Can I make passive income with Cardano?
You can make passive income by staking Cardano. Because it uses proof of stake to validate transactions, anyone who stakes their ADA tokens can earn rewards.
There are two ways to do this. The easiest option is to use a crypto exchange that offers crypto staking. After you buy ADA tokens, you can stake them directly from your account. Here are a few exchanges that supports Cardano staking:
Another option is to stake Cardano yourself through your own blockchain wallet. This requires a little more work, but it will likely get you a better return. To do this, you need to transfer your tokens to a wallet that supports Cardano staking. Two popular options are Daedalus and Yoroi Wallet. Then you can choose a staking pool and stake your Cardano.
Remember that the passive income you'll earn is in ADA tokens, not cash. That means the value of your income will depend on Cardano's price.
Cardano Unique risks
Reliance on research is a key part of Cardano, but this can also be a disadvantage. While Cardano is still in the research phase, it gives competitors the opportunity to acquire larger market shares.
For example, despite launching in 2017, it wasn't until September 2021 that Cardano launched smart contracts. It also had issues with them right away. The very first dApp, a multiple exchange called Minswap, had to shut down due to issues with processing transactions.
Ethereum had already been running smart contracts for years at this point, which helped establish it as the blockchain with the most dApps. Another competitor, Solana (SOL -0.14%), also beat Cardano to the punch despite the fact that it didn't launch until 2020.
To its credit, the Cardano ecosystem has been steadily growing. It now has decentralized exchanges, NFT marketplaces, blockchain games, and much more.
Is Cardano a good investment?
Cardano could be a worthwhile investment for patient investors who can handle the volatility.
As a blockchain platform, Cardano has a lot of potential. It's eco-friendly and has all kinds of applications, including DeFi and NFTs. It has built some great partnerships so far that demonstrate the different uses it offers. You can also stake Cardano to earn more ADA tokens, which is an added benefit if you buy it.
Still, the lengthy development process could be problematic, and Cardano has also run into performance issues, including heavy congestion at the start of 2022. Those are things to consider when deciding if you should invest.
While long-term investing is always a smart way to go with digital currencies and cryptocurrency stocks, it's especially important with Cardano. This project takes a slow-and-steady approach, so you need to give it time to develop.
Even though Cardano operates differently than other cryptocurrencies, it's still highly volatile. The price can go through significant changes in a short period of time. If you decide to invest, remember that long-term changes are more important than weekly swings.
How to buy Cardano
Because it's one of the market leaders, there are plenty of places to buy Cardano. After choosing an exchange that offers it, you can sign up for an account and make the purchase.
You may want to pick an exchange that also supports Cardano staking. As previously noted, Kraken, eToro, and Crypto.com are all suitable options. However, you can always buy Cardano and stake it yourself if the exchange you choose doesn't have this feature available.
Cardano has built a strong following based on its real-world utility and evidence-based approach. With the quality leadership and the funding behind it, this cryptocurrency will likely remain a major player in the years to come.
About the Author
