Wait a minute. First off, what is NFT staking?
What is NFT staking
Staking NFTs (non-fungible tokens) on a platform or protocol means holding them for a specified period of time to earn staking incentives and other perks. Staking NFTs allows collectors to make money while keeping their ownership and not losing them.
Very loosely put, NFT staking is like earning interest on your money against fixed deposits in a bank.
NFTs’ peculiarity makes them perfect for wait-and-HODL methods, however, such long-term investments can take time. Buying and selling NFTs can be resource-intensive, necessitating hefty transaction fees, especially on Ethereum. Also, whether or not an NFT will appreciate in value over time is unknown.
Staking is a method used by cryptocurrencies and tokens that employ the proof-of-stake (PoS) protocol to confirm transactions. Staking crypto tokens, like NFTs, entails storing them for a period of time in exchange for staking benefits.
How NFT staking makes you money
Liquidity is a major concern with NFTs. Selling NFTs isn’t always straightforward owing to their non-fungibility. An NFT is worth whatever a particular individual is prepared to pay for it. However, fungible tokens like cryptocurrencies are easier to trade since their market value is determined relative to both fiat and other cryptocurrencies.
NFT staking allows holders to gain from their NFTs without having to sell them directly. Staking, therefore, overcomes the liquidity issue with NFTs.
To “mine” or confirm blocks of transactions, the blockchain protocol places cash in a staking pool and selects validators at random. The more a person pledges, the better their chances.
Coins are created for each new block added to the chain and delivered to validators as stake rewards. These include the quantity of coins staked, the length of time the validator has been actively staking, the number of coins staked on the network, and the token inflation rate.
Coin holders can earn passive income by staking their coins and becoming validators. The cryptocurrency protocol is also secured and user transactions are confirmed. Everyone wins. Users that stake their coins retain ownership of their assets and can remove them from the staking pool at any time.
Best websites for NFT staking
If you wanna try your hand at NFT staking, here are some of the best websites to try.
You may earn extra money from your idle NFT collections by staking them. It has given NFTs new applications that they never had before. While the idea is new, it may lead to more NFT staking opportunities. If you want to establish your own NFT collection, see our list of the greatest NFT marketplaces here.
Get started with as little as $10.