NFT staking is a great way to make money with high returns instead of holding NFTs till their value rises.
In recent years, NFTs have been the most popular trend in the crypto sphere. In addition to providing ownership of digital collectibles, NFTs offer collectors new use cases as the market expands. Collectors can now profit from their NFTs even if they don’t intend to sell them by putting them up for stake.
A sub-trend of NFTs, NFT staking is gaining in popularity among investors. NFT staking, how it works, and the most popular platforms for NFT staking are all covered in this article.
What Is NFT Staking?
NFT staking is the locking of your NFTs in smart contracts. NFT owners and collectors can earn rewards and other benefits by staking their tokens. As a result, you can profit from your NFTs while maintaining ownership of them.
NFT collectors buy, hold, and speculate on the value of NFTs because of their inherent nature. NFT staking, on the other hand, allows you to monetize your assets without having to sell them. As a result, the demand for NFTs increases as more investors join NFT staking platforms.
How Does NFT Staking Work?
A global network of validators verifies transactions and keeps the network secure in most blockchain networks today using a Proof-of-Stake (PoS) consensus mechanism. A staking reward is exchanged for verifying a transaction and staking cryptocurrency.
It is similarly possible to earn fees for dedicating one of your NFTs to a blockchain network by using a platform that allows you to stake your NFTs there.
NFT staking is similar to DeFi staking, which allows cryptocurrencies to be staked in exchange for rewards. DeFi yield farming and crypto staking concepts are much more advanced than NFT staking. Different staking protocols have their own rules and reward structures, and they all work differently.
Some protocols require that NFT holders vote on proposals, while others pay rewards for simply locking up the NFTs on their platforms
NFT staking requires that you first hold NFT tokens in a crypto wallet that is compatible with NFT staking. The NFTs must then be sent to a staking contract and locked for a specified period. Your rewards start rolling in once the staking platform locks the NFTs. When it comes to the reward system, it varies greatly from platform to platform.
Other staking platforms use DAO (Decentralized Autonomous Organization) protocols to secure NFTs for stakeholder use. You can participate in the platform’s governance and cast a vote on future proposals if you lock NFTs in DAOs.
Staking NFTs isn’t that different from staking cryptocurrencies, in that regard Some NFTs can be staked like cryptocurrencies, but not all of them can. The terms and conditions of various staking platforms vary. It’s a good idea to double-check which NFTs can be staked on the NFT staking platforms you prefer.
How Profitable Is NFT Staking?
Because the annual percentage yield (APY), duration of staking, and the total number of NFTs staked all affect how much you can earn from locking NFTs on staking platforms, there is no one set amount you can earn. The type of NFT staked and the platform you use also play a role. Most NFT staking platforms, on the other hand, award rewards on a daily or weekly basis.
With an NFT, the staking platform determines how valuable it is based on how rare it is and then rewards you accordingly. The higher your APY, the rarer your NFT. Additionally, a company’s ability to generate a steady stream of royalties is a significant factor in determining its value.
The platform’s native token will be used to pay out stake rewards. These tokens can be exchanged for fiat money or other cryptocurrencies on exchanges.
NFT Staking Platforms
NFT staking is still a relatively new concept, so there aren’t many platforms that allow you to stake across multiple NFTs. Then again, if you’re looking to stake your NFTs, here are some platforms to check out!
It is possible to deposit a specific NFT collection into a vault with NFTX. tokens, the NFTX-issued ERC20 tokens, are the reward. To be clear, this is a one-to-one exchange. This means that for every NFT staked in the vault, you will receive one token. Finally, tokens are used for rewards, purchases of other vault NFTs, liquidity pools, and decentralized exchanges.
NFTX has recently released the V2 of its app, which is notable. It’s now possible for anyone to create a public vault for any NFT they choose to. NFTX users were previously limited to staking NFTs in existing vaults. The NFTX whitepaper contains comprehensive information on how NFT staking works on NFTX, as well as how to add to the platform’s liquidity pools.
KIRA is a blockchain that uses multi-bonded-proof-of-stake to secure its network. Users of KIRA can stake any number of cryptocurrencies or NFT assets, unlike regular PoS networks. Any NFT assets staked by KIRA will be rewarded with the $KEX token, which can then be used to earn rewards.
Splinterlands is a Hive-based blockchain-based collectible card game. Using NFT identifiers, players can buy and sell digital cards. Over 500 cards are available in the game for players to collect and use in battle. SPS serves as the game’s native token (splinter shards).
Binance Smart Chain was used to set it up as a DAO. Those who stake their SPS tokens will be rewarded and have a say in the running of the network. NFT cards can also be staked in liquidity pools so that other games can benefit from them.
Band Royalty NFTs
Founded by musicians and fans, Band NFT is the first global music NFT company. Using this platform, music NFTs can be purchased and staked in royalty pools to receive a portion of the revenue generated by music albums. The royalty income stream for NFT investors grows in size as the music library expands.
Polychain Monsters is a digital collectible and gaming ecosystem that works across chains. This is a platform for animated cross-chain NFTs with different traits and different levels of scarcity. Polymers are another name for these NFTs.
You can get them from digital booster packs. The people who own these NFTs can stake them and get weekly rewards in the form of PMON, which is Polychain Monsters’ cryptocurrency.
Despite its infancy, the NFT staking concept is receiving a lot of attention these days. Make sure you pick the best NFT staking platform and begin earning rewards today.