How to Make Passive Income from NFTs in 2022
Do you dream of traveling the world or relaxing on the beach, scrolling through online dating sites, sipping on champagne, and paying for everything via passive income? You can make this dream a reality by following our NFT passive income guide!
NFTs and Passive Income Explained!
NFTs are tokens hosted on the blockchain. These tokens allow you to own digital assets such as art, music, and even real estate in the metaverse. Passive income is the income earned through little to no labor and requires limited maintenance. As blockchain technology develops, people are now able to generate passive income by owning NFTs. A good niche website design will help you a lot in this case. You can design your WordPress website from a NFT developer. Check out below some of the top NFT passive income examples.
1. Staking NFTs to Earn Passive Income
A great way to earn passive income at home is to stake your NFTs. Staking is where you pledge your NFTs to a blockchain network, and as a reward for doing this, the blockchain will pay you cryptocurrency, which you then can trade, swap, sell or collect. While your NFTs are staked, you cannot sell or move them. You need to lock up a certain percentage of tokens to process transactions quickly and increase the network’s security. To strengthen the network, NFT holders are incentivized to stake their NFTs by a promised reward in the form of cryptocurrency.
Staking is one of the most popular passive income ideas for NFTs because investors still retain ownership rights of their NFTs, and they can earn an income while holding their NFTs. The downside to this passive income strategy is that while your NFT is staked and you can’t sell it, the price of your asset may drop significantly, resulting in heavy loss. However, if you plan to hold your NFTs for many years, staking is a great way to generate a yield.
2. Renting Out NFTs to Make Passive Income
One of the latest NFT passive income trends is renting out NFTs to gamers! There are now multiple games where players can rent NFTs, which enhance their gaming experience. These NFTs can include weapons that help players defeat powerful enemies, tools that help them scale a mountain or build a house, or skins to make players’ characters look cool.
The great thing about this strategy is that the transaction is all automated via smart contracts. You simply enter the duration you want to rent out your NFT and the cost, and the blockchain will automatically find you a renter, making it a great passive income for beginners. Gaming experts are predicting that soon major games will feature NFTs, and renting or purchasing them will be essential if you want to enjoy a game fully.
As NFTs continue to rise in price, many gamers cannot afford to own one. This is where you can earn a huge yield by renting them out. In this scenario, everyone wins, as the gamers get to enjoy their game fully, and you get to earn a completely passive income from your NFT. The downside to this strategy is that if your NFT code can only be used in one game and when that game loses popularity, there may be no one willing to rent your NFT. This is why you need to buy NFTs with multiple use cases, and that are so famous that numerous developers will want to feature them in their game.
3. Earn a Passive Income via NFT Royalties
An incredible way to earn a passive income is with NFT royalties. NFT royalties work similarly to royalties for other creative assets such as music, films, and art. Every time someone uses your NFT or sells your NFT, they have to pay you a percentage. The awesome thing is these royalties are built into a smart contract, so every time a transaction gets executed on the blockchain, you will receive your royalty automatically!
The most common form of NFT royalty is a percentage charged every time an NFT is sold. The most common royalty is between 5% and 10%. For example, if your NFT is sold for $5,000 and you have a 10% royalty, you will receive $500. Every time your NFT is sold, you will continue to receive royalty payments, and these passive income payments will continue to rise as the asset appreciates.
If you pull out your passive income calculator, you can quickly see that the returns you can receive on NFTs are much higher than traditional passive returns from equities or real estate. If you try out our recommended strategies, you will be on the fast track to automating your passive income! Please comment below on what passive income NFT strategies you are using and how profitable they are. Here’s an ultimate guide to NFTs that’s very helpful to learn more.