For many, the term “non-fungible token” conjures images of art and collectible items that could potentially appreciate over time. In some cases, NFT projects distribute some of their profits back to NFT holders. Secondary market sales and royalty payments are the most common sources of these.
However, as the NFT market expands, developers, artists, and collectors are finding new applications for their NFT holdings. NFTs are being used in staking platforms as utility tokens. Gamers in some metaverses can, for example, stake their NFTs to improve the abilities of their game characters and earn additional rewards.
NFTs have become the most popular trend in the crypto space in recent years. New use cases for NFTs are emerging as the market grows, making them more appealing to collectors. It is now possible for NFT collectors to profit from their collection even if they don’t intend to sell it.
In this article, we will be looking at how NFT staking works and some of the popular platforms.
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What Is NFT Staking?
Locking your NFTs in a smart contract is known as NFT staking. By staking their tokens, NFT owners and collectors can receive rewards and other benefits. Thus, you can make money from your NFTs while still owning them.
Collectors of NFTs do so for a variety of reasons, not the least of which is the intrinsic value of these tokens. You don’t have to sell your assets to make money with NFT staking. Because of this, there is an increase in the demand for NFTs as more investors join NFT staking platforms.
How NFT Staking Works
Like DeFi, NFTs can be staked in exchange for rewards, which is a similar concept. The concepts of DeFi yield farming and crypto staking are far more advanced than those of NFT staking at this point. Different staking protocols have different rules and reward structures, and they all work in different ways.
It is necessary to have NFT tokens in an NFT-compatible crypto wallet before you can engage in NFT staking. There must be a staking contract in place, where the NFTs will be held for a set period. As soon as the staking platform locks the NFTs, you’ll start receiving your rewards. There is a wide range of reward systems available on different platforms.
Most NFT staking opportunities can currently be found on P2E gaming and metaverse platforms like Axie Infinity, Decentraland, The Sandbox, Polychain Monsters, and Splinterlands.
Others use DAO (Decentralized Autonomous Organizations) protocols to protect NFTs for use by stakeholders. If you lock NFTs in DAOs, you can participate in the platform’s governance and vote on future proposals.
There are some NFTs that can be staked like cryptocurrencies, but not all of them can be staked like that. Different staking platforms have different terms and conditions. Verify which NFTs can be staked on your preferred NFT staking platforms by checking twice.
How Profitable Is NFT Staking?
The amount you can earn from locking NFTs on staking platforms depends on a variety of factors, including the annual percentage yield (APY), duration of staking, and the total number of NFTs staked. Additionally, the type of NFT staked and the platform used have an impact. However, the majority of NFT staking platforms payout rewards on a daily or weekly basis.
Based on the rarity of an NFT, staking platforms reward you based on how much you stake. NFTs are rare when your APY is higher. As a result, a company’s ability to consistently generate royalties is critical to its valuation.
Stake rewards will be paid out in the platform’s native token. There are numerous crypto exchanges where these tokens can be traded for fiat money or other cryptocurrencies.
NFT Staking Platforms
While the idea of staking across multiple NFTs is not new, there aren’t many platforms that support it yet. However, if you’re looking for places to put your NFTs, here are some options!
It is possible to deposit a specific NFT collection into a vault with NFTX. tokens, the NFTX-issued ERC20 tokens, are the reward. To be clear, this is a one-to-one exchange. This means that for every NFT staked in the vault, you will receive one token. Finally, tokens are used for rewards, purchases of other vault NFTs, liquidity pools, and decentralized exchanges.
NFTX has recently released the V2 of its app, which is notable. It’s now possible for anyone to create a public vault for any NFT they choose to. NFTX users were previously limited to staking NFTs in existing vaults. The NFTX whitepaper contains comprehensive information on how NFT staking works on NFTX, as well as how to add to the platform’s liquidity pools.
To keep its network safe, KIRA employs a method known as multi-bonded proof-of-stake. In contrast to regular PoS networks, KIRA users can stake any number of cryptocurrencies or NFT assets. The $KEX token can be used to earn rewards for any NFT assets staked by KIRA.
Hive-based blockchain-based card game Splinterlands. Digital cards can be purchased and sold through the use of NFT identifiers. In the game, there are over 500 cards that can be collected and used in battle. This is the game’s primary currency, and it’s called SPS (splinter shards).
The DAO was created using the Binance Smart Chain. There will be rewards and voting rights for those who stake their SPS tokens in the network. Other games can benefit from NFT cards if they are staked in liquidity pools.
4. Band NFTs
Band NFT is the first global music NFT company founded by musicians and fans. You can buy and stake royalty pools for music NFTs to receive a portion of the money generated by music albums through this platform. As the NFT music library grows, so does the royalty income stream for NFT investors.
5. Polychain Monsters
Polychain Monsters is a cross-chain digital collectible and gaming ecosystem. Animated cross-chain NFTs with various characteristics and varying degrees of scarcity can be created on this platform. These NFTs are also known as polymers.
Digital booster packs contain them. In return for staking these NFTs, the owners of Polychain Monsters’ cryptocurrency PMON receive weekly rewards.
The NFT staking concept is getting a lot of attention these days, despite its youth. Choose the best NFT staking platform and start earning rewards right away.