Over the past few years, crypto casinos have looked into various ways to attract players and grow their businesses, aside from offering bonuses, lotteries, and organizing social media giveaways. One approach that has attained a decent level of popularity is users locking a portion of their funds en route to snagging some passive income.
In the real world, the phrase – putting money to work often gets mentioned as something everyone should do. That is a reference to investing in securities or other assets, the process of buying and holding onto a thing, hoping that it will grow in value over time. Passive income gets defined usually as a frequent, often periodical source of earnings that does not come from an employer or contractor. It gets acquired with minimal labor and automatically. Hence, it is something that everyone desires.
Online casino operators know this, and they have sought to take advantage of the concept known as dividends to grow their player pools and what people do with the funds deposited and won on their platforms. We explain this in more detail below.
A dividend is a corporate action. That is an event that a public company, meaning one whose stocks trade on an exchange, performs, which requires the approval of its shareholders or board of directors. Multiple types of corporate actions exist, and dividend payouts are one where a business entity decides to distribute a portion of its profits to its shareholders. Naturally, that happens when a company earns a surplus. And it chooses not the reinvest these funds in full or partially. But to hand them out as a reward to those who have invested in its growth.
The origin of dividend, the word, stems from dividendum in Latin, which means – thing to be divided. In some scenarios, publicly traded companies can pay dividends even when they have not made suitable profits that are on par with their previous track record. The rate with which these payouts get handed out gets defined in a company policy, and in some cases, the payments must get approved by shareholders through a vote.
Dividend payouts traditionally get linked with stable businesses that have been running for years/decades and whose stocks seldom experience massive price dips.
Staking, in principle, is the same as holding a dividend-paying stock. It involves earning a prize for holding onto a specific asset/crypto. In terms of coin-based casino staking, the process entails locking funds (in-house tokens) for a set period in a gambling site’s vault, doing so as a method to attain a staking reward.
Now, what is a staking reward? It is a portion of the pool of accumulated player losses for the staked timeframe. How much a gambler gets paid for what amount staked in what period gets defined on a casino-by-casino basis. Those specificities get determined by each site’s management team.
Every bet (with real money/cryptos) one makes at one of these platforms earns them or brings them closer to earning one or more in-house native tokens, which usually get provided for playing proprietary provably fair games like Plinko, Crash, mines, mini-roulette, dice, limbo, ludo, and so on. So, to put it bluntly, each wager made on one of these gaming products counts towards in-house crypto tokens. Then once a user has a considerable amount of these, he can explore locking all or some of them to claim passive income in the form of various cryptocurrencies. Of course, the higher the amount staked; the better a user’s dividend payout will be. Essentially, they are assuming the role of casino investors in this process and sharing in the profits raked in. You can also buy their in-house tokens at popular crypto exchanges and stake them without attaining them via natural gameplay.
Note that most casino dividend systems customarily release a fixed percentage of the hubs’ total profits daily. The more gamblers include themselves and their funds in these schemes, the better the long-term sustainability of their prize pools and the overall success of these profit-sharing systems shall be.
As talked about above, people stake to receive dividend payouts. In other words, to profit from the gaming losses of others.
However, the reality is that the crypto casino sphere has witnessed operators manipulating their profits and their dividend pools to payout smaller prizes than those owed to users. Others have also preyed upon novice crypto gamblers who do not know how to recognize a fair distribution mechanic, one that has gotten created to supply adequate, long-term benefits.
Everyone should study the long-haul viability of individual projects because even if their staking systems seem credible and profitable today, that does not mean that they will remain smoothly running as time goes on. So, proper risk management assessments should get conducted before investing in any crypto project.
Also, we failed to mention that at some sites, staking the platform’s native token happens after one earns it automatically. Some operators select to do this because staking in-house tokens helps their creations by producing more market circulation. Locking tokens can create deflationary pressure on a project, but the rewards provided can bring inflation, so keep that in mind, also.
If you are a frequent crypto gambler, and the notion of getting passive income regularly sounds appealing, check out some of the brands listed on this page. They all run dividend-paying systems. You can read about these in-depth on their respective promo pages or those dedicated to these investment endeavors. Just be careful, as gambling tokens are not yet super popular, and some of these projects can go bust in a year or two. Though, that is a danger with most crypto investments.
No. However, many of the top crypto casinos that offer this service can be found right here on this page.
Absolutely. Generally, the way it works is this: the larger the amount staked, the better the dividend payout you will receive.
Some crypto casinos require you to actively engage in staking yourself, while others have it switched on automatically. You can typically turn off this feature, though.
It may seem counterproductive at first (paying out dividends), but it makes for a great way for casinos and betting sites to expand their player pool.
Dividends are a form of passive income. Passive income is the earning of revenue where you aren’t directly involved, for instance, royalties, investments, and, as mentioned, dividends.