What Can You Do To Make Passive Income From Solana?

By Patricia Patterson On Feb 25, 2024

Check out the tips on how to make money from Solana without doing anything.

What is Solana? It is one of the most creative and quickly growing blockchains in the crypto world. It works well for many protocols and decentralized apps (dApps) because it has low fees, can grow easily, and transfers happen quickly.

Also, Solana has its own token called SOL that powers the network and pays users for keeping it safe and checking it. In this post, we’ll look at some of the ways you can stake, lend, provide, and borrow from Solana to make passive income.

Staking SOL

One of the easiest and most common ways to make passive income from Solana is to stake your SOL coins. When you stake, you lock up your tokens in a validator node so that deals can happen and the network stays safe.

In exchange for your involvement, you will be given tokens (SOL) that are equal to the size and length of your investment. At this time, Staking Rewards says that staking SOL has a yearly percentage yield (APY) of about 7.5%.

It’s up to you and your level of technical knowledge what method you choose to stake your SOL tokens. You can either give your tokens to a validator that already exists, which is easier and more handy, or you can run your own validator node, which requires setting up some hardware and software.

Using third-party services like Coinbase, Lido Finance, or Marinade Finance is another way to do liquid staking. With liquid staking, you still get staking rewards, but you also get a token equal to the stake that you can trade, send, or spend in other dApps.

Also Read: 10 Best Crypto Coins In Which You Can Invest Every Month In 2024

Providing Cash Flow

Another way to make passive income with Solana is to provide liquidity to the network’s automatic market makers (AMMs) and decentralized exchanges (DEXs).

Users can trade coins on these platforms without going through a middleman because they use liquidity pools that are backed by liquidity providers (LPs). Liquidity provider tokens (LPTs) show that an LP owns a stake in the pool. LPs that put their LPTs into these pools get a cut of the trading fees.

Many people like the DEXs and AMMs Saber, Raydium, Orca, and Serum on Solana. In terms of benefits, costs, and LP incentives, they are all different. For example, Serum is a cross-chain, decentralized market that makes limited orders and quick settlement possible. Through its connection with Serum, an AMM called Raydium lets LPs do yield farming and staking.

Orca is an AMM with low slippage that is easy to use and lets you rebalance and set changeable prices. Saber is a market that lets you buy and sell wrapped tokens and stablecoins. This makes arbitrage and cross-chain liquidity easier.

Getting And Lending Money

Solana has a third passive income stream that comes from making tokens and borrowing money on loan platforms and money markets. People can take tokens from other users and pay interest on them, or they can lend their tokens to other users and get interest on them. Smart contracts are used to back up the loans and make sure they are paid back. Interest rates are set by supply and demand.

Solend, Port Finance, and Jet Protocol are some of the best places to borrow money and give it on Solana. The Solend non-custodial algorithmic lending protocol lets you get flash loans with both variable and set interest rates.

Port Finance is a decentralized, capital-efficient loan system that makes it easier to cross-margin trade, aggregate yields, and stake liquidly. The Jet Protocol is a quick and cheap way to give money that makes risk management, collateral optimization, and changing interest rates easier.

Solana is a cutting-edge blockchain that is growing quickly and gives people a lot of ways to make passive income. You can stake, sell, supply, and borrow your Solana tokens, among other things, to make them work for you and create a steady stream of income. That being said, you should always do your study and know the pros and cons of each option.

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