How To Make Passive Income With KuCoin| KuCoin (2024)

Many people who are new to crypto simply buy assets and hold them for the long term, waiting for prices to go up. Others who are a bit savvier try to take advantage of the high yields afforded by certain wallets.

But there are many other ways of snowballing your assets in crypto. But first, what exactly is passive income? Simply put, it’s the ability to make money on your dormant assets while you do practically nothing. And KuCoin makes passive income easy.

If you’ve only been trading and holding crypto on KuCoin, we’re here to tell you that there’s a better way. The cryptocurrency exchange offers many more passive-income earning opportunities to its users than first meets the eye.

We outline the most popular approaches below.

The Many Ways of Making Passive Income on KuCoin

As mentioned, KuCoin has quickly become one of the most popular exchanges for altcoin trading. But for investors to view it as the only exchange is to do themselves a disservice. Savvier investors will have come to realize that the KuCoin team has been rolling out many profit-generating tools.

The tools that are currentl available are detailed below.

KuCoin Lending Is the Way

Lending is the most popular way to earn passive income on the KuCoin platform. KuCoin lending currently supports around 90 digital assets for lending, even those that aren’t commonly found on other crypto lending platforms. USDT lending till now is the most favorite among traders. These tokens include more established coins like ETH and SOL as well as memecoins like SHIB.

Unlike traditional financial banks, which still have high barriers to entry due to restrictions on credit checks, regulations, legacy tech, and so on, the crypto lending market makes it easier to lend and borrow quickly and easily.

Borrowers have to put up collateral against their loan to qualify for it, so your investments are safe.

Lenders on KuCoin have two options: Manual Lend or Auto-Lend. Which option you prefer depends on your understanding of how it works, as well as your preferences.

One issue with lending to consider would be fast loan repayment. Specifically, this happens when someone borrows for a period and repays the loan much faster (say within a few hours). In such instances, the Manual Lend feature is not ideal, since the earning period is over fast.

In contrast, the Auto-Lend feature ensures that your chosen crypto asset is always available for a loan. However, users must set the Daily Interest Rate and check every so often to make sure that their rate has been accepted, so that the loan can be processed. Lending periods are from 7, 14, to 28 days.

The KCS Bonus

Users holding KuCoin Token (KCS) are rewarded handsomely for their loyalty and support of the exchange. There are many reasons to buy and hold KCS, but the four that stand out are as follows:

1. If you use KCS to pay for trading fees, you’re entitled to a 20% discount.
2. You can accrue more tokens simply by holding at least 6 KCS. The exchange has a KCS Bonus program, sharing 50% of the daily trading fees with KCS holders as dividends.
3. With the supply capped at 200 million, KuCoin has announced plans to burn 100 million (i.e., half the total supply). Such a move should theoretically double its scarcity, in turn increasing demand.
4. Furthermore, KCS will act as the fuel for the KCC public chain, which has been built by KuCoin and KCS fans. KCS is expected to rise in inherent value as more use cases emerge in the KCC ecosystem, such as the DEX, NFTs, and more.

Staking With KuCoin

Staking with KuCoin is pretty straightforward. Proof-of-Stake (PoS) is a consensus mechanism that differs from - and is an improvement over - the traditional Proof-of-Work (PoW) consensus. PoW secures a network by requiring miners to make hardware- and energy-intensive investments.

The reasoning is as follows: If you’ve invested considerably in securing the network, trying to compromise the same network goes against your own interests.

Proof-of-Stake follows a similar logic, except it doesn’t require hard investments. When you invest and hold a specific token, the reasoning goes that it's in your best interest to see that token succeed. (In other words, why compromise your own investment?)

Staking on KuCoin is done via KuCoin Earn. Users who stake earn staking rewards with high annualized yields, as well as a daily POL mining income (POL is the native token of KuCoin Earn). Users also have the option to choose between flexible and fixed staking periods.

As the name implies, “flexible” means that users don’t have to commit their staked amount and lock it - instead, they can redeem their funds at any time. In contrast, fixed requires staking periods of 21, 30, or 90 days.

How Can the KuCoin Trading Bot Work for You

The KuCoin Trading Bot is a new tool that was created to help automate trading for users from all walks of life. For beginners to more professional traders, the trading bot currently offers four main strategies:

1. Spot Grid Trading
2. Futures Grid Trading
3. Dollar-Cost Averaging (DCA)
4. Smart Rebalance
5. Infinity Grid

Spot Grid trading is the simplest strategy on offer. That's what makes it so beginner-friendly. The strategy works by splitting your investment into multiple grids. From there, it positions buy and sell orders. Essentially, it works by selling when the max price target is reached, and conversely, buying upon hitting the minimum price target.

Another main advantage of this strategy, other than being fully automated, is that it removes the emotion element. Human decision-making relies primarily on emotional cues. That's why running the bot to maximize profits based on preset conditions can prove to be a highly profitable approach to trading.

Futures Grid trading comprises a combined approach of grid and futures trading. In doing so, it continuously collects profits from grid trading, thereby tempering some of the volatility in the crypto market.

Whether going long or short, this approach protects investors from sharp downtowns and upturns. Moreover, due to the automation and programming design, the bot operates within the preset custom parameters. This makes it suitable for use by investors who might lack the experience to trade futures contracts. Investors may also use the advanced features to place Stop-Loss orders, so that they don’t have to track the market 24/7.

Dollar-Cost Averaging is a simple strategy for any crypto investor who is new to a highly volatile market. It's also great for investors who want to minimize the emotional element from trading. DCA works by taking your investment, spreading it over a specific period, and investing in set time intervals.

For example, if you have $1000 to invest every month, you may DCA $250 every week. The trading bot can automate all this and help keep your investment growing, without you having to do anything on your end.

If investors were to apply DCA once a week, manually might work. But if you wish to DCA into a position every day, the trading bot is your best friend. Irrespective of whether the market moves up or down, by making daily purchases on your behalf, the bot removes the emotional component of timing your buy orders. DCA is the best option for investors who want to apply the “time in the market is better than timing the market” concept.

Smart Rebalance is also a traditional investment strategy that’s friendly for users who want to set their portfolio and not have to check it all the time. Therefore, this approach isn’t ideal for day traders, and is best for long-term investors.

The Smart Rebalance bot works by ensuring that the percentages allocated to individual cryptocurrencies in your portfolio are sustained. For example, let’s say you have four assets sitting in your portfolio, and you’ve distributed the percentages evenly, at 25% each.

But if the price of a single asset should explode by more than 50% while all others remain stable, it might be best to redistribute those earnings between all your other holdings. The Smart Rebalance bot achieves this goal automatically, without requiring any action from the user.

Compared with Spot Grid Bot which places orders with a fixed number, Infinity Grid Bot places orders in percentages, therefore keeping the value of the asset intact.

For example, if we bought 1 BTC at the price of $50,000, and want to profit as the price increases, we can set the single grid profit to 1%.

When the BTC price pumps to the first grid, the BTC held is now worth $50,500, so the bot will sell $500 worth of bitcoins. Therefore, the number of remaining bitcoins will change, but its value will remain stable at 50,000 USDT. Similarly, the bot will buy BTC when the price drops, keeping the total value of BTC in hand at $50,000.

A Dedicated Mining Pool Incentivizing PoW Miners

Not to be confused with Pool-X and POL mining, the KuCoin Mining Pool offering is the exchange’s official PoW mining pool. And compared to other BTC and BCH mining pools, the fee is only 2%.

The mining pool offers several other incentives to join their pool over all others. These include an optimized customer experience, 1:1 support, and the security only a major exchange can provide.

The crypto mining pool officially launched in August 2021, with KuCoin planning to support other coins like Digibyte (DGB) in the future. If you're a PoW miner, keep an eye out on this one.

The KuCoin Affiliate Program Pays Over Time

Most affiliate programs offer affiliate partners a one-time payoff of $30 to $50 in Bitcoin. In contrast, KuCoin provides a generous compensation scheme for every referral who ends up trading on the platform. Specifically, for every referee who trades, you receive up to 40% in trading fees as commission for the entire duration of their trading with KuCoin.

The Future of Passive Income is on KuCoin

The tools and strategies outlined in this article comprise the current passive income options offered by the KuCoin exchange. However, the team is already working on other game-changers that’ll help investors make a consistent stream of income.

While passive income alternatives can help those who don’t want to keep their eyes on their portfolio 24/7 earn interest steadily, no investments are risk-free. Therefore, please do your own research on each option before diving straight into deep waters. And keep in mind that“practice makes perfect.”By getting more hands-on experience, you’re more likely to achieve a consistent stream of revenue in the long run.

Stay tuned and watch the KuCoin Blog for more interesting and valuable educational content. All the best!

Did you know that KuCoin offers premium TradingView charts to all of its clients? With this, you can step up your technical analysis and easily trade your favorite cryptos even in the bear market.

Notice: KuCoin does not provide financial advice. Please do your own risk assessment when deciding how to invest in cryptocurrency and blockchain technology.

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