3 ways to earn passive income on Steemit

in #steemit6 years ago (edited)

3 ways to earn passive income on Steemit



1.0 Introduction


The crypto market is a volatile and growing, massive profits can be seen one day and massive losses the next, however it is undeniable that the crypto market is growing - from $30b last year (14/04/17) to $314b today (14/04/18). Due to this volatile and high growth phase, the returns one can see in the Crypto market are amazing to say the least. Hence, it is no surprise that Steemit provides high returns, however the Steemit platform is unique in that you can leverage your Steem holdings in a variety of ways to provide risk free passive income. Three particular methods to earn passive income will be discussed, including; selling your vote, leasing out your Steem Power (SP), and delegating SP to bid bots.

Note: Curation trails and front running bid bots will not be discussed, as the returns are far less than the other methods.

2.0 The 3 Ways


Selling your vote, leasing your SP, and delegating your SP to bid bots, all provide great returns, however differences lie in the volatility of returns, control of steem power and responsibility.

2.1 Selling your vote


Selling your vote provides consistent returns and allows you to hold all your SP, and you can start and stop the service immediately. There are two well established platforms that enable you to sell your vote, including @minnowbooster and @smartsteem. After you have registered your account on either platform, whenever a user sends a payment to purchase a vote, the account with the most appropriate vote value is chosen to provider the payee a vote. Both @minnowbooster and @smartsteem give 85% of the payment to the vote sellers, however this does not include the curation rewards you receive. Thus, the 85% payment plus the curation rewards often makes vote selling as profitable as the other passive income methods. Also, it is important to understand that the responsibility of not voting on spam is placed in the hands of the platform (@minnowbooster & @smartsteem).

2.2 Lease out your SP


Leasing out your SP involves delegating your SP to a user for a agreed upon amount for a specified length of time. Leasing SP is a service @minnowbooster provides, through their platform you can view a list of of users who can be sorted according to their desired delegation, Average Percentage Return (APR) and length of lease; the ability to view these metrics and choose who to delegate to gives power to you to be selective in your leasing. In other words, you are empowered to choose a fair deal and who to support. The average APR that one can receive from leasing on minnowbooster is around 20% and this amound is fixed from when agreeing to the lease. The delegator still maintains overall control as they can end the lease whenever they wish without additional costs. Also, the overall responsibility to prevent abusers from receiving delegations are in @minnowboosters hand.

2.3 Delegate to a bid bot


Bid Bots are able to provide the highest return on your SP however are also the most volatile in their returns. Bid bots vary in the share of rewards they provide to their delegators, with most providing a share from 100% to 95%, however this % share does not necessarily correspond with high returns. Of course a higher % share does make higher returns more likely, the popularity of the bid bot and the consistency of the bots bidding rounds being filled is what separates the high return bid bots from the low return bid bits. Bid bots can provide an APR of ~25% to a low of 10%, and thus proper research should be conducted to understand the return you can expect to receive before delegating. Like leasing your SP, your voting power will be unaffected, only your voting value will decrease. The responsibility of preventing abusers lies in the hands of the bid bot owner and as a delegator you can choose to cancel your delegation at any time.

3.0 Key benefits of each method


Selling your vote

  • You are in control of your SP
  • You can start and stop the service without repercussion

Leasing your SP

  • Fixed return
  • Your voting power is untouched , only your voting value decreases
  • Can cancel lease at any time without additional costs
  • Upon completion/cancellation of delegation, it takes 1 week for your SP to return

Delegating SP to a Bid Bot

  • Can provide the highest returns
  • Most volatile returns
  • Can cancel delegation at any time
  • Upon completion/cancellation of delegation, it takes 1 week for your SP to return

4.0 Conclusion


Overall each method to earn passive income can provide similar returns and each with their own benefits. Vote selling enables you to hold onto all your SP, and easily stop and start the service but provides arguably the lowest return of the three. While leasing provides fixed returns you must wait 1 week for your SP to return to initiate another lease, this means if a leaser cancels their lease early you will loose APR. Similarly delegating to a bid bot you will face a similar issue, however the returns are more volatile and the APR you receive can be the highest of the three methods. Thus, it is important for someone who wishes to leverage their SP for passive income to weigh up the benefits and evaluate the method best suited for them.

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Upvoted and resteemed.

Great article and very informative, thanks for sharing. I've smashed the upvote button for you!

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This is very informative. Thank you!

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