The Pandemic has made us all desperate to work from home and earn to survive. With this calamity, many of us got interested in different online marketplaces and passive income streams. With the recent surge in the demand for NFTs in 2021, creators or NFT buyers had the advantage to earn from selling or creating NFTs.
The high demand for NFTs convinced many to start earning from the NFT niche. With many people making millions out of their NFT collection and adding more fortune to their pockets, it is visible that NFTs are making a lot of money. But the question is how? and this article is all about decoding how NFTs make money. We have listed down some of the strategies by which NFTs can make you money.
1. Through Renting
One of the ways by which NFTs are valuable or make money for their owners is through the renting process. People are allowed to rent NFTs that have a high value in the market. This can be applied to some of the rare NFTs that people like and they can be from any genre. For instance, anime, memes, GIFs, or videos.
Nowadays some card trading games also allow players to borrow NFTs cards to elevate their rankings in the game. The renting tenure is determined by a peer-to-peer smart contract. Users have the freedom to set their preferred duration for renting or lease.
2. Royalties
By far the most captivating thing about NFTs is that it offers royalties to the creators and empower them. Creators can set up their desired royalty fees whenever their NFTs are resale or purchased by different people.
The privilege is that they can have a certain amount of share on what they created. The percentage depends on what the creator settled for people in the first place if the ratio was 5% then the royalties will also be 5% of the total sale. The best option to earn more in this is to fix a price which you would like to be a part of your long-term earning.
3. Staking
NFT and DeFi’s collaboration has resulted in staking NFTs for earning possibilities. Staking involves a process of depositing or “sealing” digital assets into smart contracts to generate a profit. This strategy works fine when using native tokens to earn rewards on NFT marketplaces however, multiple NFT platforms support all varieties of NFTs.
The more the stakeholders the more the reward will be distributed and this only helps the native token holders. And the settlement of the reward is also done under the protocols of a smart contract.
4. Providing Liquidity
With NFTs, it is now possible to provide liquidity and receive NFTs in return. Users utilize this strategy to establish a firm position in any liquidity pool they are investing in. there is an advantage of selling NFTs to liquidate your position when there are multiple stakeholders in a liquidity pool.
NFTs offer complete security without losing your assets and investment you can easily liquidate your position.
5. Adopt NFT-Powered Yield farming
NFTs are now rapidly becoming a core component of AMMs, users are now having the advantage to farm for yields utilizing NFT-powered products. The term Yield farming refers to a specific method of leveraging multiple Defi protocols to generate the highest possible yield with the digital assets one has.
However, NFTs and the smart contract technology are still relatively new and users should consult a trustable platform before heading to start their farming. It is always best to do some research to know about the best methods so that you don’t end up wasting time, money, and effort.
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