NFT Staking Guide— A Door to Your Passive Income
Cryptocurrency staking is not new in the market. Users stake their cryptocurrencies, adding rewards to their wallets. In simple terms, staking follows the same roadmap of saving deposits. However, in this case, you will deposit your cryptocurrencies instead.
When talking about NFTs, staking is a considerably new development and requires more exploration. Even though it is in its infancy, this development is helping users have a constant stream of passive income. Staking of NFTs depends on the Proof of Stake (PoF) mechanism to reward the user. This means that the more NFTs the participant has staked for a longer period, the more the return reward.
For instance, picture this. You bought an NFT, and now it’s sitting idle in your digital wallet, giving you no benefits. By staking this NFT on an NFT staking platform, you can earn returns on your investments.
Let us get a bit deeper into staking NFTs.
What is NFT staking?
NFT staking is similar to saving deposits. Unlike traditional savings, here, you deposit your NFTs and earn revenue in return. As the name suggests, staking NFTs means locking your NFTs in NFT staking platforms and generating passive income. You might be thinking, do we lose ownership? Rest assured! Even though you are staking your NFTs, you will not lose your ownership over them. The rewards received will be based on the annual interest rate, the number of NFTs staked, and, lastly, the staking duration.
NFTs are unique. Therefore, investors and collectors tend to move carefully with the trading. This new way has opened doors in the NFT marketplace enabling users to monetize their assets. Thus, attracting massive attention to NFT staking.
Staking NFTs works exactly like staking cryptocurrencies in the market. However, we need to keep in mind that all NFTs cannot be staked. Staking of NFTs can vary with the projects.
How does staking work?
As mentioned earlier, Non-fungible tokens (NFTs) are unique assets. Thus, the owners are usually reluctant to sell it in the marketplace. Another thing is that an NFT depends on the demand rate in the market, which makes it vulnerable to price fluctuations. In this case, the introduction of NFT staking may bring ease to the users.
They can now choose to stake their NFT and earn passively. To stake your NFT, you will require a crypto wallet where your NFTs and tokens get stored. The next step would be to ensure that your wallet fits the blockchain your NFT platform to invest is built on. Every platform uses a different blockchain; therefore, ensuring the wallet’s and blockchain’s compatibility is a must. Lastly, you will have to connect your wallet to the NFT staking platform.
What is NFT staking rewards?
NFT rewards can vary depending on the platform and type of NFTs we are staking. Most of the platforms support periodic staking rewards, which can range from daily to weekly. The rewards earned are often in the form of tokens that are default on the platform. The player can trade the staking rewards and potentially convert them to real-life currency.
Popular NFT platforms for staking
Staking, being a relatively new idea in NFTs, is largely used in NFT gaming platforms. Play-to-earn gaming provides opportunities to stake your in-game NFTs, returning a much more satisfying reward.
Built on the BNB Smart chain, this is a play-to-earn game involving the Metaverse. Players staking their NFTs on this platform earn rewards in its native token, MBOX. The MOBOX metaverse, MOMOverse, has NFTs called MOMOs that are minted, bought, sold, or traded on the NFT platform.
Each MOMO carries unique qualities and also different hash power. Hash power is used by your hardware to run and solve different hashing algorithms. The hashing algorithms help generate new cryptocurrencies and allow transactions between them. The process is also called Mining. Staking the MOMOs can help you collect the in-game currency, MBOX. The more you stake, the more MBOX you earn. You can then convert these MBOX to real-life currency.
The Zookeeper is a Gamified yield farming DApp. Yield farming is a process to multiply your rewards that involve the staking of cryptocurrencies. Zookeeper provides users with the opportunity to stake in liquidity pools, which in turn, allow dual farming. This means that you can earn the utility token, ZOO, along with the WanSwap Liquidity Provider (WASP) token as a reward.
You can also choose to lock your tokens for a set time to increase your rewards. Staking NFT cards called ZooBoosters, which can be obtained by staking ZOO tokens, can also increase rewards.
Coming to the best NFTs to stake
That being said, deciding to stake an NFT requires an understanding of the expected result. Therefore, thorough research is a must. NFTs are of different types, and you cannot stake all of them in the NFT market.
Like gaming NFTs and having the urge to invest? Splinterlands is one popular NFT platform to invest in. The game is built on the Ethereum Blockchain and allows players to earn passively through staking.
NFT staking is quite a new concept introduced in play-to-earn gaming that requires in-depth exploration. Nevertheless, this advancement still attracts new players to the platform. You don’t wish to play or take part in the trading? NFT staking is a great method to generate passive income. NFT staking is growing widely. And why not? It gives players an opportunity to bet on their NFTs without losing ownership. The NFT market is coming up, and if you want to invest in it, this may be the right time.