How does a crypto wallet make money?

How Does A Crypto Wallet Make Money?

How Does A Crypto Wallet Make Money?

A crypto wallet makes money primarily through transaction fees, which are usually a percentage of the transaction value or a fixed fee per transaction. For instance, as of 2023, certain wallets charged an average fee of 0.5% for every transaction, while others had a fixed fee of $2.50 per transaction. Additionally, some wallets earn revenue by offering premium features, integrating with crypto exchanges, and earning interest on stored cryptocurrencies. Partnerships and affiliations with other crypto services can also provide an income stream.

The revenue model of a crypto wallet largely hinges on its type: hot or cold.

For instance:

  • Cold Wallets (offline, like hardware wallets) mainly earn from device sales, firmware updates, or associated premium features.
  • Hot Wallets (online wallets) can derive income from multiple channels such as transaction fees, interest, staking, exchange services, affiliate promotions, and more.

In this article, we explore the primary revenue streams for crypto wallets, main of which are:

  • Transaction Fees
  • Launch of a New Coin or Token
  • Interest Rates
  • Staking
  • Exchange Services
  • Affiliate Programs
  • Premium Features
WalletPrimary The Wallet Makes Money
MaiarPromote EGLD & Elrond Network
NexoDifferential between crypto loans and deposits; Farming, staking, etc.
ValoraAffiliate Service/Promote CELO, CUSD & Celo Network
StormXTransaction fees charged to merchants.
Trust WalletAffiliate Service/Transaction fees on transactions made on BSC
ExodusAssets Exchange

Table Legend: This table, based on a case study by UXBoost published on August 23rd, 2022, illustrates primary revenue channels of various crypto wallets.

Transaction Fees

Every time users send or receive cryptocurrencies using a wallet, there’s usually a transaction fee. This fee is shared between the network and the wallet provider.

For example, when using BRD Wallet, a user decides to send Bitcoin. A portion of the network fee goes directly to Bitcoin miners. On top of this, BRD may charge a small convenience fee for facilitating the transaction through its seamless interface.

This fee can either be a flat rate or vary based on the network congestion or the urgency of the transaction. Here’s a glimpse into different fee structures:

WalletFee StructureNotes
BRD WalletVariable based on networkFees also account for wallet services
Trust WalletPercentage of the amountFees lower for BSC transactions
ExodusDynamic based on urgencyFees can rise during high network congestion

Launch of a New Coin or Token

Wallets sometimes venture into launching their own tokens or coins, serving multiple purposes.

Crypto wallets can make money from the launch of a new coin or token in several ways:

  1. Listing Fees: When a new cryptocurrency is introduced, it needs to be listed on various wallets for users to store and trade. Wallet providers often charge listing fees to include these new coins or tokens in their services. This fee can vary depending on the wallet’s popularity and the coin’s demand.
  2. Referral Programs: Some wallets offer referral programs that reward users for bringing in new customers. Wallet owners can earn commissions or bonuses when they refer new users who subsequently use the wallet for transactions or storage. This helps drive user acquisition and usage.
  3. In-Wallet Trading: Wallets can enable users to trade cryptocurrencies directly within the wallet interface. They may charge a small fee for facilitating these in-wallet transactions. This convenience encourages users to stay within the wallet ecosystem for their trading needs, generating revenue for the wallet provider.
  4. Increased Usage: The introduction of new coins can attract more users to a wallet platform, leading to increased usage. Higher usage often translates into more transaction fees, which can be a significant source of revenue for wallet providers. These fees are typically generated from sending, receiving, or exchanging cryptocurrencies within the wallet.

Example: Binance, one of the largest exchanges, took this route. They introduced the BNB token, which has several utilities on the Binance platform, including being used for discounted trading fees.

Interest Rates

Crypto wallets offer interest rates on stored cryptocurrencies through various mechanisms, often referred to as crypto savings accounts or crypto lending platforms. Here’s how they work:

  1. Deposit Funds: Users deposit their cryptocurrencies, such as Bitcoin or Ethereum, into a specific wallet or platform.
  2. Lending or Staking: The wallet or platform lends these deposited cryptocurrencies to other users or entities, typically in exchange for interest. Alternatively, in some cases, cryptocurrencies are staked within the platform’s ecosystem.
  3. Interest Accrual: The interest is accrued over time based on the terms of the lending or staking agreement. Interest rates can vary widely and may depend on factors like the type of cryptocurrency, the platform, and market conditions.
  4. Payment Frequency: Interest payments can be made at regular intervals, such as daily, weekly, or monthly.
  5. Platform Profit: The platform generates profit by lending the deposited cryptocurrencies at higher rates than the interest it pays to users.
  6. Security Measures: Reputable platforms often have security measures in place to protect users’ funds, such as insurance and robust security protocols.
  7. Withdrawal: Users can typically withdraw their deposited funds along with the accrued interest at any time, although there may be withdrawal fees or lock-up periods on some platforms.

Crypto wallets that offer interest on stored cryptocurrencies differ in terms of the way they offer interest and the interest percentage. For instance:

  • BlockFi: Offers an interest account with returns of up to 8.6% APY on crypto holdings.
  • Celsius Network: Users earn weekly compounding interest on their deposits, with rates dependent on the token.


Staking in the crypto world refers to the act of holding and locking up a cryptocurrency in a wallet to support operations such as block validation on a network. For the individual staking their tokens, this can translate to earning a form of “interest” on their holdings, leading to passive income. Many wallets that support staking earn a commission or fee from the rewards garnered by users.

Staking has gained immense traction, especially in the DeFi space, where liquidity providers often stake their tokens in liquidity pools for rewards. Wallets supporting such DeFi protocols can earn a commission or fee from the staking rewards.

A practical implementation of staking can be seen in the Exodus Wallet, where users have the option to stake their Cardano (ADA). When they do, they can earn staking rewards, with Exodus facilitating this process and extracting a minimal fee from the rewards.

Exchange Services

Many wallets extend integrated exchange services, offering a seamless exchange of one cryptocurrency for another.

Wallets with integrated exchange services act as intermediaries, allowing users to swap one cryptocurrency for another without exiting the wallet interface. Wallets earn through exchange fees, which can be either a flat fee or a percentage of the transaction value.

DeFi’s surge has also seen a rise in decentralized exchanges (DEXs). Some wallets are now integrating with DEXs, enabling users to seamlessly exchange or swap tokens within the DeFi ecosystem, thereby earning through the associated exchange fees.

A notable crypto wallet providing exchange services is the Atomic Wallet that lets users make in-app exchanges between various cryptocurrencies and charges a fee, which is part of their revenue stream.

Here is how it works with various wallets:

WalletService DescriptionFee Structure
Atomic WalletOffers in-app exchanges between various cryptocurrencies.Variable based on trade.
ChangellyProvides fast crypto-to-crypto exchanges integrated into the wallet.Percentage-based fee.
ShapeShiftAllows for crypto swapping within the wallet without creating an account.Dependent on the swap.

Affiliate Programs

To expand their user base, wallets initiate affiliate or referral programs as incentives, offering existing users incentives to bring new users onboard.

Example: The Trust Wallet promotion strategy revolves around a unique referral system. Here, a user gets a specific link. When another individual registers through this link and makes a certain number of transactions, the original referrer is rewarded.

WalletAffiliate ProgramProgram Details
Trust WalletReferral BonusRewards for new users transacting on BSC
CoinbaseSignup Bonus for ReferrersReferrers earn when the referred user trades
ExodusReferral BonusEarn bonus for every new user who joins through referral

Premium Features

Some wallets offer enhanced features for a fee. These can range from heightened security measures, advanced transaction tracking, superior backup and recovery options, to ad-free experiences. Such features are tailored to cater to users who need more than the standard functionalities.

Example: Ledger Live, paired with Ledger Hardware Wallets, offers features like Coin Control for Bitcoin. This lets users choose which specific coins are utilized in transactions, an advanced functionality available for an extra charge.

Ads and Promotions

Some free wallet services display ads within their app or platform. They might also promote particular cryptocurrencies in exchange for a fee.

FAQ Section:

What are the various revenue streams associated with hot wallets?

Online and versatile, hot wallets can profit from transaction fees, interest from lending, staking rewards, exchange services, and affiliate promotions.

Do all crypto wallets charge transaction fees?

Not all crypto wallets charge transaction fees, though many do to cover operational costs. Some may offer zero-fee transactions to attract users, but it’s vital to consider any other potential charges they might have.

How do hardware crypto wallets generate revenue?

Hardware crypto wallets primarily earn money by selling physical devices. Some also offer additional software features or enhanced security services for an extra fee.

Are transaction fees in crypto wallets fixed, or can they fluctuate?

Transaction fees in crypto wallets can vary based on factors like network congestion. While some wallets have set fees, many allow users to adjust them based on their transaction priorities.

Why do some wallets offer interest on the cryptocurrency I hold?

Some wallets offer interest by utilizing a portion of users’ held cryptocurrencies for activities like lending or staking. They earn returns on these activities and then share a fraction of the profit as interest with the users.

If a wallet offers higher transaction fees, does it mean it’s more secure or better?

Higher transaction fees don’t necessarily indicate superior security or service. It might be due to various reasons like network congestion. Users should evaluate wallets based on multiple factors, not just fees.

What are the various revenue streams associated with hot wallets?

Online and versatile, hot wallets can profit from transaction fees, interest from lending, staking rewards, exchange services, and affiliate promotions.

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