Passive income is earnings derived from an enterprise in which a person is not actively involved on a regular basis. In the context of digital assets, this often involves earning rewards through staking, lending, or providing liquidity without constant active trading. It represents income generated with minimal ongoing effort.
Context
The discussion around passive income in the crypto space frequently involves yield farming, staking rewards, and decentralized lending protocols. Evaluating the risks associated with smart contract vulnerabilities, impermanent loss, and the sustainability of high yields are critical considerations for participants.
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