Explore These 4 NFT Money-Making Strategies
NFTs (non-fungible tokens) have zero real-world value in their basic form, but that doesn’t mean they can’t be leveraged to bring in some income. You may have to sacrifice access to your NFT for a while in some cases, but that’s a small price to pay for increasing revenue. Below, you will find four NFT money-making strategies.
Despite the market crash, some lines of NFTs are still in high demand and can be used to earn passive income. For example, if you hold rare trading card game NFTs, smart contracts can be used to set up a rental agreement between two parties. Additionally, the lending platform, reNFT, allows users to set rates and lending periods.
Decentralized finance (Defi) and NFTs are intrinsically linked, which makes staking NFTs a possibility. Staking means that if you’ve got an NFT sitting around in your NFT wallet serving no real purpose, it can be locked away to generate yield (income). The platform you choose will depend on the rules – some of them accept NFTs from any chain and others require native NFTs to be bought.
NFT creators receive funds when they make an initial sale. However, smart contract tech allows creators to input royalty rulings, meaning they receive revenue every time the NFT is sold on the open market. Typically, creators set royalty parameters during the minting process. Additionally, once a royalty is set, there is no work needed by creators to enforce payments, as smart contracts take care of everything. Essentially, the NFT sale can’t be made until the royalty has been paid.
On the topic of NFT integration with Defi networks, you can provide liquidity (cash assets) and receive NFTs for free in return. For example, Uniswap liquidity providers receive an ERC-721 token, which contains details of locked-up assets. As these tokens are just NFTs, you can sell them on the open market to improve your liquidity, which is a win for the wider blockchain community.
AMMs (automated market makers) are rapidly being integrated with NFTs, which means users can set up yield farms using NFT products. This process involves utilizing numerous Defi infrastructures to generate a high yield – and you only need to use assets you already own.
Circling back to Uniswap, the ERC-721 tokens can be staked to earn extra yields. The best way to picture yield farming is in layers. You take one yield and stake that and earn additional yield over the top. This layered structure is a great way to earn passive income through NFTs. NFTs may be worthless on their own, but they can be leveraged to earn passive incomes. However, you should keep in mind that NFTs are still in the teething stages, meaning the strategies outlined above are brand new and haven’t come to full fruition yet. Therefore, before you commit to anything, make sure you carry out further research and understand all risks involved – the crypto market is highly volatile.