Where Has All The Money Gone? Looking Into Crypto Projects Who Pay Token Holders

As the number of cryptocurrency projects continues to grow, it’s becoming harder for teams to rise above the rest and incentivize investors and users to flock to their platform. 

There are several strategies teams have adopted to cultivate activity. One is airdrops, where projects simply give away tokens for free. While some might ask users to perform a specific action, like joining a Telegram community, others don’t require users to do anything other than hold a particular amount of Bitcoin or Ether. And there are a lot of other activities are happening regularly. For example, Alistair Milne is willing to give away 1 BTC for solving a Twitter puzzle.

Some projects also choose to pay token holders a percentage of their revenue or turnaround to attract attention and reward those who have staked cash to a platform or idea.

Staking Projects And Returns On Investment 

A popular way for cryptocurrency owners to collect an income is to take advantage of staking. Back in March 2019, well-known crypto exchange Coinbase announced Tezos holders could receive a revenue return if they hold Tezos in Coinbase. 

The idea of staking is closely related to the Proof of Stake (PoS) mechanism. Many believe Sunny King and Scott Nadel were the first to introduce the ideas of PoS and staking back in 2012. PoS chains allow for blocks to be produced without having to utilize mining hardware, so validators are chosen based on their coin ‘commitment’ to stake. 

Popular staking projects include Pundi-X, Cosmos, and Waves. 

‘Crypto-Dividends’ Can Offer Big Returns

Last year, crypto lending firm NEXO made headlines after announcing token holders received $2,409,574,87 in dividends. All holders had to do was log in to the NEXO mobile app to see their payout. 

The project said the total dividend was paid out in two parts, 50% from the NEXO Base Dividend and 50% from the NEXO Loyalty Dividend. This “innovative dividend-distribution methodology rewards long-term investor confidence and also decreases market volatility around ex-dividend dates,” according to NEXO.

NEXO highlighted the “annualized dividend yield is an impressive 12.73%, which surpasses all of the highest dividend-paying stocks in the S&P 500.” 

Back in 2017, crypto solutions provider Aureus announced a dividend structure where token holders would be paid monthly in Bitcoin though the Aureus Bitcoin Trust. 

The project said distribution would occur proportionally via a time-delayed system that would “allow AUR to be introduced to the open cryptocurrency economy in a gradual manner whilst retaining the value for the community in the long term, reducing the risk of inflation or over-supply when AUR is transferred out of the community.”

Paying Back Token Holders Is A Lucrative Tactic

Crypto projects paying out profits or royalties to holders are becoming more common.  Blocpal made waves after announcing 33% of their net profits would be given back to BPX holders as a sign of appreciation. 

AlphaPlay is another example of a project who has decided to pay token holders back as they raise funds. AlphaPlay is a DeFi (decentralized finance) betting platform that allows users to make bets on what supported cryptocurrency (Bitcoin, Ether, Tron, or EOS)  will make the most gains in a five-minute time frame. The winner is doubling his bet.

Right now, AlphaPlay is holding a token sale for its Alpha Gambling Loyalty Program, where token owners are receiving 6% of the entire platform turnover as bonuses. 90% of the overall turnover is distributed as prizes, while the final 4% is set to reward users who successfully invite friends on AlphaPlay. 

Uses who join AlphaPlay can get $1,000 of demo money to bet without having to go through any registration process, giving people a chance to understand the platform and learn different betting strategies. 

Other examples of profit-sharing tokens include KuCoin Shares (KCS), which gives 50% of KuCoin trading fees as a dividend, and Bibox Tokens (BIX), that pays holders 45% of net trading fees. BrideCoin (BCO) gives holders half of CryptoBirdge’s trading profits. 

Earning Passive Income With Cryptocurrency 

Many people are curious about how they can cultivate a ‘passive income’ through cryptocurrency as a new digital economy continues to make massive leaps and strides. 

Holding cryptocurrencies that pay out dividends or a percentage of profits is one of the easiest ways to make a residual income in the world of crypto. 

Platforms like NEXO, AlphaPlay, KuCoin, along with many others, have been able to attract attention to their projects and garner support by rewarding token holders.