Looking for ways to earn passive income in crypto, but terms like "impermanent loss" and "AMM" make your head spin? Relax. This guide is your personal navigator to the world of crypto yields. We'll break down how these strategies work, where the real returns are, and where the hidden traps lie.
What it is: In short, staking is like a crypto savings account. You lock up your coins to help secure a network, and in return, you earn rewards. The yield from staking is straightforward and easy to understand.
The Real Numbers (November 2025):
Pros: Predictable returns, minimal effort.
Cons: The yield isn't astronomical, and your coins may be locked for a set period.
What it is: With liquidity pools, you become a mini-currency exchange. You deposit a pair of assets (e.g., ETH and USDC) into a collective pool, and you earn a percentage of the fees from every trade that happens within that pool.
The Real Numbers:
The Main Enemy: Impermanent Loss (IL).
This is the most complex but critical concept to grasp.
Pros: Potentially high yields from AMM pools.
Cons: The risk of impermanent loss, and the need to monitor the pool's performance.
What it is: These are ready-made investment solutions offered by exchanges or DeFi protocols. For example, "Deposit USDT for 30 days and get a guaranteed 8% APY." They often come with some form of capital protection.
The Real Numbers: 4–12% APY for conservative strategies, up to 20%+ for more aggressive ones.
Pros: Clear terms and predictable returns.
Cons: Your funds may be locked up, and you need to read the fine print carefully for any hidden conditions.
While most beginners simply deposit funds into a pool and hope for the best, professional market participants actively manage their liquidity. They don't just hope to collect fees; they shape the market by placing strategic buy and sell orders.
This is a more complex but far more stable strategy. It used to be accessible only to large funds. Our mission at Coinrate is to make professional-grade strategies like market making and liquidity management understandable and accessible. Our tools provide analytics on market depth and capital flows, helping you make data-driven decisions about where and how to deploy your liquidity for maximum efficiency.
Passive income in crypto isn't about finding a magic "get rich quick" button. It's about building a portfolio of strategies that match your risk appetite.
By studying the available passive income tools and starting small, you can diversify your approach. This is the foundation of the most effective passive income strategies.
Q: What's more important: APY or liquidity?
A: Liquidity is just as important. A high APY is meaningless if you can't withdraw your funds quickly and without major losses during a market downturn.
Q: I'm a beginner. Where should I start?
A: Start with staking on a major PoS network. It's the simplest and most straightforward method. As you learn more, you can gradually add other instruments.
Q: How can Coinrate help me?
A: Once you've mastered the basics, Coinrate helps you level up. Our tools and guides teach you to analyze liquidity like a professional and use more advanced, stable-yield strategies like market making.
This content is provided for informational purposes only and does not constitute financial advice. You should perform your own due diligence and assess the risks before making any investment decisions.
An expert-driven blog by Sergey Smotrov — a leading voice in crypto and investment, and CEO of Coinrate. Join our community — follow us on social media for exclusive updates.
