People buy non-fungible tokens (NFTs) for many reasons, one being so that they can invest in a new and volatile product with potentially high-profit margins. The volatility in the crypto market creates opportunities for earning through buying NFTs.
Let’s take a look at different ways to earn by buying NFTs:
Renting out an NFT is one way of making money off NFTs. After purchasing NFTs, you can rent them out to interested users and make an extra buck. The popularity of virtual gaming and the metaverse has driven demand for NFTs, and rather than pay top dollar to own an NFT, gamers will opt to rent the token instead. ReNFT is an example of a leading platform that allows users to rent or lend NFTs. These lending platforms deploy smart contracts that set borrowing periods and payable rates during the lending.
Ever asked yourself how to make money with NFTs you bought? In the crypto world, staking is a popular way of earning passive income. Now, with decentralized finance (DeFi) protocols, you can earn more from your crypto assets. Staking NFTs allows holders to invest and earn income from their digital art and other collectibles while maintaining ownership. By locking up digital assets like NFTs on supporting platforms, you will receive payments depending on the annual percentage yield (APY), number of NFTs staked, and the staking duration.
Want to earn NFTs? It is now possible to supply liquidity to different DeFi protocols, especially decentralized exchanges (DEX), and earn NFTs in return. For instance, liquidity providers on Uniswap V3 are supplied with a liquidity pool NFT known as LP-NFT, which holds information regarding the provider’s share of the liquidity pool. What’s more, you can simply liquidate your share of the pool to make money by selling off the NFT.
Invest in NFT-backed Yield Farming Projects
Yield farming has been the go-to earner on DeFi protocols. With NFTs like LP-NFT earned for providing liquidity to Uniswap pools, liquidity providers can further invest their NFTs in yield farming projects that support earnings for staking the collectibles. Given that the NFT-backed yield farming projects are in their formative stages, traders should carefully research which projects are worth putting their crypto assets.
Earn from Secondary NFT Sales
As a creator, the underlying token standards allow you to set and earn royalties even on secondary sales of the NFTs. So, creators can receive passive income even after selling their collections to fans. For instance, a 5% royalty means that the creator will automatically receive 5% of the NFT sale each time the token gets a new owner. This method is deployed by many NFT creators today.
As a nascent industry, the NFT space is one that investors should take a keen interest in if they are looking to grow their portfolio. Making money from buying or creating NFTs should not be overlooked as there is a huge potential for profit in the venture. NFT minting cost is fair so you will not require huge capital to get started.
Can I make money with NFTs?
Yes, you can. You can leverage the price difference between retail price and the true value of NFTs on markets to flip the NFTs for profit. You can also earn by buying NFTs, renting them out, or staking. Additionally, you can mint your own NFTs and earn royalties from their sales in secondary markets.
Is NFT art a good investment?
Yes, it is. Currently, the NFT market is just getting started and soaring. As more firms and individuals join the space, the early birds will certainly reap huge profits.
How can I get rich from NFTs?
There are two main ways: Create your own NFTs and sell and, through flipping the NFTs. As a creator, ensure you mint tokens that will be exciting to the market so that you can sell for huge profits. While flipping, ensure you select undervalued projects and hold them before selling for significant profit margins. Remember, all investments involve risks and require you to conduct necessary research before executing the trades.