NFT Staking to Make Money
The year 2021 saw an explosion of interest in the NFT market, with a number of large transactions occurring and innovative uses being created. While there are a lot of people who are becoming more interested in NFTs, there are still many that don’t see the true potential of the NFT market and what it could become in the future.
Simply put, an NFT is a digital representation of an asset. This asset could be digital art, like in the instance of The Merge, which was sold at the end of 2021 for $91.8 million. However, in many cases, these assets are less digital art and more collectibles in the shape of virtual skins, cards, and other items that can be used in a virtual world or simply collected and displayed.
Because each NFT is uniquely located on the blockchain, there is a certain amount of security related to the acquisition and transfer of NFTs that haven’t been available in previous years, making it difficult to pinpoint ownership or verify it in any legal way. Now, however, the NFT market has opened doors for creators to not only create, but to be able to offer their pieces for sale and with a more specific ownership that they can quantify and put a price tag on.
However, it isn’t as simple as just creating art and then having someone purchase it. There are transaction fees, known as gas prices, as well as the price of the piece itself. While they aren’t all priced in the millions, it can cost around $900 on average to purchase an NFT.
This boom in interest in the NFT market has created a surge in prices over the past year and with the emergence of metaverse projects and more play-to-earn gaming platforms, NFTs will seemingly continue to skyrocket. While collecting anything is a hobby of its own, NFT collecting can actually result in some unique opportunities to earn money off of your digital assets.
One such way is to stake your NFTs. This process involves putting your NFTs up for loan in a way. You can allow others to temporarily access or use your NFTs and still retain ownership. Not all NFTs are capable of being staked, but here, we are going to dig a bit deeper into those that can and what that can mean for investors or collectors of NFTs.
Consider companies in the physical world that allow you to rent out tools, equipment, or appliances for a rental fee. The same concept applies to how some NFTs can be staked. This will look different depending on the NFT and the platform that it may be a part of.
While this seems pretty straightforward, staking NFTs is still in its relative infancy. There are new adaptations and advancements occurring each month. And this isn’t just about making back your money or earning a passive income from a digital asset, it is part of a larger digital economy that is ingrained into many of the upcoming metaverse and GameFi platforms that are emerging.
Staking in a metaverse platform might take different forms. Big businesses and brands have already begun creating digital versions of their physical products that can be donned by avatars or displayed in a unique experience that is developed in a metaverse like Decentraland or The Sandbox.
While these virtual economies are decentralized, allowing for a completely self-sufficient economy using tokens as currency and NFTs as assets that can be used, traded, sold, staked, or more. By investing in an NFT and then staking it, not only are NFT owners making passive income from their investments, but they are also taking advantage of the long-term rewards that these metaverse platforms have created to reward players for continuing to participate in the virtual economy by recirculating the tokens received by staking back into the metaverse to purchase new items, develop their plots, and more.
With the concept of the metaverse being an immersive experience that will be the next evolution of what we now see as the internet, the concept of staking gives people the opportunity to be more involved in this experience and feel like they can not only exist and enjoy the metaverse, but also replace part of their real world income as well. Only time will be able to tell how this will continue to develop in the metaverse space, but those that are taking advantage of staking in these early days are already beginning to see the positive effects and profits.
However, the metaverse is not the only emerging space that has use of NFT staking. The gaming industry is in the process of a complete revolution. The days of paying for a skin that millions of people “own” but that can be deleted once the game company decides to remove it are coming to an end. Now, game companies and new developers are all in a rush to integrate NFTs into more unique and rare items that will not only be limited in supply but will also be able to be fully owned by the purchasing gamers.
Take, for example, the days of Magic the Gathering and Pokemon card trading in their hayday. Now, digitize those cards and call each of them an NFT. These are just scratching the surface of how NFTs are being utilized in the gaming community and reinvigorating some of the areas of gaming that have been causing gamers to gripe about in recent years. Now, when gamers invest their money into a game, whether that is buying a new skin for their avatar, unlocking a level, or upgrading their character’s gear to take on harder levels, NFTs allow the gamers to possess these items.
For many gamers, investing hundreds or thousands of dollars is seen as part of the deal. However, NFT staking allows players to earn money back for the things that they have purchased, something that hasn’t been done much up until now. Take Fortnite, for example, whose in-game economy focuses on players paying the company money for items like weapon skins, sprays, emotes, and dance moves. However, anybody can purchase them if they are online at the time they are being sold. This reduces the uniqueness of the items, but it is also a one-way transaction. The player pays the company for the item, and they can use it, unless Epic Games decides they are no longer going to support that item in-game, rendering the player’s money spent as completely worthless.
With NFT staking, the gaming industry can begin to offer products that are different prices based on actual rarity and exclusivity. Plus, the idea of staking can not only help earn some of their money back, but it can also be a great way for gamers to become even more involved and immersed in the platform.
Now, players can offer their items for their friends to use, items can be shared across a party to make it more well-balanced and effective, new areas can be unlocked without having to have purchased the item for the full price, and more. Additionally, those who don’t have those NFTs will benefit from being able to “rent” them and therefore be able to experience more of what the game has to offer, essentially bringing players onto the platform time after time, even if they haven’t spawned, purchased, or found the unique items that are offered.
Plus, with platforms like Axie Infinity, who offer creatures as NFTs, their breeding system allows each Axie to be bred with other Axies either owned by the same player, or throughout the community in order to attempt to create unique offspring with desired traits. While this system doesn’t look the same as the staking mentioned above, it is essentially a similar process where an owner can allow someone else to benefit from their NFT, while also receiving a fee for its use.
So, while NFTs are being seen as a new phase that is a bit difficult to completely comprehend as it is constantly evolving, there are a lot of options for new investors to jump on the staking bandwagon. Platforms like Axie Infinity, Decentraland, and more are just a few options compared to what is coming out in the near future. NFT staking will be an important part of these virtual economies, so it is a great opportunity for both those well-versed in NFTs and those who are still learning about them.