In the traditional sense, a dividend is a distribution of profits from a company’s stock or debt to its shareholders. Now you might be wondering, can cryptocurrencies pay dividends then? Surprisingly, the same concept also exists in the global crypto asset markets.
Read on to learn more about crypto dividends and discover a list of the top cryptocurrencies that pay dividends.
What are crypto dividends?
Crypto dividends are a form of profit sharing paid to investors as part of a cryptocurrency project’s revenue or fees. In most cases, crypto dividends are offered as an incentive to support the development and growth of a project by maintaining the project’s native currency.
In traditional finance, dividends are paid to shareholders based on the number of shares they own in a company. The same applies to the cryptocurrency industry. Token holders receive rewards – similar to dividends – in relation to the number of tokens they own.
Dividend-paying cryptocurrencies are usually paid out automatically, so investors don’t have to take any specific action. This is typically the case with exchange tokens that pay token holders a share of revenue or trading fees. Conversely, some cryptocurrencies that pay out rewards require you to hold your tokens in a specific wallet in order to receive the rewards.
Top Cryptocurrencies Paying Dividends
Now let’s take a look at five popular dividend coins you could invest in today.
AscendEX, formerly known as BitMax, is a centralized cryptocurrency exchange based in Singapore. The ecosystem is powered by the ASD token, which is an ERC-20 token. By holding ASD, investors can earn dividends in the form of automatic airdrops. The platform features a tiered rewards system that allows users to earn more rewards by holding more ASD tokens.
AscendX pays dividends by using a staking system that allows users to earn up to 50% of the network’s total profits. In other words, if your investment grows by 10%, you will be paid 50% of that growth. The other half goes back into the grid, which means if your investment shrinks by 10%, you’re still getting half of what was there before! The dividend payment is calculated using the following formula: (total bid volume/cumulative volume) x 50% + 0.1%.
In addition, users can purchase AscendEX’s ASD Investment Multiple Card, which can be used to earn even more rewards.
Bibox is a digital asset exchange that launched in China in 2017. It offers a wide range of trading options and features including trading, storage and wallet services.
Bibox has its native token called BIX which is an ERC20 token. You can buy and sell BIX on Bibox’s online exchange or through the exchange’s mobile app. The main goal of the project is to provide users with an easy way to buy and sell crypto assets from within the app. In addition, users can enjoy low transaction fees and fast withdrawals.
To earn dividends (wager rewards) in Bibox, you need to lock 500 BIX tokens in your account and trade at least once a week. Completing these tasks will reward you with a percentage of all trading fees generated by your account, with an APR of around 8%.
KuCoin is a popular Hong Kong-based cryptocurrency exchange that launched in September 2017. Along with this high level of liquidity, the exchange has also been praised for its fast transaction speeds, user-friendly interface and easy-to-use platform.
KuCoin offers its users a wide range of cryptocurrencies and trading pairs. It also pays daily dividends to its holders in its homeland Kucoin Token (KCS). Daily dividends are issued from 50% of all fees collected from users on KuCoin.
The KuCoin token (KCS) is an ERC20 token running on the Ethereum blockchain. KCS holders earn dividends by staking their tokens on the platform. The daily rewards average a 5.59% annual return. The more tokens you hold on KuCoin, the higher percentage of your earnings will be returned as staking rewards. This is a unique feature that sets KuCoin apart from many other exchanges.
Additionally, it also offers users the ability to vote on their KCS holdings for new offers and promotions. The more tokens you own, the more voting rights you have.
Formerly known as AntShares, NEO is a blockchain platform that allows you to issue and trade your digital assets or “smart contracts” on the NEO platform. The platform also offers a range of developer tools that allow users to create their smart contracts and decentralized applications (DApps). Therefore, it is also referred to as “Chinese Ethereum”.
The NEO ecosystem is powered by GAS, an internal currency that can be used to pay transaction fees and reward staking/holding tokens in wallets over time (dividends). GAS is distributed based on how long you hold your NEO tokens; You get more if you hold them longer. As it stands, you get 0.0003 GAS per day for every NEO you hold. This equates to an annual return of around 2%.
Note that the GAS in NEO is its native token and is different from the gas fees normally paid in Ethereum.
VeChain is a blockchain project founded in 2015. It is a smart contract platform, similar to Ethereum and NEO. The project boasts an eco-friendly and resilient blockchain ecosystem.
The native coin of this project is VET, an ERC20 token on the Ethereum network. Holding the VET token in your wallet will reward you with VTHOR coins, another native token in the VeChain ecosystem.
Dividends are paid quarterly and depend on how much you wagered. Currently, the payout rates for staking 1 VET are 0.00042 VTHORs, which is an APR of 1.4%.
So does crypto pay dividends? The answer is yes! Though technically, by definition, they’re not dividends. Instead, they are rewards that are paid out in cryptocurrency.
If you want to generate passive income from your crypto investments, any of these five options could work for you.