Passive Income on Algorand
For many people, passive income is a primary objective when considering where to invest money. In this article, we will discuss many of the major available streams of passive income that can be earned on the Algorand Blockchain; their relative risk levels, the % APR/APY you can earn, and how long those streams of income will be viable for. We will discuss Algorand Governance, Yieldly Finance, Tinyman, Algofi, and Algostake.
Algorand’s Governance protocol is the primary way through which decisions about Algorand’s future are made via quarterly voting periods. The protocol requires participants to maintain a committed balance of Algos at the start of each period and vote on measures that are proposed within the Algorand Foundation’s given timeframe. If a participant does not vote or dips beneath their committed stake in their linked wallet they become ineligible for that period’s rewards, which are paid at the end of each period. With Algorand’s automatic wallet staking being phased out this month, this will soon be the only way to earn Algos directly.
Rate (APR%): 9-14% APR. The rate is determined by the period’s ALGO reward divided by the number of committed algos at the end of the period. For period 1, this was 14.05%. For period 2, it is 9.36%1 but this is almost guaranteed to increase as more people drop out. The APR has already increased 0.43% since the period started.
Risk Level Compared to Holding $ALGO (1-10): 1. There is no additional risk to holding Algo as you can remove your committed stake at any time.
Length of time: 2029+