Sign Up on MEXC
DAILY NEWSLETTER
Your daily dose of Crypto news, Prices & other updates..
CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journalists and analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. You can read more about our review methodology to get more information on the ratings below. In order to provide our readers with accurate and unfiltered information, we work hard to uphold the highest standards for our editorial policy.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links, To get more information on the partner link placements visit our affiliate policy page . All advertisements are clearly labeled, and ad partners have no influence over our editorial content.
In 2025, generating passive income with crypto has become a primary objective for a growing number of investors. But with so many options, where do you even begin?
There are several proven ways to earn passive income with crypto. We’ve identified the 8 most effective ways to earn passive crypto income for the year.
This guide cuts through the noise and provides clear, actionable steps for a variety of strategies, from low-risk options like Play-to-Earn and dividend-earning tokens to advanced concepts like liquidity farming and staking.
Whether you’re a crypto veteran or just starting out, discover how to make your digital assets work for you.
A passive source of income provides a person with earnings without their active involvement. In the context of cryptocurrencies, many strategies allow you to earn money without spending your precious time in front of your monitor!
However, it’s essential to consider your financial goals and risk tolerance when choosing a crypto passive income source.
If you want to generate passive income, you should review the list of the most popular strategies first. You are welcome to check our brief overview to choose the one that aligns with your expectations.
| Method | Pros | Cons | Efficiency |
|---|---|---|---|
Staking | Relatively low-risk strategy Stable and predictable income Perfect option for people who want to hold their cryptocurrencies | Low annual percentage yields Long unstacking periods on some platforms | Moderate, depending on your initial investments |
Yield Farming | High interest rates Possibility to switch between yield farms platforms for higher income | Depending on market volatility Challenging management of assets on multiple platforms | High but risky |
Crypto Lending | Stable income Diversification and flexibility | Counterparty risk | High, but your borrowers may default on their loan |
Liquidity Provision | Lower dependence on market volatility Efficient price discovery | Possible impermanent loss Complex management | High |
Mining | Possibility to mine almost any popular cryptocurrency High security and reliability | High electricity consumption Service fees (for cloud mining) Expensive hardware | Low or moderate, depending on the crypto you mine |
Play-to-Earn Games | Robust control over in-game assets Possibility to earn rewards without investments | Necessity to spend time in a game Depending on the game’s popularity | Low |
Dividend-Earning Tokens | Regular payments | Risk of investing in a scam Possible project failure | Moderate, depending on the project’s success |
Airdrops and Forks | High income possibilities Low initial investments | Higher scam risk New tokens vulnerability | Moderate |
Staking is one of the most popular sources of digital passive income. It is similar to keeping your money in a traditional savings account. Cryptocurrency holders lock their coins in special staking wallets, which generate interest as the funds remain untouched.
The best places to open crypto “savings accounts” in 2025 are Binance, OKX, and ByBit. The most promising crypto investment opportunities include Cardano, Lido Staked Ether, and NEAR Protocol.
Also, explore passive income opportunities in liquid staking, restaking, and liquid restaking protocols.
Yield farms allow investors to earn returns by placing cryptocurrency in a decentralized cryptocurrency exchange (DEX) to provide liquidity for different crypto pairs.
As a rule, this passive income crypto strategy allows you to earn rewards from trading fees and protocol incentives, which sometimes may lead to impermanent loss.
Another popular method for generating passive income is by lending crypto. This involves placing your cryptocurrencies into a lending platform so other people can borrow them.
While choosing a service for this strategy, you may come across centralized (Binance Loans) and decentralized (Aave) options.
Centralized platforms are managed by institutions. They require you to pass the Know Your Customer (KYC) and Anti-Money Laundering (AML) checks. Novices often opt for them to earn a passive income because of professional customer support and advanced security.
Decentralized lending platforms rely on smart contracts that execute the loans. Considering that there is no central authority, this source of passive income demands more technical knowledge and risk tolerance, but, at the same time, may offer lower trading fees.
Liquidity pools work as reserves of different crypto assets locked in a smart contract. These cryptocurrencies may be used for various financial services, eliminating the need for intermediaries.
Every time someone trades using a pool containing your assets, a transaction fee is charged. After that, this fee will be distributed among all liquidity providers to reward them for their investments.
If you choose this way to earn passive income, opt for platforms like Uniswap, PancakeSwap, and SushiSwap.
You can earn crypto passive income by constantly mining tokens and coins using powerful hardware.
To assemble your home miner, you’ll need to spend at least $3,400 (for GPU, CPU, RAM, SSD, power supply, motherboard, frame, and cooling system) plus monthly payments for the increased energy consumption.
Even if you build a powerful crypto farm, it is still not recommended to focus on popular cryptocurrencies like Bitcoin, because their mining requires a lot of resources. As a result, you may simply not receive a return on investment. It is better to opt for Zcash or Clore.
You may also choose cloud mining platforms, which lend you the power of their hardware to perform crypto mining.
The P2E games like Axie Infinity and The Sandbox allow you to earn while enjoying the gaming process. You can obtain NFT, the price of which may increase as a project becomes more successful.
For example, a purchase of land in The Sandbox may be compared to a real estate investment, which you can further sell more expensively.
Dividend-paying tokens allow their owners to generate passive income through crypto by getting regular rewards. The amount of money you receive directly depends on the success of a project you’ve invested in.
Currently, the most attractive cryptos that pay dividends include KuCoin, NEO, and Bibox.
A hard fork occurs when a blockchain splits into two separate chains with different tokens. This is usually due to significant changes in its underlying code (typically initiated by the members of a crypto community).
An airdrop is an event where users can get new tokens directly from a new crypto project to their wallets.
Both opportunities allow you to earn passive income. You can get free coins or buy them at their initial price, which may increase with time. As it grows, you may start selling your tokens on DeFi platforms and stocks.
If you want to earn passive income in crypto, it is essential to invest in reliable and promising tokens and coins. As a rule, they should meet the following criteria:
Your passive income earnings diminish if the value of the tokens continues to decline. Therefore, it is recommended that you invest in promising tokens with passive income potential. Review the token’s fundamentals and price history. Invest in tokens with a good record of growth.
Safety is paramount in the pursuit of crypto passive income. Several passive income projects require you to stake your tokens on a smart contract. It is important that you evaluate the security of the protocols and network before committing your assets to the smart contract.
While this is not a key factor, an unlimited supply means that your holdings are constantly being diluted by new supplies. If possible, invest in tokens with a definite supply.
The project team is a key factor when considering passive income projects. Know who is behind the project and conduct appropriate research to ensure that they are trustworthy.
Projects with a good community are also recommended. This is not only because a strong community builds a strong project. Strong communities can offer support in several ways.
Projects that support novel technologies are likely to remain relevant in the crypto space. It is recommended that you invest in forward-thinking projects.
This sustains your passive income earnings and grows your passive income opportunities as the project continues to innovate.
The investment in assets that meet all these criteria is the best crypto passive income. And if you don’t have time to review coins and tokens, you can opt for the following cryptocurrencies:
Polygon offers up to 7% APY on POL POS staking. You can purchase POL from exchanges and visit the official staking portal to stake your assets and earn passive rewards. You can also stake POL on liquid staking protocols like Ankr and on centralized exchanges like Binance, Bybit, and Coinbase.
You can stake SUI on the DPOS staking portal and earn up to 5% APY. SUI can also be staked on centralized exchanges like Kraken, Binance, Bitget, and Kucoin. APY on these platforms is also up to 5%. You can as well stake SUI on liquid-staking protocols like Scallop.
Solana is a good passive income token. Solana can be staked on the POS network for 7% annualized yield. It can also be used for yield and liquidity farming on DeFi protocols on the network.
You can also explore riskier and higher-yielding opportunities like restaking and liquid-restaking. Several exchanges support Solana, including Binance, Coinbase, MEXC, and Kraken.
Ethereum POS staking offers up to 3% APY. You can purchase ETH from exchanges and stake it on Lido and other POS staking platforms. You can also stake ETH on centralized exchanges. Another way to earn passive income with ETH is to farm yield on DeFi protocols.
On-chain Cardano (ADA) staking offers 4-5% APY. ADA can be staked on personal wallets like Trust Wallet, Daedelus Wallet, Exodus Wallet, and Ledger Wallet. You can also stake Cardano on Binance and Coinbase. Also, explore passive opportunities on DeFi protocols on the Cardano network.
After learning about the most popular ways to generate passive income in crypto, there are still some risks to consider. Here are the most common challenges investors may face.
Crypto market volatility allows you to get high returns when you buy tokens at a lower price and sell them at a higher one. On the other hand, the situation may be completely reversed, leading to the loss of your investments.
If you want to create a reliable crypto passive income, invest in cryptocurrencies that are backed by robust use cases, active development, and well-established teams, as they are more resistant to volatility.
Also, it’s essential to conduct continuous market research to find new possibilities and invest in different types of crypto to reduce your portfolio risk.
In most cases, generating passive income involves making investments on third-party platforms, which, unfortunately, may be hacked. If you opt for centralized services, you’ll need to pay fees but still be able to enjoy the highest-level security measures.
Also, you can opt for decentralized platforms, which offer benefits like anonymity and the absence of third parties. However, these services are less resistant to hacking.
You certainly don’t want all your assets to disappear when a crypto platform just gets closed. The chance it happens is close to zero if you opt for a service with an excellent reputation and long history.
Unfortunately, both centralized and decentralized platforms may turn out to be scams, so thorough research is the only way to avoid losing your money.
While generating passive income in DeFi (decentralized finance) liquidity pools, you may face impermanent loss. When it happens, the value of your assets becomes lower than it was when you allocated them.
However, this loss is “impermanent” as the price may still return to the initial value due to market volatility. The best way to avoid this problem is to invest in stablecoins like USDT.
Not all countries have already legalized cryptocurrency, and it’s important to consider the situation in your area. Further, find out more about crypto tax policy. For instance, in the US, citizens have to pay up to 20% fee on long-term gains from cryptocurrency transactions.
Do you want to earn passive income with crypto ASAP? Follow these simple steps:
Of course, if you plan to start mining crypto, you also need to purchase hardware and learn the appropriate software. In case you want to start earning in E2P games, you’ll need to spend some time earning in-game assets.
Each of the discussed strategies has both advantages and drawbacks, which you should consider before making an investment to secure some passive income.
If you are a complete beginner, it’s recommended to opt for low-risk strategies like staking, as fewer risks are involved, and they allow you to learn the basics.
Also, if you are ready to reveal your personal data and pay higher fees, opt for a centralized platform, as they are typically more secure than decentralized ones.
Also, check out your local crypto legislation regarding cryptocurrency to avoid legal issues. There is a lot to consider, but with knowledge and research, you can generate a stable income without any major issues.
The sources provided below can help you with the issues you may encounter with your first crypto investments.
Premium Partners
There are strategies that allow you to invest in cryptocurrencies without facing a significant risk of losing your money. Staking, popular P2E games, and crypto lending provide opportunities for stable passive income. Nonetheless, if you want to minimize the risks even more, invest only in stablecoins and use the services provided by a reputable centralized platform.
Your passive income with cryptocurrency directly depends on the chosen strategy, the sum of the initial investment, and the coins or tokens you’ve chosen. For example, if you opt for staking Solana, you can expect to earn 6.87% of your funds per year.
Earning passive income from crypto, such as through staking or lending, is generally a taxable event. The fair market value of the crypto received is treated as ordinary income at the time of receipt. You may also incur a capital gain or loss when you later sell or exchange those earnings. Also, anyone who sold crypto, received it as payment or had other digital asset transactions needs to accurately report it on their tax return.
Undoubtedly, centralized platforms are the best for beginners who want to create a crypto passive income source. It’s better to start with Binance, which is ideal for staking, lending, and investing in NFTs and dividend-earning tokens.
Yes, you can earn passive income with as little as $1 or less. Passive income avenues like staking, airdrops, and dividend-earning tokens do not have a minimum investment amount. Note that this could vary across passive income platforms. Always verify the threshold specifications before using the platform.
Yes, it is safe to use legitimate and regulatory-compliant centralized platforms for passive income. Platforms like Binance, Coinbase, and Bybit offer significant earnings via their flexible and holder staking programs. Before using other platforms, it is recommended that you ascertain their legitimacy and security provisions.
Staking is the best way to earn passive income for crypto beginners. Staking offers assured earnings and a straightforward participation process. Airdrops are also a good option; however, eligibility and participation criteria can be complicated.
Yes, you can earn passive income without locking up your tokens. One of the ways to earn passive income without locking up your token is through liquid-staking. LSTs (Liquid-staked tokens) can be spent like normal tokens.
You can also invest in Dividend-earning tokens and receive passive earnings while holding the token in your wallet.
Staking is a low-risk passive income strategy due to the absence of impermanent losses and guaranteed rewards. However, ensure that the protocol is trustworthy to avoid losses due to technical exploitation. Another low-risk passive income strategy is dividend-earning tokens.
You can earn passive income on low-fee blockchains through onchain staking, yield farming, and through play-to-earn games. On-chain staking on DeFi protocols and Polygon POS is a good way to earn on Polygon and similar networks.
To know if a DeFi project is a legitimate passive income opportunity, evaluate the yield strategy. Find out how the project generates yield and ensure that the yield strategy is sustainable. An unsustainable yield strategy may cause a short-lived passive income opportunity or losses for participants.
DeFi protocols contribute significantly to passive income in crypto. Through programs like DeFi lending, staking, liquid staking, restaking, and airdrops, decentralized applications offer passive income opportunities to crypto investors. DeFi projects are a hotspot for passive income.
The current trends for generating passive income in cryptocurrency are liquid staking, restaking, and liquid restaking. Liquid staking lets you stake tokens and receive a liquid-staking derivative (LST) you can use. Restaking allows you to stake assets on multiple networks for more income, while liquid restaking involves staking your LSTs on other protocols to earn extra rewards.
Solana and POL (Polygon) are known to offer a strong passive income opportunity. Solana and Polygon POS staking offer up to 7% APY. Solana offers additional passive income opportunities through liquid staking and restaking.
You can also use your Solana tokens to farm yield on DeFi protocols on the network. You can also stake them on centralized exchanges like Binance and Kraken to earn more rewards.
DAILY NEWSLETTER
Your daily dose of Crypto news, Prices & other updates..
5M+ Monthly Page Views
50k+ Articles
