The next 100 million crypto investors.

Health, Wealth, and Happiness

December 7, 2022

“Nurture your mind with great thoughts, for you will never go any higher than you think.”

— Benjamin Disraeli

In today's issue: Dividends are like money snowballs.

Many traditional stocks pay dividends which can be reinvested in the stock to earn more dividends. If the stock price grows over time, this accumulation can grow into a "money snowball."

Some crypto investments also pay dividends, allowing you to earn more tokens that can be reinvested to earn even more dividends. It's a "crypto snowball."

In today's issue, we've updated our research on the Best Dividend-Paying Crypto Investments for 2023. Read on and let it roll.

Must Read

Today's most important story for crypto investors.

UNI Surges After "Fee Switch" Vote (The Defiant)

Regular readers know we're bullish on Uniswap, the world's largest decentralized exchange. We're even more so after the collapse of centralized exchanges.

We've told you about Uniswap's plans to test sharing a portion of trading fees with UNI holders. This would essentially result in regular dividend payments to all UNI holders.

That proposal inched one step closer to reality with the latest vote. They're starting small by setting aside a portion of trading fees into a treasury to see whether liquidity providers will stick around (since the fees are coming out of their take).

If the experiment works, however, UNI holders will eventually begin earning yield on trading fees. This could send the token soaring (it's already up on the anticipation).

Investor takeaway: The fee sharing arrangement is far from certain, but if you believe in the long-term potential of Uniswap as we do, it could be a good time to hop on board the unicorn.

Best Dividend-Paying Crypto Investments for 2023

by Anatol Antonovici

Overview: You already understand the benefits of long-term investing in cryptocurrencies, but perhaps you’re not aware that some crypto investments have another significant money-making advantage: you can receive regular payments in the form of dividends.

In this piece, we’ve researched the Top Dividend-Paying Cryptocurrencies for 2023 ranked by market capitalization, availability, and popularity. We’ve even estimated your annual dividend payments. Read on.

LooksRare (LOOKS)

Market Capitalization: $62,600,000

Daily Trading Volume: $4,089,657

No. of Supported Exchanges: 35

Size of Community (Twitter followers): 238,700

Estimated Annual Dividend: 16.11%

LooksRare is a decentralized non-fungible token (NFT) marketplace that encourages traders and collectors to use the platform through a system of hefty rewards. The NFT platform, which was launched at the beginning of 2022, has offered over $1.3 billion in rewards to its users.

The ultimate goal of LooksRare is to dethrone OpenSea, which is currently the largest NFT marketplace by trading volume. LooksRare charges 2% on NFT sales compared to OpenSea’s 2.5% fee. On top of that, it implements a community-driven approach and has an intuitive interface.

LooksRare’s native token is LOOKS. It has a maximum supply of one billion tokens, with almost half of them currently in circulation. Unlike OpenSea and other centralized marketplaces, LooksRare distributes all NFT sale fees to LOOKS stakers, offering a dividend-like reward.

The trading fees and rewards are paid in WETH (Wrapped Ethereum), with LOOKS stakers being eligible to accrue rewards on a daily basis.

LooksRare offers two staking options: LOOKS Compounder and Standard Staking. The latter is an active form of staking that enables users to earn LOOKS and WETH with a total annual percentage return (APR) of 42.44% as of this writing.

The compounder mechanism automatically turns users’ WETH earnings into more LOOKS, increasing the APR figure to over 51% as of today.

LOOKS has a fluctuating price and is currently trading at $0.13. It peaked at nearly $7 shortly after its launch in January 2022 but has been under bearish pressure amid the crypto winter. (BMJ Score: 4.5 out of 5)

VeChain (VET)

Market Capitalization: $1,351,925,447

Daily Trading Volume: $34,201,183

No. of Supported Exchanges: 100+

Size of Community (Twitter followers): 588,000

Estimated Annual Dividend: 1.34%

VeChain operates as a platform for smart contracts, similar to NEO and Ethereum. It boasts a highly scalable Layer-1 blockchain infrastructure that is eco-friendly.

One of VeChain’s great perks is that it pays “dividends" in the form of VTHO coins. Users have to hold VET tokens in their wallets to receive VTHO tokens. The payout is at a rate of 0.00042 VTHOR tokens per day per staking of 1 VET. The yearly dividend is about 2.2%. (BMJ Score: 4.0 out of 5)

KuCoin Shares (KCS)

Market Capitalization: $660,120,304

Daily Trading Volume: $1,367,201

No. of Supported Exchanges: 4

Size of Community (Twitter followers): 2.3 million

Estimated Annual Dividend: 5.93%

KuCoin is a popular centralized crypto exchange founded in 2017. Kucoin’s latest financing round held in May 2022 points to a valuation of $10 billion.

The native token of the crypto platform is KuCoin Shares (KCS), an ERC-20 token. Users holding KCS in their KuCoin exchange wallets receive daily staking rewards that amount to 5.53% annual returns. The daily dividends are paid from 50% of the exchange’s daily revenue from trading fees.

To become eligible for the rewards, users have to hold at least 6 KCS, which is about $100 based on the current price. (BMJ Score: 4.0 out of 5)

NEO (NEO)

Market Capitalization: $476,049,866

Daily Trading Volume: $35,123,100

No. of Supported Exchanges: 150+

Size of Community (Twitter followers): 428,000

Estimated Annual Dividend: 2.73%

NEO – formerly known as AntShares – is a popular blockchain supporting smart contracts. It's often dubbed the “Chinese Ethereum.” It made waves during the ICO craze, but it's lost ground against competitors like Solana, Avalanche, Polygon, and Polkadot, among others.

The NEO ecosystem is fueled by the NEO token, which holders can lock in the NEO wallet to receive dividends in the form of GAS tokens. Note that NEO’s GAS is different from the gas fees paid on Ethereum. On NEO, GAS is the second token, and is also used for the operation and storage of tokens, smart contracts, and for dividend rewards.

The price of NEO is $6.75 as of this writing, down from $26 at the beginning of the year. Elsewhere, the price of GAS is $2.27, down over 60% year-to-date.

The annual percentage return on NEO is over 2%. As a rule, for every NEO token you hold, you receive 0.0003 GAS per day. (BMJ Score: 3.5 out of 5)

AscendEX (ASD)

Market Capitalization: $52,295,668

Daily Trading Volume: $1,902,240

No. of Supported Exchanges: 5

Size of Community (Twitter followers): 214,900

Estimated Annual Dividend: 9.09%

AscendEX, formerly known as BitMax, is a centralized cryptocurrency exchange launched in 2018. Last year, it rebranded to adopt the new name, which better reflects the team’s belief in the bright future of digital assets and avoids confusion with Bitmex, another crypto exchange.

Today, AscendEX handles about $100 million in trading volume per day. At the end of 2021, the exchange admitted it was hacked, with experts estimating that about $80 worth of digital assets had been stolen. Nevertheless, the Singapore-based exchange handled the situation and covered the stolen funds.

The ecosystem is fueled by ASD (formerly known as BTMX), which represents an ERC-20 token. ASD holders can receive daily rewards and enjoy lower trading fees. About 80% of the profits made by the exchange are distributed as ASD-staking bonuses.

Users can buy the so-called ASD Investment Multiple Card, which can multiply the potential return. For example, if you have 10,000 ASD in your cash account and buy the card, the individual share of the platform distribution pool will be multiplied by 5. In other words, 10,000 ASD with Multiple Card has the same individual share as the investment of 50,000 ASD. (BMJ Score: 3.0 out of 5)

Neblio (NEBL)

Market Capitalization: $42,760,370

Daily Trading Volume: $49,119,733

No. of Supported Exchanges: 3

Size of Community (Twitter followers): 90,100

Estimated Annual Dividend: 10.00%

Neblio, launched in 2017, is a distributed computing platform for enterprise blockchain applications and services. NEBL holders can receive up to 10% in interest per annum by staking their tokens in the Neblio network’s proof of stake protocol. (BMJ Score: 3.0 out of 5)

Komodo (KMD)

Market Capitalization: $27,434,170

Daily Trading Volume: $2,245,234

No. of Supported Exchanges: 20

Size of Community (Twitter followers): 117,200

Estimated Annual Dividend: 5.10%

Komodo was launched in 2016 as a privacy-based digital currency that leverages zero-knowledge proofs to enable users to make private financial transactions. The multi-chain platform enables projects to create their own blockchains and host token sales.

Komodo is a hard fork from Zcash, which is itself a privacy-oriented fork of BitcoinDark. The Komodo platform also hosts a decentralized exchange (DEX) and blockchain development solutions.

Users who want to receive dividends should hold at least 10 KMD tokens in their wallets. The dividends, which Komodo calls active user rewards, should be claimed on a monthly basis. The annual interest on KMD tokens exceeds the 5% mark, which is impressive.

The price of KMD is currently fluctuating near 20 cents, down from $0.74 at the beginning of the year. (BMJ Score: 2.5 out of 5)

PIVX (PIVX)

Market Capitalization: $16,460,120

Daily Trading Volume: $579,128

No. of Supported Exchanges: 14

Size of Community (Twitter followers): 69,400

Estimated Annual Dividend: 8.88%

PIVX (Private Instant Verified Transactions) is a privacy-focused digital currency launched in 2016 as a code fork of Dash to provide users with anonymous financial transactions using its “sub-currency” zPIV.

PIVX uses the Proof of Stake Zerocoin protocol which enables users to stake their coins to secure the network. As a reward, users who stake their coins will receive new PIVX coins that amount to around 4.8% per annum.

To earn PIVX dividends, users have to set up masternodes by locking up 10,000 coins in collateral. The price of PIVX is $0.11 as of today, down from $0.55 at the beginning of the year. (BMJ Score: 2.0 out of 5)

NAVCoin (NAV)

Market Capitalization: $3,218,381

Daily Trading Volume: $1,000

No. of Supported Exchanges: 6

Size of Community (Twitter followers): 56,500

Estimated Annual Dividend: 5.16%

NAVCoin was launched in 2014 to add privacy to digital currency transactions. Through its dual blockchain system, NAVCoin users can make anonymous financial transactions on the NavTech subchain. Interestingly, Navcoin uses a PoS consensus mechanism to secure its network.

Users can stake NAV to receive dividend-like rewards that amount to about 5% per year. (BMJ Score: 1.5 out of 5)

Bibox

Market Capitalization: $976,461

Daily Trading Volume: $161,113

No. of Supported Exchanges: 3

Size of Community (Twitter followers): 92,000

Estimated Annual Dividend: 8%

Bibox is a Chinese crypto exchange that provides decentralized financial services to users. Launched in 2017, it has been promoting itself as the first AI (artificial intelligence) crypto trading platform, although it's lost momentum over the years.

BIX is the native token of the exchange. Holders are eligible for dividend-like rewards if they lock at least 500 BIX and trade at least once per week. The rewards are paid in ETH, and you can expect the APR figure to exceed 8%.

It’s worth noting the BIX price has consistently declined from over $3 in 2018 to the current level of one cent. (BMJ Score: 1.5 out of 5)

Dividends are like crypto snowballs.

What are Cryptocurrency Dividends?

In traditional finance, dividends are regular payments made by companies to stockholders. The value of dividends derives from a company’s profits and is decided by the board of directors.

When it comes to the crypto market, dividends represent rewards paid by crypto companies from their revenue, fees, and profits. These rewards, when reinvested in the original token, can earn more rewards: a "crypto snowball."

Don't confuse crypto dividends with staking rewards or airdrops, especially as the latter create dilution. Even though crypto dividends appear similar to staking rewards, they derive from profits or revenues made by a project, usually a centralized service like a trading platform. In the case of staking, the awards are paid to block validators who maintain the network.

This may be confusing because few projects on this list refer to their rewards as dividends.

Should You Invest in Dividend Cryptocurrencies?

To begin with, there are few cryptos that actually pay dividends. Remember that you are also ultimately relying on the price of the underlying token. If the token goes down 20% and you earn 10% in dividends, that’s still a loss of 10%.

Also, securing dividends doesn’t guarantee actual returns as they're paid in the form of the native token or ETH, both of which can decline in price and leave you with less. On the other hand, the fluctuating prices of dividends may increase and eventually multiply your holdings in dollar terms.

Our approach is to invest in quality crypto assets first, not simply because they pay dividends.

Investor Takeaway

With traditional stocks, investors receive their dividends as cash or additional shares of a company’s stock, while crypto investors receive dividend payments in crypto tokens.

As mentioned, the value of crypto dividends can vary dramatically. Although the value of any share can change in value, crypto is notoriously volatile and may result in considerable changes to your projected crypto dividend payouts. Always consider the project first and the dividend second.

ICYMI