NFT Passive Income Ideas – How to Earn Passive Income With Your NFT

Take a quick look at this. Investing in stocks, bonds, and securities used to be a well-known route to passive income, which had a long waiting period and wasn’t always as rewarding as investors had hoped. NFTs, on the other hand, have been shown to be a more reliable short-term method of earning passive income while you sleep.

Nevertheless, how is it done, exactly? How can anyone fully understand and profit from NFTs without putting in too much effort at all? Now without wasting any time, let’s jump straight into it.

What are NFTs?

In 2015, the NFT technology was launched to allow artists and creatives to earn more money for their work. NFTs are digital bits of content that are connected to the blockchain. NFTs are distinct from one other and cannot be used interchangeably. This means that no two NFTs are the same.

Imagine NFTs as the Mona Lisa; while millions of replicas exist, there is and there will be only one real Mona Lisa. NFTs are primarily used to purchase and sell digital artwork, including virtual real estate, video game skins, virtual trading cards, and so on.

However, since their inception, non-fungible tokens have evolved into something more than a digital token associated with a work of art. It has grown to the point where creators and non-creators can all earn passive income.

How to Generate Passive Income From NFTs

There are several easy ways to generate passive income from NFTs, they include:

Rent out NFTs

You may choose not to sell your Non-fungible Token, and that is perfectly acceptable. Why? Because there will be individuals who need access to some of your NFTs but have no desire to purchase them. This presents a possibility for you to make additional passive income from your NFTs without actually selling them.

Various card trading games let players borrow NFT cards to increase their odds of winning. As you could have anticipated, smart contracts manage the transaction conditions between the two parties. Hence, NFT users typically can specify the length of the rental agreement and the lease rate for the NFT.

When it comes to renting or lending NFTs, ReNFT is an excellent platform to use. Lenders can select maximum loan terms and daily interest rates, currently ranging from 0.002 to 2 Ethereum. Depending on how much you think it’s worth and what the other party wants to pay, you can set the rental price.

Before the NFT may be released, the borrower must pay the agreed-upon sum. Smart contracts are designed to govern the agreement terms between the concerned parties. For that reason, NFT customers can choose the length of their lease and the price of their NFT rental.

NFT Royalties

Even after selling their works to collectors, the creators can continue to receive passive income. Here’s a breakdown of the process. As an alternative to selling your NFT for a one-time charge to another customer, the Creator Share function lets you earn a portion of any subsequent sales of the NFT. Because of this, you will continue to receive a percentage of the sale price of the NFTs you have created.

Truth be told, it is virtually impossible to know how much the NFT will be valued in the future. Imagine how the shareholders of Beeple’s jpeg felt after it was sold for $69 million just a few months ago. This is just one example of how the NFTs world is blowing up, and people are making a living out of it. Indeed, the statistics can be quite startling.

Royalties are paid automatically via smart contracts upon the sale of the NFT. What a convenient method to earn passive income. Importantly, smart contracts (self-executing computer programs that enforce contractual obligations ) manage the entire royalties distribution process. This eliminates the need for creators to manually enforce royalty conditions or track payment, as the process is totally automated.

One of the most scalable and straightforward ways to generate a passive revenue flow is to use the “Creator Share” option of the platform on which you’re selling your NFT. However, nothing beats earning money each time an asset is transferred to a new owner. It is what every person interested in passive income dreams of.

Nonetheless, this feature is not available on all platforms. You may want to have a look at a platform like Zora, where you may earn royalties by activating the ‘creator share’ function.

Stake NFTs

Staking rare assets on the NFT blockchain technology or smart contract is a way to earn interest on the value of your assets. Staking is regarded as one of the safest, most profitable, and least risky ways to earn passive income in the crypto market (always be wary of scammers).

The staking platform can determine an NFT’s value and annual percentage rate (APR) when you stake an NFT. Factors such as uniqueness and the capacity to generate a steady source of income, such as royalties and more investors, will influence the value of NFTs.

These platforms are typically decentralized and presumably provide a high level of protection for your assets until you are ready to unlock them (carry out your own due diligence and ensure that the smart contracts are audited!). While some platforms accept a variety of NFTs, others require you to purchase native NFTs in order to earn staking token incentives (which are typically priced in the platform’s native utility token).

Platforms that support NFT staking include the following:

• Splinterlands
• Only1
• NFTX
• Kira Network
• Onessus

Provide Liquidity to Earn NFTs

You can earn LP tokens by providing liquidity to liquidity pools. Cross-chain Bridge v2.0, for example, offers a reward for liquidity as pools are single-asset liquidity pools. You can use $TXL, $USDC, $USDT, or any other cryptocurrency listed on the platform to generate passive income. You earn extra tokens in a liquidity mining pool for which you are already providing liquidity by staking your LP tokens.

You earn an extra $TXL by providing liquidity to the associated $TXL liquidity mining pool. The more people who bridge the asset you provide liquidity when your Liquidity Mining Pool tokens are staked, the higher your APR.

Adopt NFT-powered Yield Farming

If the asset you’re investing in has a farming feature, you can stake your LP tokens in the respective farm. Sticking to the above example, farms have multipliers and earn rewards from the $BRIDGE farm token generated on a per-block minted basis. You have two options with the $BRIDGE acquired from the Farms:

• With the $BRIDGE tokens you earn, you can participate in a reward pool and earn another passive income.
• If you want to gain a one-time profit, you can sell them on a DEX.

If you put your $BRIDGE into the $TXL Reward Pool, for example, you will receive $TXL as a reward. If a user withdraws $BRIDGE from a Reward Pool, they are required to pay a withdrawal fee. This cost is intended to burn $BRIDGE and will be used to incentivize long-term staking.

Other Ways to Generate Passive Income from NFTs

Here are some bonus tips on how to earn passive income from NFTs:

NFT license fees

The fundamental technology supporting NFTs enables developers to impose royalties on their NFTs when sold in the secondary market. That being said, you can participate in the pricing of NFTs eternally. If the license cost for a digital piece of art is set at 10%, the original creator will get 10% of the total sale price whenever the work is resold to a new owner.

Remember that when creators enter NFTs, they commonly use these fixed percentages. Additionally, smart contracts govern the entire process of license distribution. This eliminates the need for you, the creator, to manually apply your licensing conditions or track payment, as the process is totally automated.

Earning Staking Rewards

You shouldn’t keep your NFT sitting around in your wallet all the time, though. Participating in staking programs is another simple way to generate passive money. Your art NFT can serve as security for other crypto assets that you wish to borrow.

It is essential to select assets that you anticipate will appreciate over time and stake them so that you can realize the rewards of those currencies. If you participate in the staking program, you’ll receive a passive bonus. You should expect to get anywhere from 3-300% of your stake back on the PoS blockchain.

The Bottom Line

NFTs are all over the place, rising fast in worth and holding the promise of turning thousands of investors and NFT holders into millionaires. Think of how much income you could make passively from NFTs and other currencies based on blockchain technology innovations in a few years.

But, it is worth noting that NFTs and the underlying smart contract technology are still in their infancy. Thus, many of the applications described in this article are still in the testing stage. It is prudent, therefore, to take caution and gain a thorough understanding of the dangers associated with any of the ways outlined above.