Imagine paying a fair price for a piece of digital art online and receiving a special digital token that verifies your ownership of the purchase. Wouldn’t that be amazing? Well, because of the apparition of NFTs, that possibility is now available. And now, there comes NFT staking to bring in even more advantages.
The world of digital art and collectibles is currently amazed by NFTs. Also, they are currently considered the digital alternative to collectibles, just like many believe Bitcoin to be the digital replacement for cash or gold. As a result of the enormous sales to a new crypto audience, digital artists are witnessing changes in their life.
Also read: Hot NFT Giveaways in 2024
What is an NFT?
For a lot of people, this subject can be tricky and hard to understand, and we understand why. They probably have asked themselves how this thing blew up in popularity and how it works.
To be easier to understand why do people buy NFTs, we had put the puzzle altogether and researched what NFTs have done since they exploded and how you can take advantage of it by knowing the essentials about this new side of crypto passive income.
Fortunately, we made this process easier to understand than it was in the beginning. So, make yourself comfortable, and let us introduce you to this new side of the internet.
What does NFT stand for? Well, it comes from “Non-Fungible-Tokens.” If you know what those words mean, you may already have an idea about their meaning. But let’s say that you don’t know and are curious about checking it out. Without further ado, let’s get into it!
“Non-Fungible” means that it is unique and cannot be replaced with something else, even if it’s from the same category. Let me give you a short example.
Let’s say you have a Bitcoin and want to trade it for another one. The value is going to be the same, both bitcoins have the same value, and eventually, you will end up with the same thing. Do you know why this thing happens? Because Bitcoins are fungible in comparison with NFTs, which are non-fungible.
If you want to do the same thing with an NFT, well, it will not end up the same. This one is like a one-of-a-kind trading card, something with unique features. You can’t duplicate or replace it. By trading an NFT for a new one, you would get something different with a new value. So, it is impossible to trade an NFT for another one and have the same value being exchanged.
Do you get the picture? If you do, we are going to continue explaining.
The term “fungible” or “fungibility” refers to an item’s ability to have replaceable and nearly identical individual parts. The word “fungibility” is not related to the Latin or English noun “fungus” or its plural, “fungi” (which means mushrooms). But instead, it is related to the Latin verb “fungi,” which means “to perform”.
“But what exactly is it?” An NFT represents two things. Firstly, it’s a special digital asset generated and traded using blockchain technology. It can take the form of various things such as drawings, music, avatars, artworks, generative art, collectibles, photos, and video games.
NFT production is known as “minting,” which is comparable to how physical coins are minted (marked) to guarantee their authenticity. A unique token on the blockchain and an electronic certificate of authenticity is created when an NFT is minted.
Secondly, it is evidence of authenticity and property, and you would have proof that it’s not fake.
Almost everything can be turned into an NFT, but an important thing for you to understand is that not every NFT is worth millions of dollars!
Next, let’s see what earning possibilities NFTs bring.
What is NFT Staking and how does it work?
If you’re willing to buy an emerging unique asset, look first in its NFT roadmap if it has any staking capabilities plans.
Why? Well, besides buying and selling for a profit, now you have NFT staking. NFT staking, as the name suggests, is about locking up NFTs on a platform in exchange for staking rewards and other benefits.
By doing this, NFT owners could continue owning their NFTs while earning crypto passive income.
NFT staking gives investors and collectors a new way to make money off their assets, encouraging more people to get involved and increasing the market for stackable NFTs.
The blockchain system secures the money in a staking pool and then picks validators randomly to perform the “mining” or confirmation of transaction blocks. Participants are more likely to be chosen the more they pledge.
Tokens are created and given to validators as staking rewards once a new block is added to the chain.
Note that in general, the number of coins a validator is staking, how long they have been actively staking, how many coins are staked on the network, the token’s inflation rate, and other factors all affect how much a validator earns as a staking reward.
NFT staking works similarly. Therefore, the holders can put their assets to work by staking their tokens and acting as validators.
Earn rewards and passive income with NFT staking
The kind of rewards NFT holders can earn for staking their collection depends on the platform and the kind of NFT staked. A considerable number of NFT staking platforms provide periodic rewards, which are paid out daily or even weekly. You can exchange the staking reward tokens and possibly convert them into other cryptocurrencies or fiat money.
A couple of staking systems feature a Decentralized Autonomous Organization (DAO), meaning that NFT holders can lock up their assets in the DAO pool because they want to participate in the platform’s governance and be able to vote on future proposals.
Yet, most of the NFT market is attributed to in-game NFTs, which makes more accessible the staking opportunities on play-to-earn platforms such as Axie Infinity, The Sandbox, Polychain Monsters, Splinterlands, and others.
Furthermore, in the next part of the article, we will describe some of the best platforms for NFT staking.
Some of the best NFT staking platforms
Splinterlands
This one is a blockchain-based card game created on the Hive blockchain network. It allows players to purchase and sell digital cards with unique NFT identifiers. The game highlights more than 500 cards, which players can collect and use on their own, like in battles.
The game has its native token, SPS – short form for “Splintershards” – and is configured as a DAO on the Binance Smart Chain (BSC). It is possible for users to stake their SPS tokens on players taking part in liquidity pools, ranking battles, and the DAO pool for governance voting.
Binance NFT PowerStation
The best approach to improve your game as a dedicated fan to earn rewards using the supported NFTs on the Binance Fan Token Platform is to use NFT PowerStation, a new Binance Fan Token feature. You can use NFT PowerStation to charge your supported NFTs to amplify your fandom and earn more Binance Fan Tokens for supporting your chosen team.
Rewards in the form of Binance Fan Tokens will be given out from a specified pool of tokens. They will be distributed based on a variety of conditions, including the number of participants, the type of supported NFTs charged, and the amount of Fan Power each charging NFT represents. Your fan rewards will increase as you charge your NFTs for a longer period. Please be aware that awards are determined hourly.
MOBOX
MOBOX is a play-to-earn gaming metaverse that unites DeFi yield farming with NFTs. Made on the Binance Smart Chain, it lets players stake NTFs to receive rewards in its native cryptocurrency, MBOX.
The MOBOX metaverse is also named MOMOverse, and the NFTs are named MOMOs. It is possible for you to mint, obtain or buy MOMOs from the NFT marketplace. Each MOMO has unique characteristics and a hash power that is randomly assigned. If you stake unique MOMOs, you can farm the governance token MBOX. So, the more MOMOs you obtain, the more MBOX benefits you can earn daily.
In case you are wondering, you can use your MOMOs on other MOBOX partner platforms and vice versa. The NFTs from other partnering projects can be used on MOBOX as well.
WhenStaking
WhenStaking is a staking platform for NFTs on Onesssus, which is the DApp development studio that has made NFT play-to-earn games, such as HodlGod and the upcoming NiftyVille.
The NFT assets resulting from these games can be staked on WhenStaking to receive passive income having the form of $VOID, which is the native token for Onessus that manages actual and future projects on the platform.
If you are a fan of popular blockchain games on the WAX blockchain, you are going to be happy to hear that both Onessus and WhenStaking are joined with WAX Cloud Wallet.
Rewards on WhenStaking differ according to NFT rarity, collecting value, and the platform’s exceptional level system rather than simply being a simple APY estimation. Users of WhenStaking can gradually increase their rewards because NFTs level up and increase APY the longer they are staked.
Additionally, stakers can be confident that a wrapped version of the staked token will let them continue using their NFTs as an asset in the game of their choice.
NFTX
The NTFX is a platform where you can create ERC20 tokens that are backed by NFT collectibles.
Users deposit their NFTs into an NFTX vault to earn interest on assets and mint an ERC20 token which is composable and fungible at a 1:1 ratio. This type of token is named vTokens and can be staked for yield rewards or used to buy specific NFTs from a vault.
Holders can combine their vTokens in automated market makers (AMMs) to develop a liquid market for other users to trade. Then, a user can receive trading fees as a liquidity provider. Also, vTokens with liquidity and trading volume get a “floor price,” meaning the lowest market price for an NFT, which is the best for investors trying to price their NFTs.
In conclusion
Buying an NFT to stake may be your best option if you aim to hold for a few years or more. You might try calculating the estimated annual yield with the NFT’s buying price.
Predicting the future of the NFT price movement of the collection itself is challenging; you may decide whether it is a wise investment to purchase, hold, stake, or sell by tracking your purchase price and expected gains.
