“If you are an artist and still don’t use NFT (Non-Fungible Token), you are potentially missing millions of dollars.” -Olawale Daniel
In this digital era, who’s not well aware of the term NFTs and NFT staking? Let’s revise once again here to further drive your mind towards the point of its exclusive grandeur.
So, the NFTs, as we already know, are the immutable tokens using Blockchain infrastructure for digitally storing all the visuals; written and audio work. Anything existing in the digital form can be NFT, including tweets. Jack Dorsey’s first tweet was sold as NFT for $ 2.9 million which was then converted into Bitcoin and donated to the charity.
Let’s now come to the concept of NFT staking that intends to earn even more.
NFT staking, as the name shows, refers to the locking up of NFTs on a platform to receive staking rewards and allows NFT holders to earn a passive income where the ownership of NFTs remains to the owner.
The staking rewards depend on the annual percentage yield (APY), the duration of staking period, and the number of NFTs staked.
The main component of the process is a cryptocurrency wallet where your NFTs will be stored. Other than that, it’s quite simple. NFT staking is just like staking crypto coins such as BTC or ETH.
NFTs are sealed in a smart contract usually ERC-721. The mechanism inside the smart contract then helps the token to interact with other tokens of the same blockchain.
The NFTs earned from the online games also work in the same way that when you stake them, the contract starts working and manages the earnings.
Another smart contract performing the function, in the same way, is ERC-1155. It proves to be best when you have to wholesale your NFTs and requires to move them as fast as possible.
To raise the profit and earn more income the best idea is to keep some of the items out of circulation that are already rare and less available. The best blockchain is Ethereum but if your NFT doesn’t belong to it, you can stake it for validation rights also.
Mostly, the users are now shifting their cryptocurrencies towards the Proof of stake system where they stake a portion of their coins to validate transactions on a blockchain and earn rewards. When you stake more, the higher are the chances to acquire the right to validate that transaction.
It’s now as clear as crystal that NFT staking allows participants to make extra revenue from their less used NFT collections.
Moreover, it is also helpful in creating new use cases for NFTs that were not looked into before. Users can lock up their NFTs on specific platforms for receiving rewards on the basis of established annual percentage yield (APY) and the number of NFTs staked.