What are NFTs?
NFT stands for non-fungible token. A non-fungible token is a financial security consisting of digital data stored in a blockchain, a form of distributed ledger.
For more detail, check out this article.
7 ways to monetize NFTs
1. Rent Out
Yes, you heard it right. You can rent them out the same way you can put up a property for rent and collect rent money. Renting an NFT entails loaning it to someone for a set amount of time in exchange for money. Renting out is an effective way to earn money from NFTs without losing out on ownership.
A royalty payment is a payment made by one party to another that owns a particular asset, for the right to ongoing use of that asset.
NFT royalties work in the same fashion, NFT royalties give you a percentage of the sale price each time your NFT creation is sold on a marketplace. NFT royalty payments are perpetual and are executed by smart contracts automatically. The average NFT royalty typically ranges from 5-10%. In most NFT marketplaces, the creator can choose their royalty percentage and the payments are automatic upon each subsequent sale in the secondary market.
3. Trade NFTs
If you can sell and rent out NFTs, you obviously can also trade them. You treat your NFT collection like stocks, buy low and sell high to make money. This method is more complicated because when it comes to trading NFTs, knowing when to sell is crucial and even the best traders in the world can’t always predict the market. For many making money from NFTs through trading may seem risky, but the payoff can definitely be worth it.
4. NFT Games
Play to Earn is a term you probably have seen a lot when looking at the majority of GameFi projects. Many blockchain-based games implement NFTs as a type of currency or asset like skins, characters, weapons, virtual lands and much more. You can distribute or sell them to make money which is why this gaming model is called play-to-earn.
5. Staking NFTs
NFT staking refers to locking up non-fungible tokens on a platform or protocol in exchange for staking rewards and other benefits. Because of the inherent nature of NFTs, collectors buy, hold, and speculate on the value of NFTs. But, NFT staking allows you to monetize your assets without losing them by selling. It also increases the demand for NFTs by attracting more investors to participate in NFT staking platforms.
6. NFT yield farming
Yield farming, also known as liquidity mining, is the process of earning yield on digital assets by locking them up as a stake in a DeFi trading or lending pool to act as a liquidity provider. NFT yield farming combines the concepts of yield farming and NFTs to create “NFT farming” as a new way to earn income in the DeFi markets. Unlike in “traditional” yield farming, where you deposit digital assets into a liquidity pool to receive token rewards, NFT farming involves the use of NFTs instead.
7. Invest in NFT startups
Investing in NFT companies is a great way to earn money from NFTs where you don’t even need to interact with NFTs or worry about the NFT market. Investing in companies is not a new strategy but a reliable one nonetheless. There are a lot of promising NFTs startups in the crypto market that are exhibiting excellent advancements. If you can invest in them as they take their initial steps into a revolutionary future, that would be fantastic.
Of course, the above are not the only ways for you to make money from NFTs. As a whole, NFTs are still relatively new and in the early stage of development. While there are risks, there’re likely a lot more ways for you to invest and make money from NFTs in the near future as more and more applications using NFTs surface.