Top-10 cryptocurrencies that pay dividends

What Are Cryptocurrency Dividends?

If you are unsure of your ability to trade cryptocurrency on an exchange to capitalize on volatility or mining, why not turn to a more relaxed way to generate income! What I am talking about is passive income through cryptocurrency dividends, which are simple, secure and don’t require special knowledge. Thus, it’s a perfect option for newbies. 

But first, let’s figure out a couple of simple definitions, which you will need to grasp this topic: 

1. Сryptocurrency dividends. Similar to ordinary dividends, which are paid to the owners of the company’s shares by the decision of the board of directors, crypto dividends are paid to the holders of cryptocurrencies for the fact that they own cryptocurrencies for a long time and do not sell them. In this case, dividends are distributed automatically according to previously known rules.
2. Staking or PoS-mining (Proof-of-Stake) is an alternative method of mining by storing cryptocurrency in a special wallet that is always connected to the Internet (online wallet). Staking is much better than mining, because you simply store your digital assets and get dividends for it. Please note that rewards are not fixed, as they depend upon the number of participants, validators, and inflation or deflation rate.
3. Exchange token dividends are rewards that come from the fees the trader pays. A percentage of the trading commission is shared with token holders, and the amount of payment depends on the volume of the chosen exchange. The income from exchange tokens is higher than from staking, but the right platform should be chosen.

Which cryptocurrencies pay dividends

Crypto dividends are extremely popular right now. So finding them and laying the groundwork for passive income won’t be difficult. Please note that cryptocurrencies and tokens have different purposes, payment terms and wallets. Of those that offer the most lucrative dividends, the following cryptocurrencies and tokens stand out:

• VeChain (VET)
• NEO
• Decred (DCR)
• Komodo
• KuCoin
• PIVX
• Reddcoin (RDD)
• NAV Coin
• Neblio
• BitMax (BTMX)

VeChain (VET)

VeChain is a smart contract platform designed to improve business processes. It is positioned as the best platform for working with information and products. VeChain intends to create a distributed business trustless ecosystem using blockchain technology. 

The system for receiving dividends from VeChain is somewhat similar to NEO. It also has two tokens: VET and VTHOR. The latter, Thor Power, (sounds cool, right?) are used to pay dividends. Holders get 0.00042 VTHOR per day for each VET they possess. There is no set minimum for staking.

NEO

NEO is Chinese altcoin, which has become a worthy alternative to the legendary Ethereum. The idea behind the NEO platform is to develop a decentralized system for businesses and government agencies in China. On the NEO platform, companies and organizations can create their own private blockchains (their own tokens that work according to their own rules).

NEO has its own coin of the same name, as well as a token called Gas or NeoGas. NEO pays its altcoin holders with Gas tokens on a daily or monthly basis. NEO tokens should be stored in the wallet, where the “Claim Gas” option is provided. There is no minimum amount of coins one should hold. The amount of payments depends on the value of the coin, and usually ranges from 3 to 5% per annum. (previously it was up to 10%).

Decred (DCR)

Once, the programmers who worked in the Bitcoin team got together and decided to create a digital coin that will retain the best qualities of the first cryptocurrency and will be completely rid of its shortcomings. Thus, the Decred cryptocurrency appeared, promising its investors a considerable income from dividends. Decred is a standalone and open-source cryptocurrency with a hybrid consensus system that uses both PoW and PoS to verify transactions. This ensures that one group of miners cannot dominate the entire system, and individual PoS participants can influence the development of the project in the future.

The process of earning an income is pretty trivial, you need an official wallet and a constant internet connection. However, there is one more condition – the purchase of voting tickets, which provides another interesting advantage – the right to vote for the future development of the project. You can use a “Voting Service Provider” or a wallet service called “Solo Voter”. Passive income with DCR varies from person to person, but a common figure is 8% annual yield.

Komodo

Komodo is a unique crypto project that runs through Proof-of-Work protocol and combines the advantages of Bitcoin and Zcash. Offering its users 5% per annum, Komodo has become one of the most attractive cryptocurrencies for those looking for passive income. The only condition is that there must be 10 KMD staked in your wallet. The reward is distributed monthly between holders until the maximum tokens of 200 million are reached (at the moment, there are 126,634,833 tokens). 

The nice thing is that, unlike most other cryptocurrency offerings, you don’t need to be online all the time to receive dividends from Komodo.

KuCoin

KuCoin is a cryptocurrency from the exchange of the same name, which rewards the owners of KuCoins with 50% of the profit received from commissions for exchange trading. It’s very generous and interesting. The principle of operation is somewhat similar to a joint stock company, where the one who has more tokens gets more coins at the end of the day to their wallet. To be eligible to receive dividends, a minimum of 6 KuСoins (KCS) must be kept on the exchange. 

Ethereum-based KuCoin tokens refers to exchange tokens that can be also stored in wallets that support the storage of ERC20 Ethereum tokens.

Dividends are distributed daily and depend on the number of tokens. According to some estimates the annual income is 5%.

PIVX

For those who value privacy and want to be part of an active cryptocurrency community, PIVX is exactly what you need. Using a financial data protection protocol, PIVX guarantees the anonymity of its users, and with the help of masternodes that participate in voting, promote various projects and receive rewards for this, it supports the stable development of the network. 

There are three ways to get PIV: make money from the PIVs stored in the wallet, start a masternode, or help develop and launch PIVX projects.

There is no minimum staking amount, however, to become part of the masternode network, you need to have 10,000 PIVX, which is roughly $ 5,500. In this case, according to the calculator, you will be able to earn $ 1.66 per day and $ 605 per year, respectively.

If you stake, for example, 1000 PIVX, you’ll get $0.13 per day. 

Thus, on the basis of PIVX dividends it is possible to get from 4 to 5% of the annual income. But be careful, as not all masternode coins support the dividend feature.

The inconvenience of receiving dividends from PIVX is that you need to always be online, but this can be solved using cloud staking.

Reddcoin (RDD)

Reddcoin is an alternative cryptocurrency that is marked as a “social currency”, and used for tipping on social media such as Reddit, Twitter, etc. Thus, the developers want to popularize cryptocurrency, and they succeed in it.

Staking RDD cryptocurrency is a very convenient process – all you need to do is to download the Reddcoin Core wallet and upload your private keys.

After waiting eight hours, you will start earning coins. The rewards differ depending on how many coins you have and how long they have been staked. To get the maximum reward, it is recommended to keep coins for less than a month. The approximate amount of remuneration is about 5% per annum.

NAV Coin

NavCoin is a PoS fork of Bitcoin, created back in 2014. The benefits of owning NAV coins will be especially appreciated by those who value privacy. After all, it is completely anonymous, thanks to its technology, which even erases the IP address of the computer from which the transaction was carried out.

To start passive earnings you just need to keep your coins in the Core Wallet, which is very lightweight and can even run on a Raspberry Pi. Coins will start staking in two hours.

The average reward is about 5% per year, which is not that much, but since the staking process is so simple, it is also a good option for funding your budget with little or no effort.

For a more accurate estimate, use the NAV Staking Calculator.

Neblio

Neblio is a platform for dApps (decentralized applications). It is focused mainly on enterprises and corporate clients, however, individuals can also have access to the development of dApps on Neblio.

Making money with Neblio is highly time-dependent: the more continuously you stake, the greater the reward. 

The passive income is up to 10% per annum. The main condition is that you need to keep your wallet online at all times. There is no minimum number of NEBLs required for this process.

Interestingly, 100% of all tokens were sold during the ICO. This means that the only way to get NEBL is to buy from holders or participate in staking in order to receive a reward in the form of tokens. Moreover, staking is the only way to create new tokens on the Nebilo network.

BitMax (BTMX)

Actually, since March 22 this global digital asset financial platform has been called AscendEX (ASD). 

Founded by a group of Wall Street quantitative trading veterans in 2018, a Singapore-based platform offers trading services across over 200 trading pairs across cash, margin, and futures products. 

Dividends received from staking of ASD tokens are paid daily, and the amount depends on the number of those same tokens.

And although this asset is at the bottom of the list, it should undoubtedly be at the top due to the size of the annual interest rate that is paid to investors. Just think about this figure: 80% of the net profit pooled from commissions is distributed among the shareholders.

How to pay taxes from your crypto dividends?

Each country has its own rules and nuances regarding the payment of taxes. Unfortunately, since crypto steakin is not a long-established phenomenon, in many countries there is still no any staking specific crypto tax guidance.

However, in countries such as the United States and Australia, mining or staking income is taxable and must be reported at the time the reward is received.In fact, every transaction that generates a profit is subject to taxation, which is why it is very important to keep a record of your crypto activity. Whether it’s selling, buying, exchanging, or earning passive income, one should keep a detailed record so that it’s easier to fill out the tax return later and don’t miss anything. 

Moreover, you should also take into account the change in the value of the coins received. For example, if you received 1 bitcoin as a reward when its value was $ 25,000, and you sell it for $ 33,000, the tax is deducted from the last amount (including a capital gain of $ 8,000).

In the United States, some congressmen are in dispute with the IRS over whether staking proceeds should be taxed. They are trying to ensure that the cryptocurrency is taxed only at the time of its sale, and not at the moment of its staking, since the second process can be equated to the creation of “new property”, and it is not taxed.

Until then, the monetary value (in government currency equivalent) of the staking rewards is taxed like any other ordinary income at the time of receipt. The same approach will apply to any other form of coin reward that is received by a taxpayer as a result of participating in the consensus mechanism.

Since in most cases there are no specific guidelines for cryptocurrency dividends and the process of filling out a tax invoice is quite complicated, it is best to consult with your tax advisors.

Conclusion

As you can see from the above, there is a real opportunity to make money on cryptocurrency without mining, trading and other complex manipulations. To receive passive income from PoS, you just need to keep your computer turned on and the PoS cryptocurrency wallet activated so that they confirm transactions on the network. One of the key advantages of this type of passive income is that your cryptocurrencies can be sold at any time, they do not lose value due to the stake. You can also delegate your share of ownership to another validator, and in return receive a percentage of the mining reward. In this case, you need to delegate your share of ownership once and then just wait for accruals.

Among the shortcomings, experts note the likelihood that PoS can lead to the accumulation of funds in the hands of one or a group of validators, which will negatively affect the decentralization of the network. Also, depending on the cryptocurrency, the entry threshold can be quite high, and large investments will be required for significant income. However, the number of cryptocurrencies supporting the PoS consensus algorithm is constantly growing, so there is an increasing choice for investors.

Disclaimer: Please keep in mind that the content of this article is not financial or investing advice. The information provided is the author’s opinion only and should not be considered as direct recommendations for trading or investment. Any article reader or website visitor should consider multiple viewpoints and become familiar with all local regulations before cryptocurrency investment. We do not make any warranties about reliability and accuracy of this information.