Most people buy crypto and it sits in a wallet earning nothing.
Here's how you can generate passive income in crypto 🧵
Staking
Staking is where you lock tokens to help secure a blockchain. You earn rewards in return.
→ ETH through Lido: 3-5% per year
→ SOL through JTO: 6-9% per year
→ You hold the token the entire time
→ Your keys. Your wallet. Yield on top.
The catch: rewards are paid in the token itself. If ETH drops 20%, your 5% yield is worth less in dollar terms. You need to be comfortable holding the asset long term.
**Lending**
Lending is where you deposit crypto into a protocol. Borrowers pay interest. You collect it.
→ Aave: the largest lending protocol. Battle tested since 2020.
→ Compound: similar model. Lower rates, strong track record.
→ Maple: institutional focused. Typically 6-10% per year.
→ Rates fluctuate with demand. Higher demand for borrowing = higher yield for you.
The catch: smart contract risk. If the protocol gets exploited, your capital is exposed. Stick to protocols that have handled billions without incident.
→ SOL through JTO: 6-9% per year
→ You hold the token the entire time
→ Your keys. Your wallet. Yield on top.
The catch: rewards are paid in the token itself. If ETH drops 20%, your 5% yield is worth less in dollar terms. You need to be comfortable holding the asset long term.
Lending
Lending is where you deposit crypto into a protocol. Borrowers pay interest. You collect it.
→ Aave: the largest lending protocol. Battle tested since 2020.
→ Compound: similar model. Lower rates, strong track record.
→ Maple: institutional focused. Typically 6-10% per year.
→ Rates fluctuate with demand. Higher demand for borrowing = higher yield for you.
The catch: smart contract risk. If the protocol gets exploited, your capital is exposed. Stick to protocols that have handled billions without incident.
**Stablecoins**
Stablecoins like USDC are pegged to the US dollar. No token price volatility.
→ Aave stablecoin pools: 5-8% per year
→ Syrup (by Maple): around 8% per year on stables
→ Rewards paid in stablecoins. What you see is what you get.
This is the closest thing to a high yield savings account in crypto. You are not exposed to Bitcoin or ETH price swings.
The catch: you are trusting the stablecoin maintains its peg and the platform stays solvent.
The real maths
Here's what it actually takes to generate meaningful passive income:
→ $100K at 8% = $667/month
→ $250K at 8% = $1,667/month
→ $500K at 8% = $3,333/month
→ $1M at 8% = $6,667/month
→ $1.5M at 8% = $10,000/month
That last number is the one everyone wants. The number nobody says out loud is that you need seven figures deployed to get there.
**Tax**
Yield income is generally treated as regular income, not capital gains. That means a higher tax rate in most jurisdictions.
$10K per month gross is not $10K in your pocket. Talk to your accountant before you build your target number.
How to manage risk
→ Split across multiple protocols (Aave, Lido, Maple, Syrup)
→ Split across multiple chains (Ethereum, Solana)
→ Never put more than 20-30% of your crypto in a single protocol
→ Use a hardware wallet where possible (Ledger supports staking natively, but they take a small fee vs going direct)
The realistic range
Passive yield in crypto sits between 5 and 15% per year. Not per month. Per year.
It is not exciting. It will not make you rich overnight. But for serious capital sitting idle, it is significantly better than earning nothing.
Full breakdown with protocol walkthroughs in the video below 👇