How to Make Passive Income with NFTs?

The world of cryptocurrencies has witnessed an exciting evolution with the emergence of non-fungible tokens (NFTs). These unique digital assets have captured the attention of artists, collectors, and investors worldwide, offering a new avenue for creativity, ownership, and investment.

What are NFTs?

NFTs, or non-fungible tokens, are digital assets that represent ownership or proof of authenticity of a unique item or piece of content. Unlike cryptocurrencies such as Bitcoin or Ethereum, which are fungible and can be exchanged on a one-to-one basis, NFTs are indivisible and hold distinct characteristics that set them apart. Each NFT possesses a specific value and cannot be replicated or replaced, making it a one-of-a-kind digital asset.

NFTs encompass a diverse range of digital assets, each catering to different interests and industries. Art NFTs have gained significant traction, allowing artists to showcase and sell their creations directly to collectors. Beyond art, NFTs have extended into the realm of collectibles, granting ownership of unique digital items such as trading cards, virtual pets, and virtual fashion. Additionally, NFTs have expanded into virtual real estate, enabling users to buy, sell, and trade virtual land and properties within virtual worlds or metaverses.

The process of buying and selling NFTs typically occurs through specialized online marketplaces. These platforms provide a venue for creators to mint and list their NFTs for sale, while buyers can browse, bid, and purchase the desired digital assets. Transactions are recorded on blockchain networks, ensuring transparency, authenticity, and ownership verification. Cryptocurrencies, particularly Ethereum, are commonly used as the primary means of exchange for NFT purchases.

Over the past couple of years, NFTs have surged in popularity, captivating the imagination of creators and enthusiasts alike. The ability to tokenize and trade digital art, collectibles, virtual real estate, and more have revolutionized how we perceive ownership and value in the digital realm. The explosive growth of NFT marketplaces and the increasing number of high-profile sales have further fueled the widespread adoption and fascination with NFTs.

How to Make Passive Income with NFTs?

While NFTs have gained prominence for their ability to represent unique digital assets, they also offer exciting opportunities to generate passive income. Whether you’re an artist looking to monetize your creations, a collector seeking to capitalize on your NFT portfolio, or an investor exploring new avenues for financial growth, the market evolved in a way to make it possible to earn passive income even with NFTs.

NFT Royalties

When an NFT is created, the creator can specify a royalty percentage that they will receive on subsequent sales of that NFT. This means that even after the initial sale, creators can continue to earn income every time their NFT is resold on the secondary market.

The process of earning passive income through NFT royalties starts with creating and minting digital assets. Creators, such as artists or collectors, create their artwork or collectibles and convert them into NFTs on compatible platforms. During this process, creators have the option to set a royalty percentage.

Once the NFT is minted, it can be listed for sale on NFT marketplaces, where collectors or investors can purchase it. The initial sale generates revenue for the creator, but subsequent sales contribute to passive income. When a collector decides to sell the NFT to another party on the secondary market, the creator is entitled to a percentage of the sale price as specified in the royalty percentage. This royalty is automatically transferred to the creator’s wallet upon transaction completion.

The beauty of earning passive income through NFT royalties lies in the continuous flow of revenue. As the NFT changes hands and is resold multiple times, the creator receives a royalty on each subsequent sale. This creates a sustainable passive income stream, as the creator benefits from the appreciation and demand for their NFT over time.

NFT royalties have transformed the digital art and collectibles space by providing ongoing financial support and recognition for creators. It allows them to focus on their craft while simultaneously generating passive income from the increasing value and demand for their digital assets.

NFT Staking

Staking NFTs presents a unique opportunity for individuals to generate passive income by leveraging their NFT holdings. This method involves locking up or staking NFTs in specific protocols or platforms, which, in return, rewards participants with additional tokens or other incentives. By staking their NFTs, holders can earn a passive income stream while still retaining ownership of their digital assets.

To begin earning passive income through staking NFTs, the first step is to select the NFTs that will be staked carefully. These can include various types of digital assets such as art, collectibles, or virtual real estate. Once the desired NFTs have been chosen, the next step is identifying a suitable staking platform or protocol supporting NFT staking. These platforms typically provide detailed information about the rewards and benefits associated with staking.

After selecting the platform, participants need to deposit and lock their chosen NFTs into the staking platform. This involves transferring ownership or custody of the NFTs to the platform for the duration of the staking period. The length of the staking period may vary depending on the specific platform or protocol.

Once the NFTs have been successfully staked, participants can receive staking rewards. These rewards are typically provided as additional tokens, including the platform’s native token or other fungible tokens. Participants should monitor the staking activity and keep track of the accumulation of rewards over time. Depending on the platform, rewards may be distributed periodically or at the end of the staking period. Participants can claim their earned rewards through the platform’s interface.

NFT Farming

NFT farming is a method that enables individuals to earn a passive income within the NFT ecosystem. By participating in specialized DeFi protocols, individuals can stake or provide liquidity using their NFTs. In return, they receive additional tokens or NFTs as rewards. NFT farming allows for passive income generation while contributing to the growth of the NFT space.

Individuals must select their desired NFTs and find suitable DeFi platforms offering NFT farming capabilities to start. Participants become eligible for farming rewards after staking or depositing the NFTs, which can be additional tokens or NFTs. These rewards are distributed based on factors like liquidity provided, farming duration, and stake in the contract.

NFT farming not only offers a way to earn passive income but also allows participants to contribute liquidity and support the growth of the NFT ecosystem. By providing liquidity or staking NFTs, individuals help enhance the overall market dynamics, create opportunities for trading and investment, and foster a vibrant and sustainable NFT community.

NFT Rental

NFT owners must first identify potential renters who are keen on utilizing their NFTs. Various channels, including NFT marketplaces, social media platforms, and specialized rental platforms, can help connect owners with prospective renters seeking to engage with these digital assets.

After a renter is found, both parties must establish the rental agreement’s terms. These terms typically encompass the duration of the rental period, the agreed-upon rental fee, and any specific conditions or restrictions regarding NFT usage. Crafting a comprehensive rental agreement is crucial to protect the rights and interests of the NFT owner and the renter.

With the rental agreement in place, the NFT owner transfers temporary ownership or usage rights of the NFT to the renter for the specified period. The renter gains the ability to utilize the NFT in diverse ways, such as showcasing it in virtual environments, incorporating it as an in-game asset, or displaying it in digital galleries. Throughout the rental period, the NFT owner accrues rental fees as per the agreed terms.

Upon completion of the rental period, the NFT ownership or usage rights are reverted to the NFT owner. At this point, the owner can either renew the rental agreement with the same renter or seek new opportunities to continue generating passive income from their NFT.

NFT Royalties: Main Platforms

Gate NFT

Source: Gate NFT

Gate NFT is a native feature of the Gate.io platform. With a focus on empowering creators and artists, Gate NFT offers a unique ecosystem where creators can mint, sell, and monetize their digital creations by issuing NFTs.

On Gate NFT, artists can secure a stream of income from the resale of their NFTs through royalties. When a collector purchases an artist’s NFT and later resells it on the platform, a percentage of the sale proceeds is automatically paid back to the artist as a royalty. This creates a sustainable model for artists to continue benefiting from the success of their creations over time, fostering long-term collaborations and rewarding creativity.

The royalty feature on Gate NFT allows artists to monetize their work and incentivizes collectors to support their favorite creators.

reNFT

Source: reNFT

ReNFT is a platform that embraces the concept of royalties within the NFT space. With a mission to empower artists and creators, ReNFT provides a unique ecosystem where artists can mint and sell their NFTs while retaining ongoing royalty rights. Through ReNFT’s royalty feature, artists can earn a percentage of the resale value each time their NFT is sold on the platform, ensuring they continue to benefit from the success and value appreciation of their digital creations.

By integrating royalty mechanisms into the NFT ecosystem, ReNFT creates a sustainable model that rewards artists for their creativity and innovation. This feature not only supports artists financially but also encourages the growth of a vibrant and diverse NFT marketplace.

(1) NFT Royalties: reNFT, UnitBox DAO, IQ Protocol, Vera, and Trava NFT.

NFT Staking: Main Platforms

NFTX

The NFTX platform allows users to create and trade index funds composed of various NFT assets, offering a streamlined approach to diversification within the NFT market. By pooling together NFTs with similar characteristics or themes, NFTX enables the creation of index tokens representing fractional ownership in these curated collections.

NFTX offers users the opportunity to enhance their returns by utilizing the NFTX Yield feature, which enables staking of NFTs to earn additional rewards. By staking their NFT assets, users contribute to the platform’s liquidity pools and receive governance tokens as yield. This incentivizes active participation in the NFTX ecosystem while allowing users to benefit from potential growth and value appreciation of the underlying NFTs.

Band Royalty

Source: BAND Royalty

Band Royalty is an innovative platform that aims to revolutionize the music industry by merging it with the world of non-fungible tokens (NFTs). The platform allows music enthusiasts and investors to purchase and own unique music-related NFTs that represent fractional ownership in the rights to specific songs from popular artists. These NFTs entitle the holders to royalty streams generated by the corresponding songs, providing a new way for fans to engage with their favorite music while potentially earning passive income.

By staking their Band Royalty NFTs, users can actively participate in the platform’s ecosystem and unlock additional rewards. Staking involves locking up NFTs for a specific period, contributing to the liquidity and stability of the platform. Through NFT staking on Band Royalty, users can earn passive income in the form of royalty distributions.

NFT Farming: Main Platforms

MOBOX

Source: MOBOX

MOBOX is a platform that combines the worlds of NFT gaming and collectibles, providing users with engaging and interactive experiences. The platform offers diverse NFT-based games and collectible items that users can explore and enjoy. With MOBOX, users can discover and collect unique digital assets, including characters, items, and accessories, which can be utilized in various gaming environments.

MOBOX allows players to stake their NFTs and earn rewards in its native cryptocurrency, MBOX. This feature allows users to lock up their NFT assets for a specified period, contributing to the platform’s ecosystem and earning incentives through MBOX tokens. By embracing the staking functionality, users can showcase their NFT collections and generate passive income through the rewards distributed by MOBOX.

MOBOX’s NFT farming feature allows users to participate in yield farming by staking their NFT assets. By providing liquidity to designated pools or protocols, users can earn additional rewards through tokens or acquire more NFTs.

Bunicorn.Finance

Source: Bunicorn.Finance

Bunicorn.Finance is a platform that combines decentralized finance (DeFi) with NFTs, allowing users to participate in NFT yield farming. The platform enables users to stake their NFT assets and earn rewards through yield farming strategies. By leveraging their NFT ownership, users can contribute liquidity to designated pools or protocols and receive additional tokens or NFTs as rewards.

With the NFT yield farming function, users can actively engage in the platform’s ecosystem while earning passive income. The integration of NFTs into yield farming introduces a unique opportunity for users to generate enhanced earnings and contribute to the liquidity of the platform. Bunicorn.Finance utilizes smart contracts to ensure transparency and security throughout the yield farming process, providing users with a trustworthy environment for their NFT-related activities.

NFT Rental: Main Platforms

NFTFi

Source: NFTfi

NFTfi is a platform that allows NFT owners to use their digital assets as collateral for loans and earn passive income through lending. NFTfi facilitates secure and transparent lending processes through smart contracts, enabling NFT owners to access liquidity without selling their valuable NFTs.

Through NFTfi, lenders can lend stablecoins or cryptocurrencies to borrowers, earning passive income in return. The platform also introduces fractionalized NFT lending, maximizing the potential income from NFT assets. NFTfi’s decentralized approach connects borrowers and lenders directly, offering a user-friendly interface for seamless lending experiences.

Drops

Source: Drops

Drops is an innovative platform within the NFT space that offers exciting opportunities for collectors and enthusiasts. The platform acts as a marketplace for curated NFT collections, where users can discover and participate in exclusive drops of digital assets. Drops collaborates with renowned artists, creators, and brands to release limited-edition NFT collections, creating a sense of exclusivity and scarcity.

Users can acquire unique NFTs that hold artistic or collectible value. These digital assets include artwork, virtual goods, music, and more. By participating in drops, users gain access to highly sought-after NFTs that may not be available through traditional channels.

The platform’s user-friendly interface and intuitive features streamline the purchasing process, making it accessible to both experienced collectors and newcomers to the NFT scene. Drops provides a curated and engaging environment for users to explore and acquire NFTs that resonate with their interests and preferences. Focusing on limited-edition collections, Drops offers a dynamic and exciting space for NFT enthusiasts to discover and acquire coveted digital assets.

Conclusion

Platforms like reNFT, NFTX, Gate NFT, and Band Royalty offer innovative solutions that empower creators, artists, and collectors to monetize their digital assets and participate in the NFT ecosystem. Whether earning royalties from the resale of NFTs, staking NFTs to unlock additional rewards, or farming NFTs for yield, each method provides a unique way to capitalize on the growing market and potential value appreciation of digital collectibles.

As the NFT space continues to evolve, it is clear that passive income generation with NFTs is not just a trend but a viable avenue for individuals to explore. Whether you are an artist, collector, or investor, leveraging the power of NFTs can open up new possibilities and create avenues for financial growth in the digital realm.