The new frontier of cryptocurrency has opened the door to potentially massive profit, but taking advantage of these new opportunities takes knowledge and common sense. Li Wei is a blockchain content strategist who has deep roots in China’s tech ecosystem. Follow his guidance on six popular ways to crank up crypto earnings in 2025, along with an honest calculation of the risks and rewards. ThrowingToken.com is here to help equip you with the information you need to make the most informed decisions while navigating the DeFi space.

6 Ways to Potentially Profit from Crypto

An even broader vision of the new crypto profits OpenSecrets’ Li Wei describes these crypto profits can be pursued through many avenues. These are activities such as trading, staking, lending, airdrops, mining, and yield farming. Each approach has its unique potential benefits and pitfalls, so careful diligence is a must.

  • Trading: This involves buying and selling cryptocurrencies on exchanges with the goal of profiting from price fluctuations.
  • Staking: This process involves holding cryptocurrency in a wallet to support the operations of a blockchain network and earning rewards in return.
  • Lending: This involves lending out cryptocurrency to borrowers and earning interest on the loan.
  • Airdrops: These are distributions of free tokens to wallet addresses, often as a promotional tool for new projects.
  • Mining: This involves using computing power to validate transactions on a blockchain network and earning rewards in the form of newly created cryptocurrency.
  • Yield Farming: This involves providing liquidity to decentralized exchanges (DEXs) and earning rewards in the form of transaction fees and token incentives.

Trading: High Risk, High Reward

Risk involved Trading crypto can be incredibly lucrative – but one of the greatest risks the market poses is overestimating this opportunity. Li Wei makes it clear that success in trading goes beyond simply building a portfolio to active management, ongoing monitoring, and mastery of economic dynamics.

Trade requires hours of preparation, monitoring market trends and changes in real-time, and executing trades based on availability and demand quickly. The new risk level is maximum. You can lose a lot of money very quickly, as the crypto market is one of the most volatile markets there is. It only takes one badly timed trade to erase a company’s capital. The rewards are tied to short-term price movements, requiring traders to employ strategies like scalping, day trading, or swing trading. This approach requires a huge continuous time investment just to keep up and respond to changes in the marketplace. Trading puts participants on the wrong side of everyday market volatility.

Staking: A More Stable Approach

Compared to the boom-and-bust world of crypto trading, staking provides a steadier, more passive way to earn crypto rewards. By staking their coins, users not only help protect their network and keep it secure, but receive various staking rewards.

Staking consists of locking up your coins and being rewarded for it with very little day-to-day effort. On the whole, staking poses fewer risks than trading. Rewards are typically based on how much you stake, how long you stake it for, and the blockchain’s individual protocols. Rewards are typically given as an annual percentage yield (APY) on the staked sum, with returns being fairly static. In summary, staking doesn’t take much time outside of the initial setup process. Staking acts as a buffer against short-term market fluctuations. You’re double dipping and making money regardless of what happens to the short-term prices in terms of trading pairs. For instance, staking Bitcoin can earn you 5% APY and Ethereum staking up to 6% APY.

Lending: Earning Interest on Your Crypto

Lending crypto. These marketplaces match lenders to borrowers, and lenders make their return by earning interest on the assets they lend out.

Lending means depositing your digital assets onto a platform so that others may borrow them, earning you interest income in the process. The investment risk is directly related to the security of the platform’s data and the credit risk associated with its borrowers. In this scenario, rewards are based on prevailing interest rates and demand for the asset being lent out. The time investment is very small, since the web-based platform manages the entire lending experience. In this, you stop worrying about daily price swings, because you’re always earning interest. The downside risk of the underlying asset, however, is always subject to volatility.

Airdrops: Free Tokens with Potential

Airdrops can be an interesting and lucrative way to earn new tokens, but it is important to be safe and careful. With the rise of scams, Li Wei recommends doing your homework.

Understanding Airdrops

A standard crypto airdrop gives users tokens for free without them needing to have interacted with the project beforehand. It incentivizes proactive involvement, creates greater public awareness, and fosters increased public participation.

Types of Airdrops

  • Standard Airdrop: Users express interest to receive the airdrop.
  • Holder Airdrop: Users holding a specific amount of existing coins or tokens qualify for tokens.
  • Bounty Airdrop: Users complete tasks, such as promoting the project on social media.
  • Exclusive Airdrop: Users are selected or invited by the project team or partners.
  • Raffle Airdrop: Random selection of eligible wallets to receive tokens.

Participating in Airdrops

  1. Have a web3 crypto wallet (e.g., Kraken Wallet) that supports the token.
  2. Provide your wallet address and any other required information, or complete the required tasks.

Safety and Maximizing Profits

Avoid pump-and-dump schemes, due diligence is key with the right project, invest what you can afford to lose. Verify airdrop authenticity through official channels. Follow for news of upcoming airdrops, prioritize those with long-term viability, and diversify your participation.

Mining: Powering the Blockchain

Mining is the process of using specialized hardware to validate transactions on a blockchain, which in turn earns you rewards. While potentially lucrative, it entails huge upfront investment costs as well as specialized technical know-how.

Mining requires a large monetary investment in specialized hardware and significant energy expenditures to solve cryptographic puzzles, which confirm transactions and secure the network. The stakes could hardly be higher. This is largely because of the high cost of equipment, the major electricity usage associated with mining, and the uncertain worth of mined cryptocurrencies. The reward is earned through both the release of newly minted coins and transaction fee rewards. Continuity of operation and oversight is essential to competitiveness in the mining industry. Miners have to contend with the volatility of the cryptocurrency they’re mining. Simultaneously, they must face the growing challenge of an increasingly difficult mining process.

Yield Farming: Navigating the DeFi Landscape

Yield farming can provide extremely high returns, but it has steep risks associated with it. Such risks are diverse and wide ranging, between impermanent loss and vulnerabilities in smart contracts.

Yield farmers are the liquidity providers on DeFi decentralized exchanges, making them the market makers that earn rewards from transaction fees and governance token distribution. The risk is compounded further by market volatility, smart contract vulnerabilities, and the risk of impermanent loss. The upside potential is huge, with some popular farms offering annual percentage yields (APY) in the three- or four-hundred percent range. Yield farming is not a passive income stream—it needs constant hands-on management to avoid losses and maximize yield. Farmers are deeply exposed to the volatility of the underlying assets that make up a liquidity pool. The risks to them include those associated with unaudited or badly designed smart contracts. Regulatory uncertainty adds to the risk.

Risk vs. Reward: A Summary

Li Wei The level of risk and potential reward is very different among these six approaches. Staking and lending offer lower-risk, more stable returns. Unlike these risk-free options, trading, mining, and yield farming are riskier ventures that can result in jaw-dropping profits.

  • Risk Level: Staking (or lending) is generally considered the safest option. Mining (or liquidity mining) carries higher risks.
  • Potential Returns: Mining (or liquidity mining) offers potentially higher returns. Lending (or staking) typically offers lower but more stable returns.
  • Liquidity Requirements: Mining (or liquidity mining) often requires providing liquidity to a pool, which can tie up funds. Lending (or staking) typically requires holding a certain amount of cryptocurrency.
  • Volatility Risk: Mining (or liquidity mining) carries a higher risk of impermanent loss. Lending (or staking) is less exposed to this risk.
  • Smart Contract Risk: Mining (or liquidity mining) involves interacting with smart contracts, which can be vulnerable to exploits. Lending (or staking) typically involves fewer smart contract interactions.

Li Wei stresses that careful research needs to be done. His advice is to get smart on the underlying technology and understand your own risk tolerance. ThrowingToken.com would like to advise readers to stay tuned and do your research and invest wisely in the fast-moving world of DeFi.