How to Earn Crypto Rewards

From staking to lending, here are the five best ways to grow your crypto.

As the crypto economy continues to grow and expand, there are more ways than ever to earn rewards for holding crypto, learning about crypto, or interacting with decentralized finance (DeFi) applications. Most of these opportunities can be found on the main Coinbase app or website, while the last requires using a wallet with a built-in DeFi browser, such as Coinbase Wallet. We’ll walk you through some of the best ways to grow your crypto through rewards.

This content is not exclusive to UK users, and UK users may not be eligible for these rewards.

1. Coinbase Learning Rewards

The easiest way to start earning crypto rewards on Coinbase is through Coinbase Earn. In exchange for learning some crypto basics (usually by watching a short video), you get some to try out for yourself.

Since Coinbase Earn launched in 2018, users have received over $100 million in cryptocurrencies, including 0x, Basic Attention Token, Zcash, Stellar Lumens, EOS, Dai, Tezos, Orchid, Compound, Celo, Nucypher, and Graph.

2. Stake some of your cryptocurrencies

Many cryptocurrencies now use a “proof of stake” consensus mechanism, which is a decentralized network’s way of ensuring that all transactions are verified and secured without the involvement of banks or payment processors.

With this cryptocurrency, you can earn rewards simply by contributing to the security of the network—“locking” some of your holdings in a staking pool for a certain period of time. This is a great option if you plan to hold cryptocurrencies for the long term, and instead of leaving them idle, you can use them to earn income.

As of June 2021, eligible users can stake Tezos, Cosmos, or Ether (ETH) through the main Coinbase app or website and earn up to 6% APY (depending on the type of asset staked). Visit coinbase.com/staking for more information.

3. Convert USD to Stablecoins

One potential downside to staking rewards is that they are paid in native cryptocurrencies, which can be volatile. But simply by buying and holding stablecoins pegged to the U.S. dollar, such as Dai and USD Coin (USDC), you can earn rewards.

As of June 2021, you can earn 2.00% APY just by holding DAI in your Coinbase account. Holding USD Coin (USDC) earns 0.15% APY, and you can earn more by lending USDC (see tip #4).

4. Lend some crypto through CeFi

It’s sometimes not easy to earn a decent yield holding USD in a traditional savings account. But stablecoins make this proposition possible. More and more centralized finance (CeFi) products have emerged that offer attractive returns for holding some crypto in the form of stablecoins. Coinbase customers looking for low-risk investments can earn a 4.00% annual yield by holding USDC. Crypto deposits are not insured or guaranteed by the FDIC or SIPC.

5. Lend some crypto through DeFi applications

If you are willing to take on higher potential risks for higher returns, try lending some crypto through DeFi applications. (DeFi is still an emerging technology, so if you decide to try these protocols, make sure you don’t invest more than you can afford to lose.)

DeFi enables transparent peer-to-peer lending with potentially higher yields than traditional financial products. Investors who provide crypto to DeFi lending protocols are rewarded when they lend to borrowers. You need to have a cryptocurrency wallet that is compatible with DeFi applications. Coinbase Wallet (a separate product from the main Coinbase app that can be used by anyone, not just Coinbase customers). With Coinbase Wallet, you can try lending out some of your crypto through DeFi protocols like Compound or Aave (the easiest way to get started is with stablecoins).