Problems and solutions of the crypto passive income industry
|The last couple of years has seen the rise of various innovative trends in the crypto space. First, we've witnessed the segue from the proof-of-work consensus mechanism, which has been described as inefficient and inherently flawed by a ton of experts, to the energy-efficient proof-of-stake.
Secondly, the introduction of decentralized finance (DeFi) protocols has dominated talks on crypto investments and passive income.
While these trends open up tremendous opportunities for investors to earn passive income either by staking their assets or by lending them out via any of the DeFi protocols, there's a tiny bit of a problem.
According to DeFi Pulse, the value of assets locked in DeFi protocols has grown from $900 million in 2019 to $64.2 billion (at the time of publication). Albeit identified as one of the most viable passive income sources in the crypto space, a ton of problems abound.
First, the current crypto passive income market is incapable of sustaining itself in the long run. Additionally, the market is unable to maintain financial viability.
The idea behind DeFi protocols as a perfect source of passive income is to lend staked or locked up assets for a reward. While this is probably working at the moment, what happens when there are no more lenders? Probably a fall in the structure which could mean zero rewards for staking assets?
Secondly, the unavailability of a real use case besides financial transactions is another major sticking point that if left unsupervised could impede the growth of this incipient billion-dollar trend.
Staking assets for rewards is not a sustainable investment or financial plan, begging the question; what is the future of the crypto passive income market? “A structure that will drive passive income through economic activities and real use cases”
Well, the only viable solution is a structure that will drive passive income through economic activities and real use cases that create substantial based-on-demand value.
Through holding and tokenizing, the crypto passive income market may welcome a paradigm shift in how rewards are earned.
With the crypto passive income industry predicted to exceed the $11.5 billion mark according to Statista, there's an opportunity for further growth.
A sustainable and financially viable market structure may well be the big push needed for the unprecedented growth of the emerging industry.
Passive Income (PSI) is a perfect example of this crypto income platform. Designed with a sustainable system and structure, PSI has become a major player in the crypto passive income industry, pioneering a paradigm shift in the development of a network with real use cases outside of financial transactions.
For example, the PSI integrates Holding as part of its passive income viable plans. Frictionless, this core pillar of the advanced passive income industry will run in a way that PSI token holders will earn transaction fees awarded by a smart contract.
The network will charge a 1% transaction fee that will be shared amongst PSI holders, pioneering a switch in how passive income is earned in the crypto industry.
Integrating a “no claiming fees” feature, the Passive Income platform seamlessly manages the reward claiming process. With most crypto passive income platforms built on Ethereum blockchain, investors would need to pay for gas if they're to receive earned rewards. This poses a huge problem for most as the cost of Ethereum gas continues to soar.
PSI, fortunately, settles all gas fees, enabling investors to receive rewards in a frictionless manner. Additionally, all investors are required to do is hold PSI in their wallets and they can earn rewards in the form of transaction fees. No staking or lending is required, simply holding a specific amount of the PSI coin in a wallet is enough to earn passive income.
Conclusion
Albeit passed its embryonic stage, the crypto passive income industry is facing a ton of problems that are capable of impending imminent growth.
If left unattended, this budding industry may collapse as it is currently not sustainable. The introduction of various innovative projects and integration of viable structures and systems could well save this industry from possible stagnation.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.