued to the computer, ready to take advantage of possible trades at any time of the day. That's not even mentioning the emotional control you need to maintain to buy and sell at certain levels.
Luckily there is a solution for people like me and it might just convince me to enter the trading market to earn passive income. This solution I mentioned is offered by KuCoin who has implemented an extremely useful tool with their automated trading bots.
If you are new to trading bots and don't know what they are. Simply put, it is software that constantly monitors the markets. When the software sees a trading opportunity, it will automatically open the trade. Since it's software, it doesn't have the limitations that people usually have when it comes to trading. They can buy and sell at incredible speed, taking advantage of volatile price movements and also find you the best prices. Being software, it strictly follows set parameters and takes all human emotion out of it. Which is a great thing because we are usually the ones who get in the way of our own success.
KuCoin trading bots have several advantages for cryptocurrency traders. Including convenience, efficiency, powerful strategies and also removing the human element. My favorite part is that anyone can use it regardless of experience level and it's free. Which means it would be perfect for me.
You are only responsible for the payment of each crypto transaction and the small trading fee that comes along with it. Not only does KuCoin offer a trading bot for free to help you become a profitable trader, but they actually offer several variants of this product, each of which is customizable and implements a different strategy depending on what you're looking for. Which is perfect because everyone is different and has their own goals or preferences.
Kucoin currently offers 5 different trading bot options. And the parameters can be customized even more to your own taste.
1) Dot grid –
The Spot Grid bot is a trading strategy that places spot orders when prices rise and also fall; taking advantage of price volatility. It works incredibly well during price volatility like we've experienced over the past few months.
2) Futures section –
A trading strategy that allows you to go long or short the market. Just like with regular margin trading, there is a possible risk of liquidation.
3) Intelligent rebalancing –
A trading strategy whose main objective is to increase the total amount of assets by selling high and buying low. While keeping your portfolio's coin allocation percentage unchanged.
4) DCA (Dollar Cost Averaging) –
Timing the market is often more important than actual perfect market timing. That's the whole strategy behind dollar cost averaging. Which is basically buying fixed amounts of crypto at certain time intervals. This allows you to capture a good volatility average of your crypto and let the KuCoin DCA bot do all the work for you.
5) Infinity Grid –
The infinite network is a derivative strategy of the spot network designed to avoid "missing out" from crypto pumping. It is best used during bullish price movements, as the bot will only sell during profitable times.
One of the most important things that will help you be successful in crypto is to always keep an open mind when it comes to new opportunities. That's exactly why I wanted to learn more about KuCoin trading bots, even though I didn't have much trading experience. I came away impressed and felt like I could definitely jump in and do it myself.
If you are interested in learning more about these trading bots and have questions. KuCoin has a really cool FAQ page that can help you out. HERE
As always, thanks for reading!