Nft Staking-Best nft staking platforms: Before staking any token or nft, you should should first check if is going to be profitable or not.
So you may want to ask if Nft Staking is profitable? Nft Staking is a profitable means of earning passive income from nfts in cryptocurrency. But the question is how can one stake an Nft to make profit and what does Staking an Nft mean!
If you are looking for a sure way to earn passive income through Nft, Nft staking could be a good solution to that and I believe you wouldn’t want to miss out on it.
There’s so much global demand for NFTs right now. The Nft market is holding up quite well right now. In the first 30 days of the year 2022, we had to look up $3 billion for the trading volume of nfts.
Making profit is not just the goal but making passive income or profit where you don’t really have to do much and get your money flowing in.
In today’s post, I’ll guide you through all there is to Nft staking and how profitable Nft staking can be.
- What is Nft Staking
- how to stake nft,
- NFT staking Platforms,
- Where can I stake my NFT
- how to make profit or passive income from Nft staking.
- Nft market size
What is Nft Staking?
Nft staking has to do with nft owners locking up their non fungible tokens for a particular period of time which could be limited or indefinite, in a bid to earn passive income and benefits from them.
Nft staking allows stakers to derive benefits in the form of cryptocurrencies and tokens while retaining their ownership over the assets locked. They are able to earn a percentage from the Platforms or websites wherein these tokens are locked.
If the name Nft sounds new to you; here’s a brief intro to what it connotes.
Brief intro into Nft
Non fungible tokens refers to NFTs and they are undoubtedly the most exciting part of cryptocurrency. NFTs are unique cryptographic assets that represent the ownership of a tangible or non tangible asset and are a store of value.
NFT has gained popularity not just because it’s the first of its kind to provide provable digital asset ownership, but also because it can generate good returns in the form of profits and benefits as well as access.
Building an NFT portfolio filled with many unique items pixelated, animated, zombie related or even human related does come with a really good feeling of fun and excitement, but it can also come with juicy passive income.
Today, we will explore the basic ways to make passive income or profits using NFTs. This means, there is no timing the market, no anxiously watching the floor prices nor any of the other things that one has to keep a constant eye on when trying to make money through trading nfts.
Staking in nft (How to stake Nft)
Blockchains depend heavily on their global network of transaction validators who authenticate transactions before the data gets added to a block on a blockchain.
These validators or miners are decided based on the amount of cryptocurrency they pledged toward the operation of the blockchain network.
In return, miners earn rewards in the form of the native cryptocurrency for devoting resources. This model of pledging crypto assets is called the Proof Of Stake model and the process is called Staking.
Similarly, you can pledge nfts to support a project while you earn passive income in the form of reward and fees for dedicating the asset to a Blockchain.
Currently, most of the Nft Staking projects opportunities are in the Play-To-Earn Platforms such as the Decentraland, Sandbox, Axie infinity and a lot more. All you need to stake is a cryptocurrency wallet with Nfts.
Over 50% of the Nft market is attributable to in-game nfts which players can buy using cryptocurrencies.
Axie infinity for instance has gone over the sales value of $2billion and more since its launch in 2018.
Nfts have also been instrumental in the growth and development of virtual lands and as a result enabled ownership of lands in the virtual space.
The economic potential for virtual lands is very significant, as it allows investors to build up a solid and secure business for advertising or online sales in the digital space.
Moreso, 2021 saw some people make a lot of money buying and selling nfts. As a matter of fact, the number of high ticket sales in the past year has no doubt driven the surge of interest in the NFT market. But with that growth comes new ways to earn without simply trading in the market.
NFT Staking: How to earn profit (Passive income) Staking nfts
There are a number of NFT projects which exist with different means for owners to earn passive income. The main way they do this is by giving owners project tokens for staking or simply holding the Nfts. These project tokens can then be used within the project for things like minting nfts or in-game features for Nft games. Thus, this utility gives these tokens values.
NFT Staking: Is Staking Nft Risky?
Buying an Nft that promises passive income through tokens can be quite risky. Some projects promise tokens and never deliver, others deliver tokens that are worthless.
Just like other Crypto related projects, research is very important to find out if tokens have value or not. There are different methods or ways to earn passive income on nfts.
However, all the different methods fall largely under the umbrella of Yield farming.
What is Nft Yield Farming
Nft Yield Farming refers to the use of different protocols of Decentralized Finance (DeFi) to get the best possible yield or gain from an nft without selling it.
It can be likened to a regular bank account where you deposit money into it; effectively loaning that money to the bank and in return you are paid an interest yield from the bank. The yield depends on how much you deposit in the bank account and the annual percentage interest the bank offers.
At the basic level yield farming works similarly to this kind of loaning, when you put an nft in a platform, you earn interest on it until you pull the asset out.
Although, it can get more complex with the way you do it. Different yield farming techniques are interconnected and can be done with one
Different Staking methods in yield farming
There are different ways of yield farming involving nfts. The first one is through
Renting: This is probably the simplest one to understand. You rent out your NFT for someone to use for a given amount of time and you’ll make money from the rental fee they pay you. While it may be incredibly simple, there are limited use cases for this in the early days of NFT.
Sure, if you have a high value NFT then you may be able to rent it to an art gallery. This is an instance. Although, this might not be the best option for the average NFT owner, at least right now.
Moreso, you can make money through NFT staking. Earlier we mentioned staking NFTs to make profit and most importantly, passive income through Project tokens.
Staking a token basically means that you lock up that token taking it out of circulation. This token can be a cryptocurrency or an NFT.
Passive income by this method comes through staking rewards. When you stake crypto, this is usually a fraction of the token that you stake. When you stake nfts, the rewards come via some other token.
Disadvantage and advantage of NFT Staking
The downside of stacking a token is that you can’t use it for a period of time. The upside is the annual percentage rates are generally way higher than what you would get from any bank savings account.
So even though you can’t sell your NFT until that stinking period is over, you’re getting a relatively high return on it.
In the meanwhile, some projects actually allow owners to stake their nfts with the project itself in return for Project tokens.
Indeed, staking is a very popular trend in NFT games with play to earn mechanics.
Read also; Revealed: Top Nft Rarity Tools To Rank Your Nfts
Nft Staking Websites/Platforms
There are also a few platforms that handle NFT staking. Some platforms will allow you to stake certain NFTs that you own.
They’re the ones who decide how much your NFT is worth and thus the annual percentage rate that you will learn by staking it.
It’s even possible to mint or buy tokens representing NFTs that other people have staked; users can also mint NFTs by providing liquidity.
How is this done? Allow me to explain.
Decentralized exchanges are platforms that allow users to trade different kinds of cryptocurrencies.
In order to do this. They need people to provide the funds that are liquidity that will be used in currency trades.
The way decentralized exchanges get these funds is through liquidity pools. When users stick their tokens in a pool, they become liquidity providers and receive an NFT called an LP token.
The LP token represents how much the owner staked.
Liquidity providers will need to stake two different kinds of tokens to join the pool.
The passive income benefit for liquidity providers comes from the transaction fees that the decentralized exchanges received from people trading tokens.
To clarify, anytime someone trades on a decentralized exchange, they must pay a transaction fee, then some or all of that transaction fee goes back to the liquidity providers.
The amount you get back depends on how much you put in compared to how much is in the total pool.
So with the NFT version, an NFT owner would simply stake both in NFT and some cryptocurrency like ETH or song depending on the NFT and platform, and instead of a liquidity pool for exchanging currency, this might be a pool for buying and selling fractionalized NFTs.
Best nft staking platforms-TOP
There are many different platforms that you can stake your nfts. Here is a few of them;
- Doge capital
- Polychain monster etc.
These are the different places or Platforms where you can stake your nfts.
Is Nft Staking Profitable
So in summary, NFTs have proven to be a profitable form of investment owing to a number of reasons.
First, they create a medium whereby physical objects like artworks can be tokenized, thus eliminating the duplication of such artwork and limiting ownership to the artist. This in turn creates scarcity for the artwork and hence value for it.
Secondly, it provides investors with more liquidity tokenizing assets and gives investors more liquidity over their assets when they need it.
An example is when a virtual landowner decides to rent out their virtual space to advertisers or influencers for a fee while still retaining ownership over the land. The virtual land in this case still belongs to the owner but part of it is liquefied as rent.
Lastly, as its potential growth and development, NFT possesses the potential for growth and development of the land sector. Pegging NFTs to land pieces has proven great potential for growth and development.
For instance, in real estate, owning and controlling virtual lands gives you the power to decide what you want to do on your land.
You can decide to rent it out, build up a solid and secure business for advertising or online sales with other use cases in gaming and collectibles.
NfTs have proven to be a unique and profitable tool for investment. The world is going digital in terms of authenticity, control and ownership of assets of which nfts are a major force to reckon with.
Nfts continue to disrupt the crypto markets as organizations infuse funds into their development.
Although in its nascent stage NFT staking is catching the fancy of investors who may get lured by high annual percentage yields.
It is always advisable to read up and understand the fundamentals of cryptocurrencies and blockchains before investing in nfts before staking them.
The Nft Staking market
The NFT market was projected to reach $17.7 billion. By the end of 2021, that’s to say that NFTs are here for real, and interest in them is not going away.
As more and more people learn about NFTs, there will be more opportunities to make passive income from them, not only in the ways we’ve explored in this post, but also in ways that will come into play in the near future.
If you intend to stake your Nft or have staked your Nft, do well to share with me the platform you used or wish to and the best so far.
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