NFT staking is the latest approach to building a stable passive revenue stream in the Crypto world. The NFT holders can lock in the assets on decentralized platforms to receive awards. The passive income earning can be achieved without even selling the NFT asset collections.
NFT staking is somewhat similar to decentralized finance (Defi) yield farming. The rewarding mechanism in the staking process depends on the Proof of Stake (PoS) mechanism. As users tend to lock in NFT assets, they can get various rewards according to the total number of assets and annual interest rates.
NFT staking also remains available at an individual level and can benefit the investors as well. In a broader spectrum, NFT staking brings new use cases to NFTs with the expanded approach of digital assets and benefits.
NFT Staking - What Should We Know?
NFT, also known as non-fungible tokens, is the digital representation of digital collectibles with growth potential. These digital collectibles can be art pieces that tend to experience a boost in value with passing time. Some of the NFT projects allow sharing of revenues with the NFT community members. The revenues are mainly derived from the secondary sales markets.
However, the NFT growth motivates the various developers, collectors, and artists to explore new opportunities with NFT collectibles. NFT collectors are allowed to stake the NFT into various platforms to boost their potential and earn extra rewards.
How Does NFT Staking Work?
Going with the name, NFT staking is all about locking the NFT on a platform to get staking rewards and additional privileges. It offers the NFT holders an additional revenue stream as a passive income source. All these benefits can be achieved while having ownership of the NFT sources.
NFT staking is still in the blurred mode when it comes to yielding exclusive opportunities and benefits. All you need to do is lock in the NFT to gain the additional interest rate on an annual basis. The interest rate is also dependent on staking duration and the number of staking NFT assets too.
The unique nature of NFT along with investors and collectors can lead to the HODL and speculations. This NFT staking brings exclusive opportunities for asset monetization and development. It can potentially lure more users to involve and drive the market demand for NFT that can be staked with passing time.
Staking an NFT is purely like staking Bitcoin or Ethereum and the process involves the Cryptocurrency wallet with NFT. But, not every NFT can be staked to earn revenue and rewards. However, the project requirements keep varying and that brings the need to check the projects before accepting the NFT.
Where Can You Stake NFTs?
There are plenty of NFT staking opportunities with modern-day practices and examples. You can even find the majority of the owners bringing out their own NFT staking platforms for better usage and appeal.
What Are NFT staking rewards?
Various sorts of staking rewards are distributed to the NFT holders after deploying the NFT on the platform. These are also dependable for NFT categories. The majority of the NFT staking platforms come with the rewards in a fixed time interval as well. These can be released on a daily, weekly, and monthly basis as well. The rewards are commonly paid as the utility token of the platform. However, there are certain exceptions as well. The token applicable for staking rewards can be easily traded and converted into fiat money or alternate Cryptocurrencies.
Along with that, there are other NFT staking platforms having decentralized autonomous organizations (DAOs). It helps in locking assets in the DAO pool (or NFT staking pool) while indulging in the governance tasks on the platform. Variable as per the DAOs, the miners can vote rights while proposals are made. There is also a possibility to create their own proposals if required.
A large segment of NFT relied on the majority of the Blockchain-based games. It brings plenty of skating opportunities in P2E games (Play-to-earn games). There can be a variety of options when it comes to choosing Blockchain-based games. Thus the earning and investment of NFT become highly facile.
NFT staking is the source of getting the passive income from the idle NFT collectibles. The participants can create new cases and opportunities for NFT that were left untouched and explored before. However, it will be quite early to decide that NFT staking will bring the exclusive range of opportunities and favorable areas in Blockchain technology.