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Learn to navigate the crypto bear market with the 10 best crypto passive income strategies relevant in 2023 and beyond.

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 and other prominent decentralized exchanges (

s) in 2022, the crypto market’s liquidity and activity has certainly taken a hit. With a relatively bearish market over the past few months, market participants are seeking not only the next big thing to invest in, but also potential avenues of passive income.

Passive income is generated from activities in which an individual doesn’t have to actively participate. One common example is rental properties. Another, 

 (“hold on for dear life”), is widely employed in which individuals buy cryptocurrencies they believe in and wait for the price to appreciate. However, given the volatile market conditions, HODLing can hardly be considered passive income since cryptocurrency can perpetually decrease in value.

In the current landscape, what are some of the ways to still earn passive income while maximizing profits from participating in the cryptocurrency market? 

Let’s take a look at the top 10 cryptocurrency passive income strategies.

 is a term that usually refers to locking your funds with a 

 (PoS) blockchain platform to help validate transaction blocks. In exchange for staking your funds, PoS blockchains pay you rewards in their native cryptocurrency.

Staking is one of the most basic and popular ways to earn passive cryptocurrency income. By staking your funds, you not only 

 but also help secure the network against spam and malicious threats.

On many PoS chains, you don’t have to run a full validator node to participate in staking. On chains which use a 

 (DPoS) consensus mechanism, any node may use their cryptocurrency to delegate their staking rights to a full validator of their choice through transparent voting and stake allocation.

Your delegated full validator node will process transaction blocks and share the staking rewards with you based on the proportion of your contribution. The delegated mode is a very affordable way for just about any crypto user to derive passive income from staking.

Which Blockchains Support DPoS and Delegated Staking?

On some blockchains, delegated staking isn’t supported. Direct staking on these platforms is only possible by setting up a full validator node, with the minimum amount you have to stake often substantial. For example, 

 requires a minimum commitment of 32 ETH (close to $60,000 as of Apr 12, 2023) to set up a full validator node. 

However, depending on the specific chain, there might be service providers who can help you participate in staking even on platforms without the delegation option. Decentralized apps (

 (RPL) offer Ethereum staking services without the onerous requirements of running a full validator node on the chain. These providers let you participate in Ethereum staking beginning with minimal amounts, and even allow you to maintain capital efficiency with access to liquid staking derivatives (

) so you can continue to participate in decentralized finance (

 is the practice of depositing your cryptocurrencies into yield-generating pools on DeFi platforms to earn interest. It’s a popular way to earn passive crypto income. However, given the wide variety of DeFi protocols and pools, it may require more research and active management of funds 

 because the returns given by such protocols tend to fluctuate based on the number of participants. Hence, at times it may not be too profitable for yield farmers (individuals that participate in yield farming).

Yield farming may sometimes require users to participate more actively to select the kind of protocols they wish to farm. Alternatively, users can choose to participate in liquidity pools run by various yield protocols. These are known as yield aggregators, automatically investing users’ deposits across a variety of income-generating DeFi sources. Aggregators remove the need for users to actively shift and allocate their funds across different yield protocols, while still being able to earn interest for depositing funds. Examples of such yield aggregator protocols are 

Another popular form of cryptocurrency passive income is 

, in which users provide liquidity to cryptocurrency swap pools on DEXs. Once they’ve provided liquidity, users are known as 

 (LPs) and are issued an LP token, typically a synthetic asset which may be reinvested to other platforms to earn even higher yield. 

Users who participate in liquidity mining are depositing their cryptocurrencies into pools that represent a pair of cryptocurrencies (e.g. ETH/DAI). These pools make it possible for users to swap their cryptocurrencies. 

In most cases, you’ll deposit an equal value of both cryptocurrencies to become an LP (e.g., $1,000 worth of ETH and $1,000 worth of DAI), which in turn helps to maintain adequate liquidity for 

When the exchange has deeper liquidity, those using the AMM DEX may receive the cryptocurrency of their choice at better rates. To reward LPs for this, a proportion of the swap fees paid by users are rewarded to LPs, to be distributed based on the share of funds in the pool contributed by each LP.

How to Earn Passive Income Through Liquidity Mining

Keen on earning passive income from liquidity mining? 

 is a good way to start. Head over to kick-start your passive income!

The largest AMM DEX to help popularize the liquidity pool model (as well as one of the oldest) is 

 (UNI). Other prominent platforms on which you can earn passive income from swap pools include 

 (SUSHI). One of the most prominent DEXs to catch the market’s attention in 2022 was 

 on Arbitrum, with its TVL skyrocketing as a result of both its innovation and the growing market on Arbitrum.

Below is a graphic of the top 10 DEXs by 

 is another popular avenue for users who want to earn passive income. You simply deposit your cryptocurrencies into protocols to be loaned to borrowers. In return, this loan will be rewarded in the form of interest. Two main types of protocols lenders can interact with are 

Let’s start off with the most common type of pool: Decentralized lending and borrowing protocols. You deposit your funds into these pools as a lender to the protocol, and earn interest from your investment. The 

 (COMP). There are also lending protocols on other chains, including 

Below are the 10 lending and borrowing platforms by TVL as of Apr 12, 2023.

Most of the well-known decentralized lending platforms algorithmically maintain enough liquidity on their platforms, based on the amounts loaned and borrowed and collateral provided for the borrowed funds. With proper transparency, this ensures that the funds users have lent to the protocol are safe, and that the decentralized lender always has enough liquidity to meet its loan obligations.

Users can also choose RWA lending protocols where their deposits will be borrowed by real-world businesses that generate cash flow. These businesses are typically whitelisted by a team of auditors to ensure their credibility before they can qualify as borrowers. Hence, lenders have more assurance, given that the risk of default is reduced through such checks. Similarly, lenders are rewarded with the interest fee.

Prominent protocols within this vertical are Goldfinch (GFI), 

Several CEXs and other platforms specializing in financial crypto services offer interest-bearing crypto accounts, which are quite similar to standard interest-bearing fiat accounts at banks. Basically, the crypto funds that you deposit will be used by the platform to lend, stake or invest, with the profits earned paid to you as interest.

, which provides great staking rewards as well as seasonal exclusive offers. Do check it out!

Bybit Savings is just one of the many cryptocurrency investment products under 

. This platform is an integrated cryptocurrency asset management product from Bybit that allows you to access a variety of passive income generation opportunities.

Bybit Earn offers a wide array of crypto investment services: Depositing your funds for flexible periods to earn interest (Bybit Savings), liquidity mining, earning higher returns in low-volatility markets (Dual Asset) and staking (Launchpool and 

Bybit Earn helps you access all of these cryptocurrency income generation opportunities in one place. The services within Bybit Earn are tailored to the needs of all types of investors, from beginners to hardened yield farmers sporting calluses from years of crypto harvests. So don’t worry if you’re a beginner in the cryptocurrency space — because Bybit Earn offers a simple onboarding experience for you to kick-start your journey.

on blockchain platforms is a great way to earn crypto income. However, the typical mining operation requires you to purchase expensive hardware to mine crypto profitably. 

 allows you to participate in crypto mining without the need for such equipment. This removes the technical expertise associated with mining and allows the broader market to participate, earning themselves a passive income.

With cloud mining, you pay a regular monthly or yearly fee to a service provider for the opportunity to “rent” their mining resources. In exchange for this fee, the service provider mines crypto using the resources you’re renting and pays you a proportion of the mining rewards. One of the most popular cloud mining service providers is 

Dividend-earning tokens are cryptocurrencies that have some regular dividend rewards for their holders built into the token’s functional mechanism. For example, the largest dividend-earning crypto by market cap, 

 (VET), generates dividends in the form of another token on a related platform, Thor (VTHO). The more VET you hold, the more VTHO rewards you earn. 

Another example would be KuCoin Shares (KCS), whose KCS holders receive a share of the transaction fees earned by the KuCoin exchange. Distribution is proportional to the amount of KCS held by users.

9. Crypto Affiliate Programs & Crypto Referral Programs

 have been an important part of companies’ marketing strategies for decades and have received a significant boost with the arrival of the internet. Now, a variety of websites and crypto platforms have adopted the affiliate marketing model based on crypto. By referring a user to these websites and platforms you can earn crypto income.

If you run a blog with a good number of regular visitors, or if you’re a social media influencer in your niche, crypto affiliate programs might be a great way for you to earn passive income. Some of the most popular crypto affiliate programs in the industry are offered by 

Other protocols have also kick-started their 

, allowing users to receive discounts, rebates and rewards. Examples include 

 is the distribution of a protocol's native cryptocurrency to its community. A prominent example would be the recent 

 (ARB) airdrop, in which the ARB token was distributed to users who have interacted with the 

 network (including building bridges and DApps on top of Arbitrum).

Just by completing a few steps, users may qualify for an airdrop. To track upcoming airdrops, use resources such as 

Advantages of Earning Crypto Passive Income

The opportunities above are great ways for a cryptocurrency investor to generate passive income. Primary advantages include:

Disadvantages of Earning Crypto Passive Income

In addition to the advantages of earning passive cryptocurrency income, it comes with some risks and disadvantages as well. These include:

The advantages of cryptocurrency passive income are clear, especially in the current bear market. In fact, even those who prefer to be actively involved in crypto trading would do well to try and allocate some of their capital to passive income streams.

However, when considering any potential opportunity carefully, research the market and the specific platforms you’re considering. The nontrivial number of scams and project liquidations make this due diligence an important aspect of your overall passive crypto investment strategy.

Top 10 Crypto Passive Income Strategies of 2023

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