For the past two years, NFTs have been the most popular trend in the crypto sector. NFTs, in addition to allowing ownership of digital treasures, present new use cases for collectors as the market grows. Collectors can now profit from NFTs by staking them rather than selling them.
Staking NFTs is a sub-trend of NFTs that is gaining a lot of momentum among investors right now. Let’s take a look at what staking an NFT is, how it works, and the most popular NFT staking platforms in this article.
What Is NFT Staking
In the crypto realm, NFT staking is a new approach to making money passively. It allows holders of NFTs to lock their assets in DeFi platforms in order to get rewards without having to sell their NFT collections.
NFT staking can benefit investors on a personal basis because the overall supply tends to be smaller. However, in a broader sense, NFT staking gives NFTs additional applications that go beyond just collecting digital art.
How Does NFT Staking Work
While NFT staking is still in its infancy in comparison to other DeFi yield farming techniques, it functions similarly. You can earn rewards based on the annual percentage yield (APY), the staking length, and the number of NFTs staked by locking up NFTs on a platform.
Investors and collectors love HODL and speculate on NFTs because of their unique nature. Staking NFTs provides users with a new way to monetize their assets, which could entice more people to join and increase market demand for stakable NFTs.
Staking an NFT is similar to staking bitcoin (BTC) or ether (ETH) (ETH). You’ll only need a bitcoin wallet that supports NFTs. Not every NFT, however, can be staked for prizes. Because the criteria for different projects varied, it’s best to double-check with your selected projects before purchasing NFTs.
What Are The NFT Staking Platforms
Along with NFT marketplaces, NFT Staking Platforms are in high demand, and they serve as the cornerstone for many NFT-based businesses. In a short period of time, NFT staking platform will transform into a very good market.
Let’s take a look at NFT staking and the top five NFT staking platforms.
Users can create ERC20 tokens that are backed by NFT collectibles using the NFTX platform. Users deposit NFTs into an NFTX vault, which creates a 1:1 composable and fungible ERC20 token. These vTokens, on the other hand, can be used to buy NFTs from a vault or staked for yield rewards.
Holders of vTokens can similarly pool their holdings in automated market makers (AMMs) to create a liquid market where other users can trade. vTokens with liquidity and trading volume also receive a “floor price,” or the lowest market price for an NFT, which is ideal for investors trying to price their NFTs.
Splinterlands is a collectible card game based on the blockchain, similar to Hearthstone, in which players collect and use cards with a variety of abilities and characteristics. The game’s native coin, SPS (short for “Splintershards”), is set up as a DAO on the Binance Smart Chain (BSC). Users can gamble on players in ranked bouts, liquidity pools, and the DAO governance voting pool with their SPS tokens.
On the Solana Blockchain, Doge Capital is a group of 5000-pixel art NFTs. They can be purchased in any Solana marketplace. Doge Capital, however, offers a staking program that pays NFT holders with DAWG tokens on a daily basis. A few exchanges, including Dexlab and Raydium, provide Doge Capital’s native utility token, DAWG.
Polychain Monsters is a blockchain-based platform for animated collectible NFTs called Polymon, which may be obtained through digital booster packs. Polymons have a wide range of traits and are of varying rarity. Some pairs are extremely rare and in high demand.
Polymon holders can also stake their NFTs on a weekly basis to gain PMON, the Polychain Monsters’ native cryptocurrency.
In the music industry, NFTs mark the beginning of a new era in which producers have entire control over distribution. BAND- Royalty is in charge of this movement. It is, however, an NFT market where users may purchase music NFTs and stake them in royalty pools in order to receive a piece of the revenue earned by their songs or albums. The platform’s music library will grow in size as the royalty income stream for NFT investors improves.
How much can you make from NFT staking?
The amount of reward you can obtain when you stake NFTs on a staking platform is determined by a variety of parameters, including the annual percentage yield (APY), the staking period, and the number of NFTs staked. It also depends on the platform you’re using and the type of NFT you’re investing in. The majority of NFT staking platforms offer daily or weekly incentives.
When you begin staking an NFT, the staking platform assesses its value based on its rarity and assigns an appropriate APY. The higher your APY, the rarer your NFT is. The ability to generate a steady revenue through royalties is another essential consideration in establishing the value of an NFT. The platform’s native coin will be used to pay out staking incentives. On exchanges, you can exchange these tokens for other cryptocurrencies or fiat money.
What happens when you stake an NFT?
Staking NFTs allows owners to profit from their collection while keeping control of it.
How does staking an NFT make money?
You use a platform or protocol to connect your nonfungible tokens. You will earn staking rewards in exchange for this action. You can earn more income while still owning the NFT in this manner.
How does an NFT actually work?
NFTs are essentially digital versions of tangible collector’s artifacts. As a result, rather than receiving an actual oil painting to put on the wall, the customer receives a digital file. Additionally, they are granted exclusive ownership rights.
Where can I stake NFT?
There are a lot of NFT staking platforms listed above including poychain monsters, doge capital etc.
The concept of NFT staking is still in its infancy. Liquidity is a problem for NFTs, which is unsurprising given the ecosystem’s infancy and the fact that the vast majority of NFTs are bought with the goal of hoarding as long-term investments. Nonetheless, the buzz surrounding NFTs has piqued the interest of newcomers to the cryptocurrency sector who want to learn more about NFT platforms and earn incentives.
Despite the fact that NFT staking is not as popular as bitcoin staking, it has a lot of potential in the near future, especially if Eth2 is successfully changed to a PoS system, with staking replacing mining.
Staking NFTs, on the other hand, has a solid foundation and has produced great results. The fact that you don’t have to sell or transfer ownership of your NFT collection is perhaps the most significant benefit of NFT staking. You must, however, deposit your funds in a staking pool and wait for the results.