As the cryptocurrency market enters a new bull run there will be many trades made and many profits collected. With the increased activity and amount of people engaged, it becomes increasingly more difficult to choose which crypto projects to invest in. Many people will have a hard time following the trends and catching the waves before they explode. Either they will spend a lot of time positioning themselves for the right projects or they will end up buying high and selling low. A solution to this could be to focus on projects that give passive income. There are many ways nowadays to earn passive income, whether it is through staking or getting revenue from fees on trading bot projects for example.
Staking
Staking has been proven to generate a pretty reliable cash flow, but has become more and more like a standard savings account from a bank (except for the capital gains which does take some time to analyze when to buy and when to sell though, unless your strategy is to hold).
Revenue from trading bots
Revenue from fees on trading bots seems like the more profitable option for this bull run as there are a lot more people involved in the crypto market. More people means more transactions, which again means more fees collected from trading bots. There are a lot of trading bots available, but the ones that seem to have the biggest volume and the most amount of transactions seem to be the telegram trading bots. This is most likely because of the rise of memecoins in the last couple of years which has led to higher trading volume compared to altcoins or other cryptocurrencies. Memecoin communities mostly use telegram and it is quick and easy to trade on the same platform. The Trojan trading bot for example had about 3 billion USD in trading volume in November this year. The Trojan trading bot charges a 1% fee for buy and sell orders (unless having a discount from referral system, then it is 0.9%), so that means they collected 30 million USD from fees in November alone. Imagine being able to get a percentage of those fees as passive income. Even 0.1% of that would give you 30k USD as passive income every month!
Referral system
There are 2 ways of earning passive income by collecting fees from trading bots as of today. One of them is from a referral system. The other one is if the trading bot has a crypto token linked to the bot. I will talk more about that in the next chapter.
Through a referral link the ones using the link will get a discount on fees required for each trade. The ones providing the referral link will get a percentage of the fees collected from the ones using their referral link. This causes incentive to market your referral link to be able to get as many as possible to use your referral link. Most trading bots use this kind of system, but it requires quite some effort from the ones providing the referral link to get enough people to use it. The less people use your referral link, the less passive income you will get.
Token supply system
With this way of getting passive income, you only need to hold a certain amount of token supply. An example of a trading bot that has this kind of system is the Kingbot (you can look it up on dexscreener). In this system, you’ll get 2% revenue from the fees collected if you hold a 1% token supply. You’ll get 2.75% revenue if you hold a 2% token supply, so it’s a tiered system that gives an incentive to invest in the token itself. This saves you a lot of time and energy as you don’t need to market your referral link. The only thing you need to do is hold a certain amount of token supply. There are of course downsides to this as well, which is that it can get quite expensive if the marketcap of the token is very high already. So with this system it is important to get in very early before a lot of people buying token supply.
Either way, if you have the funds and don’t want to spend time and energy on marketing your referral link, holding token supply is the way to go.
Closing thoughts
If you have a lot of time and energy, then day trading can be very profitable this bull run. If you cannot afford to risk losing a lot of time then earning passive income from collecting fees looks like the most logical choice. There will be a lot of opportunities either way this bull run.
Have a happy bull run no matter what strategy you choose!
Earn passive income through crypto trading bots was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.