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The cryptocurrency world continues to evolve at a rapid pace. One of the most exciting areas of growth is in the decentralized finance (DeFi) sphere. Throughout the history of cryptocurrencies, investors have been attracted by the possibility of generating profits from their trades. In addition to trading, profits have come from staking, mining and rewards. However, the complexities of some of these options have been prohibitive for small and new investors. Now, reflection tokens present investors with an opportunity to earn passive income by holding their tokens.
Reflection tokens are also known as reward tokens, because they pay token holders a portion of collected fees simply for holding them through a static reward system. Their functionality provides investors with a source of passive income.
A portion of the transaction fees assessed on cryptocurrency transactions can be passed on to investors holding reflection tokens. The process is completed through a reflection mechanism that uses smart contracts to distribute the tokens to all investors in the liquidity pool. While this may seem like a complicated process, it’s simpler than either mining, staking or yield farming. Thus, crypto reflection tokens make it easier for investors of all skill levels to generate passive income from their holdings.