Cryptocurrencies are often seen as an investment, so it makes sense that there are Cryptocurrencies that also pay dividends.
Same as stocks, there are certain Cryptocurrencies that really do pay dividends, that you can use to make passive income.
So, which Cryptocurrencies pay dividends out of the thousands of Cryptocurrencies out there?
The popular Cryptocurrencies that pay out dividends are NEO, KuCoin Shares, ARK, Neblio, , Komodo, PIVX, COSS, Pundi X, NAV Coin, and the Bibox Token.
There are dividend-paying Cryptocurrencies that pay out dividends based on staking, and there are the ones that pay out dividends based on HOLDing.
In this complete guide I am going to go over the most popular Cryptocurrencies that pay dividends, and why you might or might not want to consider investing in them.
Let’s get straight into the article!
How do dividend-paying Cryptocurrencies work?
In the traditional investing world, dividends are simply monthly or yearly payments, that are given to the shareholders of a company, in order to reward them for having trust in the company and holding their shares.
In the Cryptocurrency world, dividends work in a similar way, where companies are rewarding individual users for holding their Cryptocurrencies.
However, there are 2 important words when talking about dividends in the Cryptocurrency world that you should know.
First, there is the concept called staking.
Basically, staking is when you hold a certain Cryptocurrency that runs on the Proof-of-Stake algorithm in a special wallet.
Bitcoin, on the other hand, uses the Proof-of-Work algorithm, just in case you were wondering.
And the second concept you need to understand when getting into is that there are Cryptocurrencies that dividends for people HOLDing their Cryptocurrency This means, that you do not need to store your Cryptocurrency in a special kind of wallet, but rather you can store your coins in any wallet you like and will receive dividends for holding that Cryptocurrency anyways.
So, let’s look at the top Cryptocurrencies out there right now that pay dividends to their investors and holders.
NEO is often referred to as being the Chinese version of Ethereum, as it also has Smart Contracts and is essentially trying to build a Smart Economy, similar to what Ethereum is trying to do as well.
Also, same as there are Tokens that can be built upon the Ethereum blockchain, there are also Tokens built upon the NEO blockchain.
One of those Tokens is the GAS Token, which was previously named Antcoin or ANC, for short.
You can store the GAS Token in any Cryptocurrency wallet that supports the NEO Cryptocurrency, of course, and will receive it as dividends, simply by holding NEO.
What’s also cool about it is, that to receive your dividends, you do not have to keep your NEO wallet open the whole time, as it is required with several other Proof-of-Stake Cryptocurrencies.
The annual return you will get by holding NEO is around 5.5%, which you will receive in form of GAS Tokens.
Then, you can always exchange your GAS Tokens for NEO coins on an exchange and effectively compounds your NEO coins.
KuCoin is a fairly new Cryptocurrency exchange, as it was launched in 2017.
Since then the exchange, it has been getting quite popular, as it has a very interesting business model, that is also about rewarding the users.
If you are interested in the underlying platform that KuCoin shares is built on, it is the Ethereum platform, and KuCoin shares is essentially an ERC20 Token.
Basically, you can buy their KuCoin shares, and hold them in your wallet.
will then pay you daily dividends, which are consist of 50% of the total trading fees on the exchange.
Basically, half of all the fees that KuCoin makes on any single day are paid out to the holders of the KuCoin Shares, in proportion to how much KuCoin shares they actually own.
If you are wondering about what happens to the other half of fees, and if they are going towards their own pockets, they are not.
In fact, only 10% of the trading fees are being kept by .
The remaining 40%, that isn’t given to the holders of the KuCoin shares are given to users who successfully manage to refer other people to trade on .
They are giving these out as a reward for bringing KuCoin more customers.
ARK is a Cryptocurrency that is kinda unknown, as I haven’t heard much about it before.
Basically, ARK is using the Proof-of-Stake algorithm, the Delegated Proof-of-Stake algorithm, to be precise.
There is a voting mechanism, that’s built into ARK’s technology that chooses 51 block producers.
Then, the block producers can choose how much of the reward they are going to give to the people that voted for them.
The cool thing is, that most block producers give more than 90% of the block reward to the people that voted for them, so you get dividends, simply by voting for the miners who verified the previous blocks.
Neblio is a fairly new Cryptocurrency that is doing something similar to Ethereum and NEO when it comes to the technology they are using, as Neblio is also offering the development of Decentralized Applications (DApps) and Smart Contracts on their platform.
Since Neblio is a Proof-of-Stake coin, you can hold it in their official Neblio wallet and receive dividends as high as 10% per year, as a reward for holding their Cryptocurrency.
The BridgeCoin is a native token of the Cryptocurrency exchange CryptoBridge DEX.
By holding the BridgeCoin Token you receive 50% of the profits made by the BridgeCoin exchange.
What’s cool about Dex is, that it is a completely decentralized exchange and that they share a quite fair amount of their profits with the holders of the .
Of course, the dividends you will receive are dependant on how much trading activity is going through the exchange, similar to how the KuCoin Shares dividend’s work.
Komodo is a Cryptocurrency that is offering privacy features, as well as a more advanced consensus mechanism.
Komodo is essentially similar to Ethereum, meaning that other Tokens and Decentralized Applications can be built on top of it.
What’s interesting about Komodo is, that it is part of a system, that is completely decentralized called SuperNET.
Komodo is a Cryptocurrency that has been developed very extensively in the past, as Komodo had a lot of entries on their GitHub page.
This is always a very good sign, as it shows that there has been a lot of development and progress made with Komodo.
Komodo is also developing Atomic Swaps, which makes it possible to exchange different Cryptocurrencies that are using the same hashing algorithm, and essentially exchange Cryptocurrencies in a completely decentralized way.
They are calling this BarterDEX.
If you would like to learn more about Atomic Swaps and how decentralized Cryptocurrency exchanges might look like in the future, check out my article on the Bitcoin Lightning Network here, which also covers Atomic Swaps.
The cool thing about Komodo is, that unlike a Proof-of-Stake Cryptocurrency, where you need to keep a special kind of wallet open at all times, you just need to move around your Komodo coins once per year, and you are all set.
Normally you will receive a return of about 5% each and every year for holding the Komodo Cryptocurrency.
In order for you to start getting dividends for holding the Komodo Cryptocurrency, you first need to buy Komodo coins on an exchange like by clicking here.
Then you need to store your Komodo coins on a special Amada wallet that has been approved by Komodo themselves.
In order to get your dividends paid out, you need to claim your rewards at least once a year, or they will expire and you will lose your dividends.
PIVX is a privacy-focused Cryptocurrency that is applying the Zerocoin protocol in order to be as anonymous as possible.
It is a Proof-of-Stake Cryptocurrency that pays out dividends for holding the PIVX Cryptocurrency in a certain wallet.
What’s also cool is, that there is no upper limit to how many PIVX coins you can stake.
However, you need to keep the special PIVX wallet open and online in order to claim your dividends and essentially get rewarded for holding the PIVX Cryptocurrencies.
If you are constantly keeping your wallet online and collecting dividends steadily, you can expect returns of about 4.8% per year.
COSS is an ERC20 Token that is built on top of the Ethereum blockchain and it is the official Cryptocurrency of the COSS Cryptocurrency exchange.
Similar to some of the exchanges that I presented to you above, COSS is a Cryptocurrency exchange that pays the holders of its COSS Token dividends, that are as high as 50% of all the profits the COSS exchange makes.
You can essentially hold the COSS Cryptocurrency in whichever wallet you want, as you will get dividends, no matter if you are holding it on the COSS exchange or in any other Ethereum wallet.
Pundi X is a Cryptocurrency that is operating on the Proof-of-Stake algorithm and is all about creating a retail-focused Cryptocurrency, similar to how credit cards are being used today.
It also has a native NPXS Token, which pays out dividends to everybody tat is holding the NPXS Token.
In order for you to start receiving dividends for holding X’s NPXS Token, you need to buy some on an exchange like here.
Then you can just store your NPXS in any Ethereum (ERC20) wallet you want and you will receive your dividends, which will then start to compound on their own.
Another popular Cryptocurrency that pays dividends is the NAV coin.
If you don’t know, it is the first Cryptocurrency that is using a dual blockchain in order to make transactions private.
NAV is a Proof-of-Stake Cryptocurrency and is operating since 2014, and strongly based on Bitcoin’s core code.
Of course, the NAV coin isn’t just a Bitcoin copy-cat, as it has faster transactions than Bitcoin (NAV transactions take about 30 seconds to complete) and you can even decide if you would like to make private transactions, thanks to the dual blockchain, I already mentioned previously.
And of course, let’s not leave out the most important feature of this Cryptocurrency, which is that NAV pays out dividends that let you make a passive income of around 5% annually.
The last dividend-paying Cryptocurrency I am going to present to you today is the Bibox Token, which is the native Token of the Cryptocurrency exchange Bibox.
When holding the Bibox Token you receive discounts when trading on the Bibox exchange, as you will have to pay less fees.
What’s interesting about the dividends that Bibox Token pays out is, that you do not receive the dividends in the form of Bibox, but instead you get a certain percentage of the Tokens that were traded on the exchange.
So, let’s say for example that on a particular day Ethereum, Bitcoin and Litecoin were traded on Bibox.
The exchange KuCoin, for example, would convert their profits into their native Cryptocurrency KuCoin shares and pay your dividends that way.
But Bibox sees, how many Bibox Tokens you are holding, and will pay you a percentage of the traded Bitcoin, Ethereum and Litecoin, instead of converting them to their own Cryptocurrency.
Also, you don’t get paid based on just holding your Bibox Tokens, but rather by the trading activity on the platform.
To sum the whole article up, there are a lot of different Cryptocurrencies that, just like stocks, offer the possibility of receiving dividends, just by being a shareholder of the Cryptocurrency.
Most of the companies that offer dividend-paying Cryptocurrencies are using this method to attract customers to their services, like exchanges, for example.
However, it is important to distinguish dividend-paying Cryptocurrencies from Airdrops, as Airdrops are, most of the time, small and only introduce more inflation to the Cryptocurrency.
Dividend-paying Cryptocurrencies, on the other hand, are Cryptocurrencies that reward their users for being loyal holders of their coins by giving them rewards, in the form of more Cryptocurrencies, for holding their Crypto.
Now, I will just recap the top Cryptocurrencies that pay dividends and give you a quick overview of what each of them is doing.
First of all, we have NEO.
NEO is a very popular Chinese Cryptocurrency, that is often being called the “Chinese Ethereum” since it is also a platform where Smart Contracts and Decentralized Applications can be built upon, same as what Ethereum “invented”.
NEO is rewarding its holders by paying them dividends in the form of the Cryptocurrency GAS, which is a Token built upon the NEO blockchain.
KuCoin Shares are the Cryptocurrency of the popular Cryptocurrency exchange KuCoin.
Basically, KuCoin pays out 50% of all of its daily trading profits to its KuCoin Shares holders, as an incentive to keep holding the Cryptocurrency and also use the KuCoin exchange in the future.
The Cryptocurrency ARK is also a very ambitious Cryptocurrency, which is running on the Proof-of-Stake algorithm.
You are basically rewarded for picking a block producers, who is verifying the ARK network and then pays out most of his or her rewards to the people that picked him or her to be the block producer.
Neblio is another Proof-of Stake Cryptocurrency, that is using the Proof-of-Stake system, and pays out dividends.
You can expect yearly return of about 10% when holding the Neblio Cryptocurrency.
Neblio is, essentially, similar to Ethereum and NEO, as it is also building a platform that allows developers to build Decentralized Applications on top of it.
is the native Cryptocurrency of the exchange CryptoBridge DEX. This Cryptocurrency exchange is basically paying half of their profits to the holders of the , as a reward for holding on to their Cryptocurrency.
Komodo is another Cryptocurrency, that is working on decentralization features like Atomic Swaps, that should allow anybody to exchange between different Cryptocurrencies with the same hashing function in a decentralized way, without using a centralized exchange, like Coinbase for example.
Of course, it also paying dividends to the people holding it.
PIVX is a privacy-focused Cryptocurrency that is that is also using the Proof-of-Stake algorithm.
You can expect an average yearly return of 4.8% when putting your money into the PIVX Cryptocurrency.
Another native Cryptocurrency from a Cryptocurrency exchange is COSS, which is paying out half of all the profits their exchange made to the holders of the COSS Cryptocurrency.
PundiX is a Cryptocurrency running on the Proof-of-Stake algorithm and you can receive dividends by investing in its Token NPXS.
You can store these NPXS on any Ethereum wallet, as they are ERC20 Ethereum Tokens.
The NAV Cryptocurrency has been established in 2014, and is using a dual blockchain approach, to let their users switch between a normal and a privacy-focused mode when transacting on the NAV network.
When investing in the NAV Cryptocurrency, you can expect an average return of around 5%, each and every year.
And the last Cryptocurrency is the Bibox Token, which is yet another Cryptocurrency of the native Cryptocurrency exchange Bibox.
So, these are the most important Cryptocurrencies and Tokens which pay out dividends for you holding onto them.
But now I would like to turn it over to you: What is actually your favorite dividend-paying Cryptocurrency?
Maybe NEO, or the KuCoin Shares?
Either way, let me know by leaving a comment below!
Thank you for reading all the way to the end, and I hope you learned a lot from this article.