Crypto trading in Kenya is on a steady rise, with many citizens looking for alternative income streams. However, there is a group of people who cannot be actively engaged in crypto trading; these are beginners who don’t have the skills to trade but have the assets and people with idle assets and don’t have either the skills or time to trade.
This brings about the need to know how to earn passive income with your crypto assets In this guide, we explore the top three methods of earning passive income with crypto in Kenya.
The abbreviation APY will be used quite much in this guide, so a little introduction about it.
APY stands for annual percentage yield. It is a way to calculate interest earned on an investment that includes the effects of compound interest. In traditional finance, APY is used for things like savings accounts and certificates of deposit. In crypto, there are many ways to earn interest on your cryptoassets, and it’s not uncommon for APY to exceed 10%—far beyond what’s considered a high rate in traditional finance. Read more about APY and how it is calculated in crypto.
With that cleared, let’s earn some passive income. Below are the top 3 ways.
1. Staking: Earning Rewards by Holding Crypto in Kenya
What is staking?
Staking involves locking up your cryptocurrency in a blockchain network to support its operations and security. In return, you earn staking rewards. This is possible with Proof-of-Stake (PoS) cryptocurrencies like Ethereum (ETH), Cardano (ADA), and Solana (SOL).
Best Staking Platforms for Kenyans
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Binance, Kenya’s most common exchange platform, provides two distinct staking options for investors. Their flexible staking allows users to withdraw funds anytime, though it typically offers lower APY rates (3-8%). The locked staking option requires committing funds for specific periods (30, 60, or 90 days) but rewards users with higher yields (8-15% APY). Binance supports staking for multiple cryptocurrencies, including ETH, ADA, DOT, and MATIC.
- Through its brand ambassadors in Kenyan social media, Binance is actively encouraging users to stake on the platform every day, making the process even simpler.
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Lido Finance has revolutionized Ethereum staking through its liquid staking solution. Instead of the traditional 32 ETH requirement for running a validator node, users can stake any amount of ETH and receive stETH tokens in return. These stETH tokens can be used in DeFi protocols while earning staking rewards (currently around 4-5% APY). This solution has made Ethereum staking more accessible and capital-efficient for average investors.
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Trust Wallet stands out as a user-friendly mobile wallet that brings staking directly to your smartphone. Users can stake various proof-of-stake cryptocurrencies like BNB, TRON, and Cosmos directly from their wallet interface, eliminating the need to transfer funds to exchanges. The platform offers competitive APY rates (varying by blockchain) and provides a straightforward staking process suitable for beginners. However, users maintain full custody of their assets, adding an extra layer of security compared to exchange staking.
Potential Earnings
- Ethereum (ETH): 4-5% APY
- Cardano (ADA): 3-4% APY
- Solana (SOL): 6-7% APY
How to Get Started with Staking Crypto in Kenya Using Binance.
To begin your staking journey on Binance, start by creating and verifying your account on the platform. Purchase your preferred cryptocurrency directly through Binance using a bank transfer, M-Pesa, or debit/credit card.
Binance supports a wide range of stakeable assets, including Ethereum (ETH), Cardano (ADA), Solana (SOL), Polygon (MATIC), and BNB. The minimum staking amounts vary; for instance, you can stake ETH with as little as 0.1 ETH.
Once you have your crypto assets in your Binance spot wallet, navigate to the “Earn” section and select “Staking.” Here, you’ll find two main options:
- Flexible Staking:
- No lock-up period required
- Withdraw your funds anytime
- Lower APY rates (typically 3-8%)
- Ideal for beginners and those prioritizing liquidity
- Daily reward distributions
- Locked Staking:
- Fixed lock-up periods (30, 60, or 90 days)
- Higher APY rates (8-15% depending on the asset)
- Cannot withdraw until the lock period ends
- Better for long-term holders
- More predictable returns
Before starting, ensure you understand the specific staking requirements, rewards distribution schedule, and any associated risks. Binance provides real-time APY rates and clear information about minimum stake amounts and lock-up periods for each cryptocurrency.
Remember: While Binance offers a secure and user-friendly staking environment, always enable two-factor authentication (2FA) and carefully review the terms and conditions for each staking product.
2. Yield Farming: Providing Liquidity for Higher Returns
What is Yield Farming?
Yield farming is the process of depositing cryptocurrency into liquidity pools on Decentralized Finance (DeFi) platforms to earn high-interest returns.
Best Yield Farming Platforms for Kenyans
- PancakeSwap (BSC): Ideal for farming Binance Smart Chain tokens.
- Uniswap (Ethereum): trusted platform with stable yield farming options.
- Curve Finance: Best for farming stablecoins like USDT, USDC, and DAI.
Potential Earnings
- Regular pools: 10-50% APY
- High-yield farms: 100%+ APY
How to Start Yield Farming.
Yield farming can be a lucrative way to earn passive income, but it requires careful planning and risk management.
First, set up a MetaMask or Trust Wallet, ensuring that it is properly secured with a strong password and seed phrase backup. Next, purchase cryptocurrencies such as Binance Coin (BNB), Ethereum (ETH), or Tether (USDT) from a reputable exchange like Binance or KuCoin.
Once you have your assets, transfer them to your wallet and connect it to a DeFi platform such as PancakeSwap, Uniswap, or Curve Finance. Choose a liquidity pool based on the token pairs and potential yield rewards, considering factors like APY, impermanent loss, and platform fees.
Once you deposit your tokens into the pool, you will start earning rewards, usually in the form of governance tokens or transaction fees, which you can reinvest or withdraw for profit.
Risks of Yield Farming
- Impermanent loss: If token prices fluctuate.
- Smart contract risks: potential hacking vulnerabilities.
- High gas fees: especially on the Ethereum network.
- Not beginner-friendly. Understanding crypto basics is necessary.
3. Crypto Lending: Earn Interest on Your Crypto
What is Crypto Lending?
Crypto lending allows you to lend your digital assets to borrowers through centralized or decentralized platforms in exchange for interest.
Best Crypto Lending Platforms for Kenyans
- Binance Earn: Offers lending for BTC, USDT, and ETH with competitive interest rates.
- Aave (DeFi): a decentralized lending protocol.
- Nexo & BlockFi: Provide high interest on stablecoins.
Potential Earnings
- Bitcoin (BTC) lending: 3-6% APY
- Stablecoin lending (USDT, USDC): 8-12% APY
- Ethereum (ETH) lending: 4-7% APY
How to Get Started with Crypto Lending
- Select a trusted lending platform.
- Deposit your crypto assets (BTC, ETH, USDT).
- Start earning interest while holding your assets
Conclusion
As crypto in Kenya continues to soar and many individuals begin looking into the profession, these passive income strategies are key to ensuring you get the concepts of crypto, your assets remain intact, while also earning interest while holding the assets. Staking offers newcomers a straightforward approach to earning consistent returns by holding and validating transactions, typically yielding 5-15% annual returns with minimal risk.
While yield farming can deliver significantly higher rewards, often exceeding 50% APY, it exposes investors to potential smart contract vulnerabilities and impermanent loss. It is advisable to avoid it as a beginner.
The cryptocurrency space carries inherent risks, and it is essential to exercise caution before investing. Seeking training from reputable crypto trading academies can help sharpen your skills, but if that is not an option, numerous free online resources can provide valuable insights.
Always start slow, invest only what you can afford to hold for the long term, and be prepared for potential losses. By staying informed and making strategic decisions, you can navigate the crypto space more safely and effectively.
FAQ
Which is the best crypto trading platform in Kenya?
Binance is the best platform to trade crypto in Kenya. Its large local user base, low fees, security measures, and local customer support make it the ideal choice for Kenyan crypto traders.