Nov 17, 2022
Read 2 min.
In our previous article, we already learned what crypto staking is. Staking NFTs works in a similar way, and can generate passive income for their owners. Let’s find out more.
How to stake NFTs
To stake an NFT means to put a unique token to work on the blockchain — on a platform or protocol. In exchange for this action, the user receives staking rewards while remaining the owner of the NFT.
To start earning passive income, choose a wallet compatible with the blockchain you want to stake on. Then, you need to send the NFTs to a staking contract and lock them for a certain period. Once the staking platform locks the NFTs, you start earning rewards.
Staking platforms and rewards
The popularity of NFTs has given rise to a number of platforms that offer staking. Each of them has a different specificity and tokenomics. Let’s have a look at some.
Binance NFT PowerStation — designed for staking and earning Binance Fan Tokens by supporting sports teams.
Onessus — a play-to-earn system that rewards users with a token called VOID. Those tokens are needed for earning on NFT staking.
Only1 — an NFT-powered social media platform built on the Solana network. It will suit creators who want to monetize their crypto art.
The reward system changes from one platform to another and depends on various factors, such as annual percentage yield (APY), staking duration, and the number of NFTs staked.
How to earn passive income
Put briefly, you will get passive income when your staked NFTs will pass the lock-up period and start working for the blockchain.
As a rule, staking platforms automatically evaluate the worth of NFTs and provide a suitable APY. What makes an NFT valuable is its uniqueness: the rarer the NFT, the higher the reward will be.
Staking rewards are usually paid in the platform’s native token. These tokens can later be exchanged for other cryptocurrencies or fiat. Most of the NFT staking platforms offer daily or weekly rewards.
Best NFTs for staking
In theory, any NFT can be staked to generate good income. All you need is to choose a platform that specializes on your type of assets: gaming NFTs, digital arts or utilities. Otherwise, the NFTs could not be evaluated properly.
Remember that NFTs, just like cryptocurrencies, are volatile. It means that they may lose part of their value over time, and this can impact your APY. So, the best NFTs for staking are probably those with a good rating and public support.
NFT staking is a relatively new way of earning on crypto, safer and less stressful than traditional trading on the exchange. The main advantage is that users continue to be holders of their assets, and can withdraw them at any time.
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