NFT Staking 101

In crypto space, we often hear about “staking”, and how “staking” can generate lots of passive income, and sometimes generate more than actually mining ETH. Similar to cryptocurrency staking, NFT staking is another way to earn passive income by generating rewards.

Table of Contents
1. What is NFT staking?
2. Why stake NFTs?
3. How does NFT staking work?
4. NFTWORLD
5. Creepz Genesis
6. To Sum it all up

Part 1. What is NFT staking?

Let us take a step back to understand what NFTs are, NFTs are tokenized assets that allow you to buy and sell digital assets as well as real-world assets such as real estate on decentralized infrastructure. Using NFTs, asset holders acquire a sole proprietorship of an asset. Unlike fiat currencies and alternative tokens such as cryptocurrencies, the two NFTs are not the same and cannot be duplicated.

NFT staking allows users to earn rewards as a passive way of earning money without having to sell or transfer ownership of the NFT. Stakers are rewarded for holding or locking NFTs on the platform. This protects the network and rewards NFT token holders in return for providing security.

The reward depends on the NFT bet or the locked total value (TVL), the bet period, and the APY or annual interest rate. Stakeholders can enjoy the benefits without losing ownership.

Part 2. Why stake NFTs?

One of the biggest issues with NFTs is liquidity. That said, selling NFTs is not always easy due to their irreplaceable nature. Much of the value of NFTs is largely subjective and well worth the willingness to pay for a particular person. On the other hand, cryptocurrencies are easier to trade because they have market-defined values compared to fiat and other cryptocurrencies.

The solution provided by NFT staking is to allow owners to profit from NFTs without having to find a buyer directly. In this way, staking solves the NFT’s liquidity problem.

Part 3. How does NFT staking work?

Staking an NFT is like staking Ethereum or any other tokens. All you need is a cryptocurrency wallet with NFTs. However, not all NFTs are rewarded by staking. Requirements vary from item to item, so it’s a good idea to review your favorite items before buying an NFT.

Part 4. NFTWORLD

NFT World is a fully decentralized, fully customizable, community-driven gaming platform that allows world owners to create their own Infinite Metaverse games and experiences for players and exclusive communities around the world. Currently with a floor price of 11 ETH and 35.2k ETH total volume traded (2022/03/03). And like a lot of NFT nowadays it comes with a Staking mechanism.

By Staking NFTWORLD NFT, $WRLD tokens are generated regularly for staking only. World owners can claim $WRLD tokens from their staking wallet at any time. What’s unique about NFTWORLDS NFT is that they have the option to set up to rent the NFT you staked. World owners can set a monthly fee and a minimum/maximum month to rent, therefore even more passive income!

Part 5. Creepz Genesis

Creepz Genesis is a collection of 11,111 reptiles in the heart of the Creepz universe. Creepz uses the staking mechanism to earn the in-game currency $ LOOMI which later on can be used for other Creepz NFTs, events, and experiences. Currently with a floor price of 2.3 ETH and 24.1k ETH total volume traded (2022/03/03).

$LOOMI is the currency of the creep economy. By staking your creep, they earn a fixed amount of $LOOMI per day based on their rarity. You can then use it to create future drops for the Creepz Universe or sell them in the secondary market. What makes their staking mechanism interesting is that to prevent people from cashing out their $LOOMI, a 25% withdrawal penalty is applied.

Part 6. To Sum it all up

NFT staking allows participants to earn additional income from idle NFT collections. At the same time, the NFT staking mechanism is the perfect way for NFT holders to experience novelty and high profitability. Staking can be used not only by NFT collectors but also in the Play-to-Earn gaming industry and other areas powered by blockchain technology.

However, one thing it needs to do is establish an audience and cater to that. For now, it’s hard to say who benefits from staking and locking an NFT. Mosts NFT owners haven’t found a reason to stake their NFT because it can be more profitable by selling their NFT rather than staking and generating passive income. Therefore without enough incentives, the whole staking and locking NFT idea can be just an idea.

Disclaimer:

This article is for educational purposes only. We have no relationship to these projects, and there is no endorsement for these projects. The information provided through Oasis DAO does not constitute advice or recommendation of investment or trading. Oasis DAO does not take responsibility for any of your investment decisions. Please seek professional advice before taking financial risks.

A little self introduction about myself, the name is Joe and I write about Cryptocurrency & NFT Related content. Feel free to swingby our discord to say hi, don’t worry we won’t bite! Also make sure to follow our medium and turn on the notification button.

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Sources:
https://learn.bybit.com/defi/what-is-nft-staking/
https://blog.liquid.com/nft-staking
https://docs.nftworlds.com/nft-worlds-usdwrld-token/staking-and-rent-for-nft-world-holders
https://momentranks.com/blog/a-guide-to-creepz-nfts-and-loomi-token