Thought that creating and selling NFT is the only way to make million bucks? Think again!
If you have landed on this page, you are probably well aware that NFT market can mint you money like nothing else in today’s world. From celebrities to investors, even the billion and trillion dollar companies are jumping onto the NFT bandwagon, thanks to the advent of blockchain technology and metaverse. However, making you own NFT and selling it for big profits can all sound very overwhelming because of two reasons- skills and monetary investment.
What if we tell you that creating and selling is not the only way to make money from NFT. There are plenty of ways in which non-fungible tokens can earn you a handsome passive income.
Yes creating an NFT, especially on Ethereum blockchain, can burn a hole in your pocket. The gas fee can shoot to the north of $90 and there is still no guarantee if your NFT will sell. This is the reason why most of the creators make profit by offloading their NFTs on secondary marketplaces.
If you are a complete novice to the concept of NFT and what exactly it is, check out our most comprehensive guide to NFT.
Enough said, let’s jump straight to the list-
How To Make Money With NFT- 4 Savvy Ways To Generate Passive Income
You might have guessed from the name, NFT staking is a type of DeFi yield farming technique in which the owner locks up their NFT on a platform or protocol. In return, the holder recieves staking rewards that can be a pretty good passive income while still retaining the ownership of the NFT.
The annual percentage yield (APY) is decided by the staking platform depending on the rarity of your NFT. There are many staking platforms trusted by the creators to earn lucrative passive income on their NFT, the most famous being Onessus, Only1, MOBOX and Zookeeper.
The reward on staking your NFT is in the form of the native cryptocurrency. Currently, most of the market share in the staking segment is occupied by the in-game NFTs.
Royalties on NFT
This is another very effective method to keep earning a passive income on your NFT without any extra efforts. When you create and sell your NFT, it is a one time income where you also loose the right over your digital asset. However, royalties are different.
This technology allows the owner of the NFT to set terms through smart contracts that charge a certain royalty fee whenever the buyer of NFT sells it further in a secondary market. The earning here is a defined percentage of the selling price of the NFT and is applicable indefinitely.
If you want to earn royalties, you need to set the terms while minting your NFT.
If you think your NFT is in high demand and is rare, you might want to rent it out instead of selling it. This makes up for a good passive income over long run. This technique is widely popular in card trading games where players often borrow NFT cards to increase their odds of winning. In return, the borrower pays a certain rent to the owner of the NFT.
The terms of renting out NFT is again governed through smart contracts so one need not to indulge in manual paper work.
ReNFT is your best choice if you are looking for a platform to rent out your NFT or want to rent one.
Layered income-generating yield farming
We are back at the yield farming but this time, we are talking about NFT-powered yield farming that can give you a layered income-generating model. This one is a bit more complicated than others on the list but if done successfully, you will thank yourself for going down this road.
The world of NFTs and blockchain have multiple DeFi protocols that aim at eliminating the setbacks of traditional financial sector. Yield farming is a method by which one can bring together multiple DeFi protocols to create the highest utility and yield offered by the digital asset.
It can be summed up as earning in layers as one digital asset can behave in multiple ways- liquidity tokens, collateral or can be staked, for example.