I am going to take a look at coins that pay dividends. Dividends, for the purpose of this article, will refer to coins that pay a portion of revenues/profits to holders of the coin.
This is not to be confused with staking or running a master node, which is a way to hold coins in a special staking wallet, to support a POS/DPOS (proof of stake/delegated proof of stake) style blockchain in order to receive newly minted coins akin to mining/block rewards in a POW (proof of work) style blockchain.
These coins are a good way to generate passive income from your cryptocurrency investment. Coins of this type should be a small portion of any well-balanced and diversified cryptocurrency portfolio. As always, before investing, do your own research, altcoins are inherently riskier than the well-established larger market cap coins in the top 10.
Another thing to consider when investing in these coins is the unclear regulatory status regarding their legal classification. Will they be deemed securities? In my opinion, they will be, as the SEC, CFTC and other regulatory agencies, have made public statements to that effect. This may have a strong impact on market value.
Coins that pay dividends
NEO is a blockchain project based in China. It has been called the “Chinese Ethereum” due to its use of smart contracts and similarities in the goals of both platforms.
- NEO allows holders to earn Gas tokens, the token used to execute smart contracts on the NEO platform, simply by holding NEO in their wallets.
- NEO holders can earn 5% annually in passive income simply by holding NEO.
- They don’t even need to have their wallets online 24/7 like POS coins often require.
- NEO tokens are similar to shares of the neo blockchain.
#2 Kucoin Shares
Kucoin is a cryptocurrency exchange that has a profit sharing business model, that rewards holders of Kucoin shares, with a portion of the fees that the exchange earns. Kucoin offers a wide variety of exclusive and exotic trading pairs, and also offers well-known crypto trading pairs.
- Kucoin charges a flat fee of 0.1 percent, on all trades. They use 50 percent of the fees collected to pay dividends to token holders, and 40 percent goes the affiliate program to pay commissions to users for referrals the remaining ten percent goes to the Kucoin platform itself.
- Kucoin’s referral program has been a key contributor to its success. Users can earn affiliate income by promoting the Kucoin platform itself.
- The Kucoin referral program has several tiers of commissions, the tiers give commissions to you for every referral, then every referral from your referral’s referrals, underneath, creating a commission upstream 3 layers deep.
- You can promote Kucoin and get paid, then get paid again as the people you promoted to, pay fees on the platform when they trade, which you’ll receive a portion of as a Kucoin Shares holder.
Cryptobridge is a decentralized exchange (DEX) that launched in 2017. It uses a similar model to Kucoin Shares in that it has a revenue-sharing model, that distributes 50% of the fees earned by the exchange with token holders.
- Cryptobridge’s fees for crypto-to-crypto trades: 0.05% – 0.20%
- 50 percent of the fees collected are distributed to token holders as dividends.
- Cryptobridge is a decentralized exchange unlike Kucoin.
- Cryptobridge has made its eleventh payout to token holders
- The most recent payout was 8.56821 BTC or approximately $73,275.33192 split among the token holders
Waves is another smart contract platform, similar to Ethereum. It allows token holders to lend Waves tokens for interest, so they can receive passive income. Waves also does airdrops to Waves token holders rewarding them with more Waves tokens. Waves is soon to release non-Turing complete smart contracts on its main network and already has a functioning decentralized exchange (which I use sometimes). Waves also allows users to launch their own token very easily and cheaply.
- You can earn up to 5% per year on your WAVES balance.
- You lease your WAVES to a POS “mining” pool.
- Waves allows anyone to launch a coin easily, quickly and securely.
- The Waves DEX allows you to trade popular cryptos and alts, with no limits.
#5 Cryptopia Fee Shares
Cryptopia the Kiwi exchange has also entered the fray with a profit-sharing token. The CEFS token was initially distributed to shareholders but now trades on the exchange.
- Cryptopia tokens distribute 4.5 percent of the total fees on the exchange.
- the 4.5 percent is split among 6300 CEFS tokens in total, and more will not be issued.
- Payments issued at the end of the month to CEFS token holders.
Iconomi is a digital asset management platform. It allows novice and experienced traders to create digital asset arrays (DAA) and get access to digital assets and liquidity. They are also doing a token buy-back and token burn, like Binance. The Iconomi platform is using the realized profits from the platform to buy-back and burn tokens rather than pay dividends in an effort to avoid regulations. It may be a popular tactic but I think they will still be classed a security.
- Iconomi plans to regularly use the profits to buyback tokens.
- Iconomi allows the user to launch their own digital asset array and act as a manager of that array.
- Other investors can choose which digital asset arrays they wish to invest in.
Coss is another exchange with a profit-sharing model, similar to Kucoin Shares, and Binance. Coss is an ERC-20 token on the Ethereum platform. They are not quite as popular as platforms like Binance, or Kucoin Shares, but this means there is tremendous potential for growth if they see a similar rise in popularity and increase in volume. Coss does not have the same volume as either of the other two exchanges so dividends may be significantly lower.
- The fees begin with 0.2% of the taker and maker’s fee, and end at 0.04% derived from transactions; 50% of this revenue is shared with the DAO token owners.
- 50% of the revenue from the Coss merchant payment gateway is shared with the DAO token owners.
- Coss also has an affiliate program but it only gives you discounts on fees while using the platform, rather than actual income.
- Coss has way cheaper fees than similar platforms.
PayFair is an online escrow service and merchant fiat/crypto gateway as well as crypto exchange. It’s an ERC-20 token, which recently began trading on exchanges. PayFair allows you to stake 10,000 coins in what they call a “trust node”.
- 80% (in case of a Non-escrow deal) and 40% (in case of Escrow deal) of PayFair fees go into compensating trust node operators.
- Trust nodes do not need to be in a wallet that’s connected online 24/7
- PayFair also allows the user to run escrow nodes in which they can earn PayFair tokens, although this is not passive income, users must play an active role.
- Escrow nodes resolve disputes.
- Escrow-node who made the decision — 50% of fees
These coins are solid dividend paying coins, but there are probably many, many more profits sharing coins out there. Let me know if you have any other suggestions on coins with great dividends for passive income.
Disclosure – I am not personally invested in any coin listed in this article except a tiny amount of Waves. I have used the Waves DEX.