Over the past few years, Non-Fungible Tokens (NFTs) have taken over the crypto space so much that almost everyone wants to participate. However, when discussions about NFTs spring up, many people prefer profitability over NFT’s importance in digital representation.
NFTs are an important part of today’s advancement in digital representation. It provides an immutable Proof of ownership over any item, from artwork to gaming items, music, videos, etc.
The NFT market is undoubtedly one of the most booming spaces in crypto and blockchain. However, despite being an important investment asset, many creators and developers continue to explore unique use cases and applications for their NFT projects.
One of the newest and most important use cases for NFT assets is staking. It works like staking a fungible token, where you lock up your asset for some time to earn yield rewards.
If you’re looking to unlock additional passive earning opportunities with your NFTs, staking is a recommended option. Fortunately, this guide will take you through everything you need to know about staking NFT and how much you can earn from staking your asset.
What Does NFT Staking Means?
NFT Staking simply means locking your NFT asset in a staking platform for some time to earn money and other rewards. Staking NFT allows NFT holders and owners to earn rewards while retaining ownership of their assets.
NFT has proven to be an important part of identity and identity management. As mentioned earlier, they are unique cryptographic assets and can be used to prove ownership and authenticity of any physical or digital asset.
NFTs have also been useful in gaming and play to earn projects. However, staking NFT is nothing but a truly exciting new use case for NFTs that allows for holding and long-term investment in NFT trading.
Staking allows stakers to eat their cake and have it. This way, they can earn incentives while having their NFT regardless of whether their NFT appreciates over time or not. Staking also paves a new way for monetizing NFT assets passively.
Ways to Stake your NFT
NFT Staking is still a newer use case for NFT. In fact, the whole NFT ecosystem is still in its nascent stage. Since many people love to buy and hold NFTs without trading them, liquidity is still an issue in NFT Staking.
Still, the fuzz and huge adoption of NFT have made it a point of interest for new and existing investors in the crypto space. Meanwhile, everyone is looking for a blue chip project to earn life-changing rewards with.
NFT Staking has shown huge potential, especially with the migration of the Ethereum blockchain to ETH2.0. The Proof of Stake consensus mechanism of this new network supports staking instead of mining, a new dawn for fungible and non-fungible token staking.
Meanwhile, in NFT Staking, participants still retain access to their assets. This way, they can earn money while owning their assets at the same time. Even though NFT Staking is not as popular as regular staking, it has enormous potential in the near future.
Some NFT platforms provide NFT staking opportunities for their users. However, the most popular ones are NFT games. With these games, users can stake gaming assets in in-game staking pools.
Apart from these, NFT platforms that provide staking opportunities include NFTx and Only1 App.
1. Staking NFT on NFTx.io
NFTx is a liquidity protocol that provides liquidity for non-liquid NFT assets. It allows users to trade, swap, and lock their NFTs. NFTx’s main important feature is that it allows you to hold a share of high-value blue chip NFTs without actually buying the NFT.
With NFTx, users can buy a fraction of an NFT in the form of special ERC20 tokens. Therefore, if users cannot afford to buy high floor price projects like Bored Ape or Azuki, they can buy ERC20 tokens representing the NFT’s floor price. Therefore, the token also increases in value when the floor price increases.
NFT holders can also benefit by staking their NFTs in NFTx. Instead of having their assets sit idle in wallets, holders can lock NFTs in the vault. When they do this, an ERC20 token representing their claim will be minted.
Stakers can also use these tokens to unlock and claim any NFT from the vault.
Earning by staking your NFTs in NFTx can be via Liquidity Staking or Inventory Staking. However, before you can stake your NFTs, you need to create a vault. Then, you can start staking your NFTs in the vault.
Here’s how to stake your NFTs on NFTx:
1. Connect your wallet to NFTx
To start staking your NFT on NFTx, go to NFTx.io. On the homepage, click on STAKING from supported options.
This should redirect you to NFTx Yield, where you can stake available NFTs in your wallet.
On the NFTx Yield page, click on CONNECT YOUR WALLET TO GET STARTED to link your crypto wallet to the platform.
Select the appropriate option from the wallets provided on the platform.
2. Select available pool
After connecting your wallet, click on EXPLORE POOL to stake your NFT to existing pools.
Use the search bar to look for your NFT collection, or scroll down available pools. Once you find the pool for your NFT, click on STAKE.
3. Stake your NFT
NFTx allows users to stake their assets via two different options: Inventory and liquidity staking.
Inventory Staking : With the Inventory Staking option, stakers can deposit their NFT assets or yield tokens pegged to their NFT collection’s floor price.
To stake your NFT with Inventory Staking, click on the NFT you want to stake and select INVENTORY from the staking options.
Tap APPROVE to give token approval to the NFTx Yield platform. Confirm the approval in your wallet to continue.
Finally, click on STAKE to lock your NFT. Confirm the process in the prompt that pops up in your wallet.
Once the Inventory Staking is successful, you’ll receive a ‘TRANSACTION SUCCESSFUL’ notification, and ERC20 tokens representing your staked position will be minted.
Liquidity Staking : With Liquidity staking, stakers can lock their NFT or NFT token with ETH. Here, SLP (staking liquidity provider) tokens that stakers can trade on SushiSwap are minted.
If you choose LIQUIDITY STAKING in the staking options, select the NFT you want to stake. The corresponding amount of ETH you must stake will be calculated automatically.
Click on APPROVE to give token approval to the platform. Confirm the approval in your wallet.
Once you’ve approved the NFT, click on STAKE to mint your staking liquidity provider tokens and lock your assets.
Confirm the transaction in the prompt that pops up in your crypto wallet.
You can view your staked position in your NFTx Yield account by clicking on DASHBOARD from the left side menu.
Staked positions are flexible and can be redeemed for NFT assets and ETH at any time.
2. Staking NFT on Only1
Only1 NFT platform is a Solana-based NFT network that doubles as a social media platform for trading and staking NFT. The platform is a one-of-a-kind protocol that allows creators to freely monetize NFT assets in the form of art.
The platform also has an excellent incentive structure that rewards users and creators for using the platform.
It paves the way for a permissionless ecosystem where creators can seamlessly connect with their audience via myriads of earning opportunities. These include NFT sales, Paid DMs, Genesis NFT sales, etc.
One of the most prominent features of the Only1 NFT platform is the availability of creator staking pools. Here, fans can stake the platform’s native token $LIKE on their favorite creator and collection.
Here’s how to stake NFT on Only1
- Connect wallet to Raydium
- Buy $LIKE tokens
- Connect wallet to Only1
- Explore staking pool
- Stake $LIKE to your favorite Creator’s collection
1. Connect wallet to Raydium
As mentioned earlier, Only1 is a Solana-based project, a blend of social and NFT’s digital representation.
Its native token, $LIKE, is an SPL token. Before you can stake on Only1, you must fund your wallet with $LIKE tokens.
The token is available on Centralized Exchanges like Huobi and Kucoin. It is also available on Solana-based Raydium DEX, where you can swap Solana coins for LIKE tokens.
You can easily fund your Phantom wallet with Solana from any CEX. After funding your wallet with enough Solana tokens, simply navigate to Raydium.io to swap SOL for LIKE tokens.
On the Raydium homepage, click on ‘LAUNCH APP’ to go to the RAYDIUM SWAP.
2. Buy $LIKE tokens
In the swap, click on CONNECT WALLET to link your Phantom wallet to the DEX.
Approve the connection in the prompt that pops up.
Once you’ve linked your Phantom wallet, select SOL in the first field as the token you’re swapping from. In the second field, select LIKE as the token you’re swapping to.
Input the amount of SOL you want to swap for LIKE and tap SWAP.
Confirm the prompt that pops up in your Phantom wallet to complete the transaction.
3. Connect wallet to Only1
After funding your wallet, it’s time to stake your assets on Only1.
Go to only1.app. On the homepage, click on CONNECT WALLET from the top right corner of the navigation bar.
Approve connection in your Phantom wallet.
4. Explore staking pool
On the upper navigation bar, click on STAKING to explore the available creator staking pool.
In the staking pool, you can stake LIKE tokens to any creator and their collection. Each pool contains details about the creator, staking APY yield, staked TVL, and the number of stakers.
Stake $LIKE to your favorite Creator’s collection
5. Select a preferred pool and click on STAKE
To stake in the creator staking pool, input the amount of LIKE you want to lock and click on STAKE. As simple as that.
You can view and unstake your positions under the STAKING section of the homepage.
Unstaking tokens requires a 7-day lock-up period. During this period, you will not be able to claim your asset for free.
However, stakers must pay a 2% fee to instantly unstake their asset.
Calculating NFT Staking Reward
Potential earning after staking an NFT asset solely depends on the type of collection you are staking, although time and volume also contribute to this.
Reward rates in NFT staking are like the Annual Percentage Yield (APY) in token staking. Therefore, you can easily calculate the potential return on your investment.
Most NFT projects that allow staking reward their participants with their utility token, DAO access, governance benefits, and even the ability to compound reward. Meanwhile, the exact reward still varies with the NFT project.
Conclusion
Like token staking, NFT Staking is an excellent way to generate additional revenue by earning yield rewards. It has also provided a new and important use case for NFT assets.
Therefore, it will improve the adoption of NFT among collectors, traders, and investors. It will also encourage developers to build an enabling platform that efficiently supports this new use case. Even play-to-earn users can gain enormously via this method.
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