How To Make Money On EOS
If you’re not sure what EOS is and why it’s such a potentially good money making tool, don’t worry, I’ll be explaining it all in this article.
But for now, let me just say this…
There is so much potential to build multiple income streams on EOS it’s crazy. Yes, this tech is in its infancy, yes it’s volatile.
If EOS gets mainstream adoption (which I think it will), then the money making opportunities on EOS that I’ll be sharing with you below could be extremely lucrative.
A quick word of warning, this article is classified as ‘Extremely Geeky‘.
So Geek-Out at your discretion!
Table of contents:
- What the EOS?
- Why is EOS so important?
- How do you actually make money on EOS?
- How does the EOS token have value?
- How to make passive income with EOS Airdrops.
- How do you collect Airdrops?
- How to make passive income staking tokens.
- Get free tokens from EOS side-chains
- How to make money with EOS Airgrabs
- Make money leasing your EOS tokens
- Make passive income leasing EOS tokens
- Earn free tokens using EOS Dapps
WHAT IS EOS
EOS is a decentralized operating system built on the blockchain, and it has the potential to become the internet 3.0
What sets EOS apart from other competing blockchains is its ability to scale, because of their unique consensus mechanism called Delegated Proof Of Stake (or DPOS). Without getting too geeky (if I haven’t already), DPOS basically is a trust-less way of validating lots of transactions very quickly.
The current record number of transactions per second is over 9,000.
In contrast, Bitcoin can process roughly 5-7 transactions per second.
EOS, however, is not trying to compete with Bitcoin in becoming digital Gold, instead, it aims to create an entirely new way of interacting on the internet, where privacy, encryption, and aligned interests are baked into its core.
The company behind releasing the open source code that powers the EOS blockchain to the community is called Block One, and they raised over $4 Billion in the biggest crowdfunding token sale in history. And, the majority of that $4 Billion war-chest has been allocated for venture funding of Dapp’s (Decentralised Applications).
Are you getting excited yet…
I certainly am and I’m just getting started.
SO WHY IS EOS IMPORTANT?
Well, let’s take Facebook as an example.
Facebook gives you access to their platform for free, and in return, they sell ALL of your data to advertisers and make money (over $15 Billion in 2017).
Something seems a little off here…
You and me and everyone else on Facebook are all adding huge amounts of value to the platform (in the form of our data), yet Facebook Inc takes 100% of the profits. Kind of doesn’t seem quite fair.
Also, where are Facebooks interests aligned?
Is it in creating the best possible product for you and me? Or is it in gathering the most amount of data possible (at any cost) to sell to advertisers?
Obviously, their interests are more aligned in providing the most comprehensive data sets to their advertisers.
To cut a long story short, this is one of the big problems that EOS can solve.
Let me explain…
A decentralized version of Facebook could be built on EOS. And because it’s decentralized, no single entity controls it. And because it’s not owned by a centralized company, it’s able to operate in a very unique way. In a way that captures value and aligns it in a very different way.
On Facebook, all of the data you and I share is monetized, and sold to advertisers. With all of the funds going to Facebook Inc. This model has worked well in the past as it has meant that we can use their products for free.
However, on EOS the distribution of those funds can be aligned in a much more effective way.
Because there are no shareholders demanding profits, that distribution of value can be dispersed to the users. To you and me.
The more value you add to the network, the more you get rewarded.
EOS is going to disrupt any and all platforms like this in the very near future. Think Airbnb, Uber, Twitter etc. Basically, any centralized for-profit platform is going to get a severe shakeup.
And I personally can’t wait :)
HOW CAN YOU MAKE MONEY ON EOS?
There are sooooo many interesting, unique ways to make money on EOS (I’m going to be sharing all of them below so don’t worry), but I’m going to start off from the top down, with the EOS token.
HOW DOES THE EOS TOKEN HAVE ANY VALUE?
Stick with me here, as this may be a little hard to get your head around, but if you can follow along, you will be able to see why EOS is potentially so lucrative…
Each EOS token entitles you to a certain percentage of the network resources:
- Processing power
In a way, it’s like buying up blockchain real estate.
Let me explain.
Let’s say you have 100EOS tokens. These tokens entitle you to eg. 1 millionth of the network resources.
Following along so far?
Let’s say a company wants to build a new version of Twitter on EOS, they’ll need a certain amount of resources to run their application (bandwidth, storage, processing power). To access those network resources they’ll either have to buy EOS tokens, or they could rent the resources from people like you and me.
As more and more applications are built on EOS the demand for EOS tokens (network resources) will go up, which in turn will push up the EOS token price.
Not only that, but as the EOS system expands and grows over time, 1 EOS will represent proportionally more and more network resources (bandwidth, storage, processing power).
A great way to think of it is like digital real estate.
By owning EOS tokens, you literally own a portion of the network. And, as a part owner of the network, you have a say as to how the network should evolve.
To get a better understanding of the unique value proposition of EOS, check out this video below from Kael at the ‘Awakenment‘:
HOW TO MAKE PASSIVE INCOME WITH AIRDROPS
Firstly let me explain what an Airdrop is.
Actually, before I get to that, let me explain a few little bits.
Firstly, we had the IPO (or Initial Public Offering). An IPO is a way of big ass private companies raising money to expand their businesses. The problem with IPO’s is they’re ridiculously expensive and only available for accredited investors.
Not great for the average Joe like you and me.
In 2017 we saw the rise of the ICO (Initial Coin Offerings). ICO’s removed the expenses of an IPO entirely, and they also opened up the sale everyone and anyone.
The money raising process for an ICO goes like this:
- Send Bitcoin or Ethereum or $USD to a certain account
- Receive back Tokens (or Coins) in exchange
Super frictionless, but vulnerable to a lot of scams with the absolute lack of regulation.
Pretty good for you and me, but it can because you’re sending your funds to an unknown account, it can be risky.
Now let’s talk about Airdrops, and why I think they could be the most efficient form of value creation we’ve ever had…
If I am creating a new application on EOS with an integrated native token, I can do something called an Airdrop.
Let me explain.
Let’s say I create a social media app called ‘King Dong’. The native token supply of ‘King Dong’ is 1 million tokens. As the app developer, I am going to keep 200,000 of the ‘King Dong’ tokens, and I’m going to Airdrop all of the other 800,000 ‘King Dong’ tokens to the EOS community.
So how has this actually helped me raise any money I hear you ask?
Well here’s the genius bit.
With the 800,000 tokens now liquid and distributed to EOS holders, the market now decides whether the tokens actually have any value.
If my app ‘King Dong’ is shit, then the market will value my tokens as worthless. But, if it’s actually good, if people actually use it, if there is a real utility to the token, then the market will assign it a value.
Because these tokens are easily tradable, the price discovery is very simple. If the market demand and sentiment values my tokens at $1 each, I have effectively raised $200,000.
Nobody ever had to risk any money (like with IPO’s and ICO’s), there was zero risk to any of the EOS holders who received the Airdrops, and the app developer raises funds to improve their product.
This is how money/value is actually created.
For a list of current and upcoming EOS Airdrops click here.
OK COOL, I’M FROTHING ON EOS AIRDROPS, BUT HOW DO I GET THEM?
There’s not a whole lot you have to do to get these Airdrops.
You pretty much just have to have your EOS stored in a wallet (where you control the private keys) to receive them.
Once you have your EOS stored securely in your wallet you’ll simply receive these Airdrops as and when new projects are launched.
Here’s a look at some of the Airdrop tokens I’ve received already:
The EOS main-net has only been launched a little over 5 months (as of the time of writing), and there’s already all of the above (and more) Airdrop tokens distributed. I expect the number of Airdrops to increase over the coming months and years.
So, by simply holding EOS tokens in a secure wallet, you’ll generate a passive income from projects Airdropping tokens to you.
This may only be a small sum at first, but as the EOS network grows and matures, you can expect some of these Airdrop tokens to be worth a considerable amount in the future.
HOW TO MAKE PASSIVE INCOME WITH STAKING
Staking is a mechanism whereby you ‘Lock’ up your tokens for a certain period of time.
By staking your tokens you’re effectively taking the tokens out of the circulating supply for a period of time. This has the knock-on effect of increasing the scarcity of the token, in turn putting upward pressure on the token price.
The fewer tokens in circulating supply, the higher the probability of an increase in price.
Because of this, different projects may choose to offer incentives for users who stake their tokens, usually in the form of passive income via new tokens.
The reason a project may do this is two-fold.
Not only do they want to reduce the selling pressure of their tokens in the open market, they also want to reward long-term believers in their projects.
In the future (very near future hopefully), staking rewards will be in place for staking your EOS tokens. At present, there is no incentive to do so other than to vote for block producers (I won’t go into that in this article but put simply, there’s currently no financial incentive to stake your EOS tokens).
However, this is set to change in the very near future. I’ll keep you updated if/when it does.
So that’s how you make passive income staking your EOS Airdrop tokens.
Not bad hey!
HOW TO MAKE MONEY FROM EOS SIDE CHAINS
Because the EOS.io software is open source (not owned by anyone) it’s free to be copied and altered. And this is how new side chains are formed.
Put simply, a side chain may choose to take the EOS.io code base and make certain alterations to it, to serve a unique purpose.
Take Worbli for example.
The first EOS side chain with the primary objective of being the financial district of EOS. Worbli aims to be the first fully compliant blockchain eg. KYC (Know Your Customer), AML (Anti Money Laundering) etc.
Because they are a side-chain of the original EOS main-net, they are doing an Airgrab (I’ll be explaining what an Airgrab is in a moment) to all EOS holders. So essentially, just by holding your EOS main-net tokens, you’re entitled to a certain proportion of the side-chain.
And, Worbli is not the only side chain (there’s many more in the pipeline like Telos). In fact, over time, it’s very possible that there will be hundreds, if not thousands of side-chains all running together.
So, yet another way of making money from owning EOS tokens.
Oh yeah, Airgrabs, nearly forgot…
HOW TO MAKE MONEY WITH EOS AIRGRABS
Ok, so what exactly is an Airgrab?
Well, they’re virtually identical to Airdrops in every way, except, you have to physically go and claim your tokens. Claiming your tokens can take place in a number of different ways depending on the motives of the project distributing them.
For example, some projects may request that you go to their website and enter your email address in return for your tokens, others may choose to send you through a survey, and others may simply ask for you to claim your tokens simply by verifying a transaction (this sounds geeky, but it’s actually pretty straightforward).
So why do they make you jump through these loops?
Firstly, some projects may want to make sure you have a vested interest in their product before giving you tokens, which is fair enough I guess. Others may choose to do it to save money on network fees (it takes a fair amount of resources to carry out a successful Airdrop).
Either way, the result is the same.
You basically have to go ‘grab’ your tokens rather than them simply getting ‘dropped’ into your wallet.
Is it worth doing?
Maybe not with all of them, I’m sure many will fail and become worthless, however, some won’t, and you don’t want to miss out on those ones.
HOW TO MAKE MONEY FROM LEASING TOKENS
At the moment with EOS being in its infancy, token leasing is not hugely lucrative.
However, as the network matures and resources become more expensive (remember the “digital real estate” analogy mentioned earlier), the costs for Dapp developers to run their applications on EOS will increase.
The increase in the cost of resources will increase the viability of token leasing. Currently, the market demand for leased tokens is very small (you’ll likely only receive .5% for 3months leasing of your tokens), but as the demand for network resources ramps up over the coming year/s token leasing will become increasingly lucrative.
Currently there is only one leasing exchange for EOS tokens called Chintai, however, this is soon to change with the introduction of the REX (Resource EXchange) developed by Block One.
I expect this to be an incredible passive income stream in the coming years.
It’s just a bit of a waiting game on this one at the moment.
HOW TO MAKE MONEY USING EOS DAPP’S
This is the fun part.
Actually making money for using everyday applications that you’d already use!
As I mentioned earlier, this is made possible because the unique way that you can align interests between Dapp developers and Users. As a user interacts with the application and adds value to the ecosystem (using clever token economic, it’s possible for the user to get rewarded for their actions.
Let’s take the (current) number 1 Dapp in the world, EOS Bet Dice for example.
EOS Bet Dice is basically an online gambling platform. But, what sets EOS Bet Dice apart from traditional online gambling sites is that:
- It’s provably fair (because it’s on the blockchain it’s powered by a transparent smart contract that can be tested, and is provably fair).
- The token economics of the EOS Bet Dice game is full of clever incentives for their users. So you basically get paid to bet (to a certain extent at least).
Now, I’m not a gambler myself, but it’s the token economics model that really excites me. It’s just the tip of the iceberg as to what’s to come.
This next bit gets a bit techie once again, but the guys at Maple Leaf Capital do a great job of dissecting the value proposition of EOS Bet Dice and its native token (if you’re not interested in token economics, skip over this part):
(1)This HK team is 20 strong with 8+ years of experience developing mobile & online games with 100+ product launches under their belt and a few games w/ 1mm+ active users and 10 mm+ downloads. DICE is their 1st gaming project in crypto.
(2)The team is highly experienced & professional in the sense of v. fast development speed/iteration, well-versed in gamification/incentives/marketing/community building to maintain user activity. These 2 are extremely important as EOS grows:
(3)Ultimately, casinos on EOS won’t be just about DICE – every team needs to work fast to iterate new games to retain & expand user base beyond those just here for the tokens into those that actually want to gamble…
(4)…and if one dreams the dream, EOS should carry much more than 400k unique accounts, so any EOS-based casino must have a strong-onboarding process to capture incremental growth & volume and, better yet, actually brings users to EOS.
(5)Whoever maintains the largest bankroll, pays the lowest edge, is the fastest to create/copy new good games, most proficient in keeping users (especially whales), and best at onboarding new users will win this war. DICE is executing beautifully.
(6)A few new additions continue to push DICE in the right direction further: Lottery adds positive expected value to every better’s formula which keeps DAU/hour high – and eventually becomes reciprocal (bigger pot + more games = more betting)
(7)…and the member system (which will be more full-fledged) with perks to maximally incentivize betting and retaining big betters – daily quests, rankings, free CPU resource, VIP monetary perks, etc all linked to on-chain bet volume
(8)The lottery is launching in a few days, the member system should be out within 1 month, and beyond that, within 6 months, the DICE team will be ready to turn itself into a platform for 3rd party casino games (much like iOS App Store / Google Play)
(9)…whereby the platform provides all the infrastructure (member system, marketing spend, code auditing, profit-sharing platform, etc) to allow any developers to maximize profits in the shortest amount of time (immediate user base, large bankroll, etc)
(10)For a DICE diluted market cap of ~50 mm USD today with 2-4 mm EOS of daily volume (and still 150-250% annualized dividend yield), only this kind of scaling said above can propel it to another 10-20x in valuation – especially having a “franchise-value” premium.
(11)It’s a very high bar fraught with risk (after all, a 20x would make DICE a unicorn) whereby incremental volume from currently non-EOS community is absolutely necessary. But the token mechanics and the team’s execution give them a shot at it.
(12)The very important enabler here is the DICE token – importantly, one shouldn’t view it as equity (as DICE owner isn’t entitled to the bankroll) but as royalty right (for DICE owners) / capitalized marketing expense (DICE dev team) combined.
(13)To view it from the DICE dev team’s perspective, the setup is no different vs. 100 dollar of revenue, 50 spent on marketing, 10 on core team salary & additional events, and 40 reinvested in the business.
(14)I would argue that this 50% split to DICE owners as marketing generates extremely high ROI – not only would DICE owners be more incentivized to play on the same platform (all else equal), but they would do a lot (myself included) to promote it
(15)… so as to maximize value for their own DICE. For a nascent industry like crypto, the DICE owners may go even as far as hand-holding gamblers to set up EOS accounts just to get them on-board. Such viral effectiveness must not be underestimated.
(16)A big DICE community with strong appreciation expectation is a formidable marketing machine that continuously and voluntarily on-boards new EOS users to this platform, which helps betting volume, which begets a bigger community, a positive flywheel.
(17)…and at the same time, any competition that tries to undermine this flywheel will be attacked vehemently, or at least alerted to the team so they can react quickly. It’s basically also outsourced scouting, R&D, and customer service.
(18)Of course, all such effects disappear when the community feels mistreated, when team mis-executes, and/or when DICE appreciation expectation disappears. This lever cuts both ways – and the team must treat community well to reap the benefits.
(19)Staking is very clever — it forces a staked DICE owner to at least help the platform for 24 hours, separates miners and investors / potential marketers (and penalizes short-term participants that bring no value to the ecosystem beyond just volume)…
(20)… and forces those who want to own DICE to play (instead of buying in exchange) due to liquidity. To that point, currently with 94.5% staked and 0.001 EOS / DICE, there’s only 1 mm USD in circulation in exchange and it’s absolutely tiny.
(21)Down the road, I would not be surprised more perks are coming for staked DICE owners to incentivize staking. For instance, why not lower house edge, exclusive promotional events, and higher referral reward only for those that stake (more) DICE?
(22)The last point I want to touch on for the already long post is about mining/halving: one mines DICE by playing because the mining cost via airdrop is below expected exchange price (whether it’s long-term hold, liquidity-driven, or immediate flip).
(23)At the beginning of a project, ICO through this way by attracting miners can rapidly raise awareness of a project; but as time goes on and rewards drop, it’s paramount for a project’s success to migrate its user base from miners to actual players.
(24)The mining ratio puts a lid on the token price – semi-riskless arbitrage means that the more DICE token rises above the implied mining cost, the more miners will bet/mine and sell the tokens immediately in the exchange.
(25)Barring investor exuberance, liquidity events (like exchange listing) and/or rightful expectation of meaningful gambler adoption (such as EOS on-boarding gets a lot easier), the DICE token price’s upper bound should be the implied mining cost…
(26)Whereby the token price floor is set by the on-going expectation of continuous execution, organic adoption, etc. In a sense, the existing DICE holders’ dividend creates natural buying pressure given the sizeable portion of “believers”.
(27)When the on-going positive expectation exceeds the upper lid created by mining cost, the betting volume should explode upward as miners and gamblers alike join in betting, thereby accelerating time to halving.
(28)At the meantime, the miners aren’t “bad” per se – they create the important liquidity to willing DICE buyers, keep the token price reasonable, and transfer their wealth to the staked DICE owners via dividends.
(29)Ultimately, it’s up to the team to drive growth and volume; the mining cost doesn’t determine the token price for DICE. This mechanism just puts the team on a hamster wheel to keep churning out more and better mechanisms.
(30)Assuming the team continues executing, I personally think it’s not unreasonable to see a 2 x from today’s price post next halving and another 2 x after the next one. The team is leagues above what I see in the space and had proven its capability.
If you want to learn how to get set up and play on EOS Bet Dice click here.
Blockchain technology and EOS for that matter are in its infancy and can be incredibly volatile (in fact they’re the most volatile asset class in the world right now :), so don’t go throwing all of your money into EOS just because of this article.
However, this shit has the power to change the world. In fact, many have argued that the impact of blockchain technology will surpass that of the internet in time to come.
I for one am sold on it as a technology, and as you can see from this article there are so many ways to make money on EOS already, and over time that is only going to increase.
I’m not going to sit on the lines for this one, and I’m going to make sure I’m involved.
I’ll be keeping this article updated as new models and opportunities arise with money making opportunities on EOS, so stay tuned.
I’m sure there’s a bucket load of questions about this article and that’s totally cool. Just chuck’em in the comments below and I’ll do my best to answer every one.