Assets like collectibles and art do not generate revenue until they are not sold. And NFTs are also like art and collectibles. But if you want to generate regular or passive income then you should go with NFT staking. In this article, we will discuss NFT staking and factors that play a vital role in staking.
Due to NFT staking, the demand for NFT development services is increasing and people are showing more interest in it. Such a platform is fruitful for both users and owners and both their making money from it. You can also become a part of such kinds of services by introducing your own NFT staking platform with the help of an NFT token development company.
Before proceeding in, let’s know about NFT staking and its benefits.
What is NFT Staking?
When you deposit a cryptocurrency in a blockchain network and receive rewards for not selling it until it is staked. There are various staking platforms where you can stake your NFTs to make money in the form of rewards, and you have no need to sell your NFTs. It is just similar to making a deposit in a bank account, where you earn interest on your deposit money. In NFT staking, you deposit NFTs instead of depositing cash, and you will be compensated for staking your NFTs.
How Does it Work?
NFT staking is a new concept to make money and how it works depends on the particular market.
The basic process is:
A smart contract in a liquidity pool is used for staking NFTs, but before this, NFT is sent to a Defi platform.
Rewards depend upon the platform’s protocol system, and rewards may be in the form of tokens and another NFT.
Benefits of NFT Staking
Here are the most common benefits for you if you make use of NFT staking.
Users can use their NFTs to make passive income and can gain extra rewards in the form of tokens and NFTs.
It helps you to drive the scarcity and value of NFTs.
It enables platforms to boost their overall liquidity.
The platform can wider traction and grow communities in an easy way.
These benefits are the key reasons behind the popularity and demand for NFT development services.
Factors to Count Before Staking Your NFTs
When you are going to buy NFT, then make sure it can be staked or not. Because all NFTs are not for staking. There are different platforms and each platform has its own guidelines. So, always have a look at them.
Lockup period: It totally depends upon the staking platform whether they have a locked-up period or not. The lock-up period can vary from days to years.
Annualized percentage yield (APY) is the expected return that is gained by NFT staking. Some platforms have high and some have low APY. But always be careful and before staking your NFTs know the sustainability of the platform. Each platform has a different method to calculate APY. price and the rarity of the NFT can play a major role in the APY.
Some platforms offer you rewards in their native cryptocurrency tokens that can have utilities such as voting power on that platform.
The volatility of cryptocurrencies plays a significant role in the value of NFTs and the reward received from the staking platform. Because NFTs are denominated in cryptocurrencies and rewards you get also come in the form of NFTs.
Top NFT Staking Platforms
Here are the popular NFT staking platforms where you can easily stake your NFTs.
Binance NFT PowerStation
How to Earn Passive Income Staking NFTs?
If you have NFTs, then you can use them to make passive income. Blockchain technology has made it possible to generate passive income by staking your NFTs. For such a source of income, first, you have to make an investment. This has become a popular way to make money and for this, you need NFTs in your crypto-wallet. The popularity of staking NFTs is increasing day by day. Here, you will get rewards in the form of NFTs and other mediums. Therefore, it is very important to do proper research on the NFL’s staking platform, the utility, and the staking rewards.
What Are the Best NFTs to Stake?
When you are going to stage your NFTs, then it is very important to have an idea of what your target is and what you want to achieve. To find out the best NFTs for staking, you will need to know where you can get the best opportunities. So, always do deep market research. You will get a lot of NFTs that can be chosen by you, but choosing the right one is a tedious task. Always check their characteristics before investing in them. Always be clear in your strategy.
If you have an interest in games and want to invest in this industry, then you can choose a game platform like Splinterlands which is a play-to-earn game built on the Ethereum blockchain where players can earn extra through NFT staking. Always keep in mind that the value of NFT may decrease in value. So, a risk is always there in staking your non-fungible tokens.
This article clears all your doubts regarding NFT staking and how you make money by using NFT staking. NFT staking has become very prominent within a short time period and it has become a perfect way to make passive income because here, you have to invest only one time, and you will get APY. As its demand is increasing, then you can also introduce your own NFT staking platform with the help of an NFT token development company.