3 Modern Ways to Make Money on Ethereum (Without Trading)

ways to make money on ethereum

We’re talking about making money on Ethereum the proper way in 2020. Not including trading ETH. This means no faucets (waste of time), MLMs/Ponzis (like PLUS token), or shitcoin ICOs (a la 2017).

What’s happening in the world? Interest rates are negative in Europe. US 10 year Treasury notes have a yield of 0.6%. Singapore banks slashed rates on savings accounts. What kind of annual returns can we expect on Ethereum?

Standard disclaimer: I am not your financial advisor.

How to Make Money on Ethereum

Here are 3 methods, all intended to reward you in exactly the way these blockchain applications were designed to.

  1. Ethereum 2.0 Staking
  2. DeFi Lending
  3. Liquidity Mining

Lots of great things happening for Ethereum in the second half of 2020 and early 2021. Let’s show you some of these trending ideas while it’s still relatively early.

Method 1: Ethereum 2.0 Staking

Ethereum is transitioning from a proof-of-work model to proof-of-stake. It’s been talked about for years, but has always run into delays. And supposedly, it’s finally happening! Vitalik Buterin, co-founder of Ethereum, thinks it’s possible for a late 2020 launch.

For those interested in how to make money, ETH2 makes earning a passive return from staking quite accessible. Run your own node with a minimum stake of 32 ETH (1 ETH approx. USD 240) to become a validator, which entitles you to staking rewards, as your incentive to verify transactions.

How much can you expect to make? Depending on the source, you’ll get a range of different estimates. I’ve seen Cointelegraph estimate it to be between 4-10%, while online calculators Staking Rewards and Ethereum Price both put it as high as 14%.

Method 2: DeFi Lending

Decentralised finance has been a huge buzzword in crypto since 2019. And these DeFi projects are built on the Ethereum blockchain. Already have crypto? Instead of keeping it locked away in cold storage where it earns nothing, use your crypto portfolio to generate annual returns by lending it out.

Deposit your money in smart contracts and watch interest accruing in your account in real time. Try lending platforms such as Aave or Dharma which can act like savings accounts. On Aave you could at one point even earn annual interest of 10% on your dollars (via BUSD, a stablecoin), which is ridiculous even in a terrific economy. Of course, consider the risk you must be willing to assume.

Or, you can also lend crypto to margin traders on Fulcrum, and make about 2+% per year.

Method 3: Liquidity Mining

Compound (COMP) and Balancer (BAL) protocols started distributing governance tokens to their users a few weeks ago. Compound is a lending and borrowing platform like those mentioned in the earlier category, while Balancer is a liquidity management and market maker tool.

Both Ethereum-based startups Compound and Balancer created huge curiosity around the liquidity mining model of user incentivisation. Basically, contribute assets to their platform (provide liquidity) and use it as it’s intended to be used, and then earn a bonus distribution (receive mining reward) of their platform governance tokens so you can have a say on future decisions on the protocol.

OK, so what money is there to be made? Everyday 2,880 COMP will be given out to users. Everyday 20,700 BAL will be given out to users. COMP and BAL both exploded in price in June when they began trading. They are worth about $180 and $10 respectively now. It created a lot of wealth for the largest users of Compound and Balancer when these tokens began trading on exchanges.

Learn how to make money on Compound protocol here.


So if you thought blind buy-and-hodl speculation is the key way to make money on Ethereum, 2020 and 2021 should change your mind. Early adopters are already earning. The industry has matured and evolved considerably since 2017. Try out some of these methods mentioned above, and you’ll realise how versatile Ethereum actually is. We’re still early, but that doesn’t mean you need to sit around and wait.

Learning to make money in crypto and DeFi. Everyone’s gotta start somewhere. Adventures in yield farming, written by a wrestler. How hard could it be?

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