NFT Staking: Invest in NFTs for Passive Income - Coindoo

NFT Staking: Invest in NFTs for Passive Income

Editorial Team Avatar
Oct 27, 2021
3 min reading time

123SWAP is a platform designed to minimize slippage and offer transparent, convenient exchanges, earning, and investment management solutions, all without any intermediatory. 123SWAP offers a variety of DeFi solutions and the one known as NFT staking; we will be discussing in this article is all about staking NFT to generate passive income.

What Are NFTs?

The abbreviation NFT stands for Non-Fungible Tokens, which are digital (cryptographic) representations of tangible and intangible goods. Assets can range from homeownership to tangible artwork, digital art, and even in-game products like skins. In other words, NFTs enable you to tokenize real-world assets and claim ownership of them via the blockchain.

How Can You Profit from NFTs?

It stands to reason that if an asset has both distinctive and desirable traits, it has the potential to be monetized. Assets in a cryptographic digital format can be rented or leased to third parties through specialized marketplaces, generating a consistent income stream.

Liquidity is a massive difficulty for NFTs at this time, mainly due to the ecosystem’s underdevelopment. Furthermore, most NFTs are purchased to retain them for a long time until their value rises sufficiently. In contrast, others are purchased solely to be burned/destroyed to enhance their scarcity. Liquidity in NFTs is necessarily limited as a result of these actions. So, how do we get past this liquidity problem?

How Does NFT Staking Work?

NFTs, as previously said, are tokenized assets. NFTs could be moved to a platform that takes care of their safekeeping and governance, just like any tokenized asset. You can stake tokens in a value-creating crypto project, but why not stake tokens in an asset with the potential to generate an income stream?

You might wonder why a platform would want to do that. Although the possibility of fee generation is frequently regarded as a positive motivation, it is also possible that an NFT might add distinctive value to a platform.

Once the NFT or tokenized asset has been moved to the staking platform,’ the asset’s governance can be assigned to determine the tokenomics. The tokens might be staked, and the delegators could obtain block and fee rewards once an annualized yield (APR) is created.

Various considerations, including the asset’s ability to produce an income stream such as royalties, would affect the level of staking rewards. Perhaps thinking about the concept of ‘tokenised patents,’ which can generate an income stream and possibly even form part of the staking incentive, can help you visualize this. Crypto investors looking for the most acceptable staking crypto payouts can earn an APR of up to 100%. (sometimes much more).

The premise is that staking will help attract crypto investors and increase much-needed NFT liquidity, hence speeding up the development of the NFT ecosystem.

The notion of NFT staking is still in its early stages, but there has already been considerable experimenting. We’ll keep a close eye on this place and update this page if anything changes – so stay tuned!

In the future, 123SWAP, with the wide range of offerings related to DeFi, will reshape our lives for the future full of ease and enjoy seamless cryptocurrency exchange; moreover, the cross-chain value exchange mechanism allows platform users to trade directly with one another across any chain on a peer-to-peer basis.

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* The information in this article and the links provided are for general information purposes only and should not constitute any financial or investment advice. We advise you to do your own research or consult a professional before making financial decisions. Please acknowledge that we are not responsible for any loss caused by any information present on this website.
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