One of the most interesting and probably confusing parts of the non-fungible token industry is NFT staking. This is one of the less discussed methods of making money with NFTs. But, that does not make it any less effective! Especially when you take into consideration that staking, in itself, is a crypto term. Not exclusively reserved for NFTs. So, it is pretty legit!
Therefore, we’re going to cover everything you need to know before you actually start staking yourself. But, to begin with, you should know that this method includes making money without selling your NFT! In other words, a way to make passive income with non-fungible tokens and crypto assets. However, this is definitely not a feat for beginners. So, if you ARE a beginner, you need to read up on our NFT for Beginners guide to get up to speed. Click on the button below to check it out!
NFT STAKING GUIDE
What is NFT Staking?
NFT staking is a method for making money with NFTs by basically “locking” your NFT in smart contracts. This allows you to put your NFTs to work on a particular blockchain and receive benefits in return. The holders of the non-fungible token lock their NFTs in specific staking platforms and earn rewards or privileges. Therefore, the holder earns passive income throughout the entire staking period while still having ownership of the NFT.
So, even if you “stake” your non-fungible token, you will still be the owner of this token! You can think of it like a time-deposit bank account. This is where you deposit a certain amount of money and earn interest on that amount. In terms of non-fungible tokens, you will be depositing an NFT and earning rewards for that – minus the actual bank.
Remember, decentralized blockchain means no middleman! The type of rewards that you can get all depends on the protocol that you go for.
NFT staking rewards could include things like:
– Participate in governance tasks on the platform
– The blockchain’s native coin
– Non-fungible tokens
Reasons for staking non-fungible tokens:
– Increases the appeal of staking platforms
– Monetize your NFTs without selling them
– Support Proof-of-Stake (PoS) networks
– Increases the demand for NFTs
– Earn passive income
– Drive up the scarcity
How does NFT Staking Work?
The thing about NFT staking is that it all depends on the blockchain networks and the protocol you go for. Most blockchains use the Proof-of-Stake mechanism that uses validators – aka the people staking tokens – to secure the network. Or, you can also choose platforms to earn rewards in exchange for staking with them.
But, unlike cryptocurrency, you can not stake all types of NFTs!
In a nutshell, it all depends on the staking platform’s terms and conditions. You should also check the platform before you buy an NFT to make sure you can stake it. Once you’ve picked a platform, you can start with the staking using the following steps:
– Hold your NFT in a compatible NFT wallet
– Connect your wallet to the staking platform
– Send the NFT to a staking contract
– Choose a certain locking period
– Start earning rewards!