As the cryptocurrency ecosystem continues to expand, there are now numerous ways to earn rewards through crypto investments, education, and interactions with decentralized finance (DeFi) applications. Most of these rewarding opportunities are conveniently accessible within the main Coinbase app or website. However, some may require a wallet that supports a built-in DeFi browser, such as Coinbase Wallet. Here’s a guide to some of the most effective methods for growing your crypto through rewards today.
Note: This information may not apply to users in the UK, as some rewards may be restricted in that region.
1. Earn Rewards with Coinbase Learning
One of the simplest ways to start earning crypto rewards on Coinbase is through Coinbase Earn. By engaging with educational content about various cryptocurrencies—often in the form of short videos—you can earn a selection of these assets to try for yourself.
Since its inception in 2018, Coinbase Earn has distributed over $100 million in crypto rewards, including assets like 0x, Basic Attention Token, Zcash, Stellar Lumens, and more.
2. Stake Your Crypto Assets
Many cryptocurrencies operate on a “Proof of Stake” consensus mechanism, allowing you to earn rewards by contributing to network security. By locking a portion of your holdings in a staking pool for a set period, you can earn rewards while holding onto your investments.
Through the main Coinbase platform, eligible users can stake assets like Tezos, Cosmos, or Ethereum, potentially earning up to 6% APY, depending on the specific asset. For more information, visit coinbase.com/staking.
3. Convert Your Dollars to Stablecoins
While staking rewards are often paid in the volatile native cryptocurrency, you can opt for dollar-pegged stablecoins like Dai and USD Coin (USDC) to earn steady rewards.
As of June 2021, holding Dai in your Coinbase account can yield 2.00% APY, while USD Coin can earn you 0.15% APY. Additionally, you can increase your earnings with USDC Lending (see tip No. 4).
4. Lend Your Crypto through CeFi
Traditional savings accounts often fail to provide substantial yields. However, stablecoins present an attractive alternative. A growing range of centralized finance (CeFi) products offer competitive yields for crypto holdings converted to stablecoins.
Coinbase customers can start earning 4.00% APY on USDC deposits, though it’s important to remember that crypto deposits aren’t insured by the FDIC or SIPC.
5. Explore Lending with DeFi Apps
If you’re open to higher risks for the potential of greater returns, consider lending your crypto through DeFi applications. While this sector is still emerging, it offers transparent, peer-to-peer lending options that could yield higher returns than traditional financial products.
To participate in DeFi lending, you’ll need a crypto wallet compatible with DeFi apps. Coinbase Wallet, a separate service from the main Coinbase app, allows you to experiment with lending your assets, starting with stablecoins, through platforms like Compound or Aave.
By leveraging these strategies, you can maximize your crypto holdings and make your investments work harder for you.
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