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Cryptogambling / Ways to Earn Passively With NFTs in June 2024

Ways to Earn Passively With NFTs in June 2024

Publish Date: 24/03/2023

NFTs have evolved from just being flashy virtual images and internet sensations to valuable investment opportunities in the digital art, gaming, and collectibles space. With the increasing adoption of blockchain technology, it’s no surprise that NFTs have gained immense popularity. They offer various lucrative avenues for investors to diversify their portfolios and take advantage of the earning potential of these digital assets.

Introducing NFTs

A pile of chips that have NFT written on them

NFTs or Non-Fungible Tokens are distinctive digital assets on the blockchain that represent ownership of digital or physical assets such as art, music, collectibles, and other virtual assets. NFTs are created on the blockchain through tokenization, which is the process of converting an asset or the ownership rights of an asset to a unique digital asset called a token that is usable on blockchain applications, such as NFT marketplaces or decentralized applications (dApps).

NFTs have unique characteristics, transaction history, and value which are stored and can be authenticated on the blockchain. The value of an NFT is usually determined by three major factors:

  • Rarity: the uniqueness and limited availability of an NFT due to factors such as the number of copies that exist, the artist’s reputation, and the historical significance of the NFT make them more difficult to obtain or possess and as such, are more valuable because collectors and enthusiasts are often willing to pay more for rare NFTs.
  • Utility: the practical usefulness or real-life benefits that some NFTs offer such as providing access to exclusive events and experiences or project merchandise can positively influence the value of an NFT since people will be willing to pay more to enjoy the added benefits beyond the aesthetic appeal.
  • The interplay of demand and supply: the demand and willingness to pay for available NFTs also reflect in their value. Market trends and hype cycles often determine which NFTs are in high demand and which NFTs are marketable

NFTs vs Crypto

arm wrestling scene

Non-fungible tokens and cryptocurrencies share some similarities. For one, they are both tradable digital assets that can be traded and are built on the same software and blockchain technology such as the Ethereum network. When it comes to NFTs and coins, the blockchain maintains an immutable ledger of all transactions involving the assets which creates a transparent and trustworthy system where every transaction is recorded and verified.

On the other hand, the major difference between NFTs and crypto is fungibility. As the name implies, non fungible assets (NFTs) are unique digital assets that are not mutually interchangeable, exchangeable or replaceable. This means that each token on the blockchain is singular, special, and irreplicable, and can only be held by one address at any given time, unlike fungible coins like Bitcoin and Ethereum where all units on the blockchain maintain the same value. For instance, the value of one bitcoin in Satoshi Nakamoto’s address has the same value as one bitcoin in any other address, but the value of Bored Ape NFTs in different addresses vary.

Another difference between crypto and NFTs can be found in the different processes of creating and bringing assets into circulation; while crypto coins are “mined,” NFTs are “minted.” The process of mining coins involves the use of heavy computing power to solve complex mathematical algorithms in order to validate transactions on the blockchain network in exchange for newly created units of the cryptocurrency being mined. Alternatively, the process of minting an NFT involves encoding any asset’s metadata onto a blockchain network to create a unique digital asset.

Ways to Earn Passively With NFTs in June 2024

Laptop on Beach towel next to Flip Flops and a pineapple on the beach

While many investors are drawn to the potential of flipping NFTs for profit, there are also other ways to earn passive income with NFTs that are worth exploring. In this article, we will explore some of the most promising ways to generate a passive income stream with NFTs, including trading, staking, yield farming, and rentals.

Creating NFT Collectibles

The first way to earn passive income by leveraging the NFT market is to mint NFT collectibles and sell them to NFT enthusiasts and collectors. NFTs are a solid way for artists of any kind to monetize their work and earn passively. This is easier said than done though, as there are many NFT items and collections that have been left unsold or undervalued for a long period due to errors from the point of creation. Here are steps to ensure that you successfully create and deploy your NFTs on the blockchain:

Identifying a niche for NFT collectibles

NFTs are digital assets that take on many forms such as virtual images, digital art, videos, music, and game collectibles, among many others. It is important to study the market and determine the niches that are in demand, but more importantly, it is preferable as an artist to choose a niche that you are most creative in and can continuously create and build a story and audience around.

Selecting a suitable blockchain

With the advent of NFTs, numerous blockchains have emerged that host digital assets. While Ethereum remains the biggest and most popular blockchain for NFTs, other networks have also stepped up their game and now offer a range of NFT services. Choosing the right blockchain is essential because it not only dictates the technology employed but also impacts the security measures taken, the marketplaces accessible, the ease of use, the fees involved, and the buyer community, which all ultimately influences the value of your NFTs.

Also, remember that any price movement on the native currency of the blockchain where your assets are stored will directly impact the value of your NFTs. Therefore, selecting the most appropriate blockchain for your NFTs could make a significant difference in the success of your digital asset investment.

Creating unique and valuable NFT collectibles

In today’s highly competitive NFT market, where cheap imitations and knock-offs abound, it is essential to establish yourself as an original artist or creator with the intellectual property rights to your assets. By doing so, you can gain credibility and a competitive edge over others.

It is equally important to create utility for your NFTs, which can be achieved by tying your NFTs to a specific product or service, such as exclusive access to a private community, a discount on merchandise, or even real-world experiences. By providing utility for your NFTs, you not only enhance their value but also attract a wider audience of potential buyers who are looking for more than just a pretty picture.

NFT Trading

Person sitting at desk trading cryptocurrencies

One of the most popular ways to earn from NFTs is by trading. NFT trading is the process of buying and selling digital assets either on a marketplace or directly from other traders or artists. A common term used in the NFT market is “flipping,” which refers to buying an NFT for a lower price and selling it at a higher price on the secondary market within a short period. Those with enough capital can purchase promising NFTs and sell them for a profit after the asset’s value increases.

Pro tip: If you don’t have the capital for more expensive NFTs, you can still seek alternative blockchains with cheaper NFTs such as Solana or Arbitrum. You can also use Rarity-checking platforms to find hidden gems that would sell for more.

However, the marketplaces where you trade your NFTs matter, as they have varying levels of security, unique selling methods, wallet compatibility, and gas fees. These factors can influence whether your assets are sold successfully and the amount of value attached to them. Therefore, it is crucial to select a marketplace with fewer reports of hacks or technical issues that cost users their assets. Additionally, the marketplace should support the type of crypto wallet that you intend to use. By choosing the right marketplace, you can successfully trade your NFTs and make a profit from the digital assets market.

NFT Utility

The word NFT written on a circuit Board

While flipping NFTs is a popular way of earning passive income, you can also generate profits by holding them in your wallets and leveraging their utilities. The two major NFT utilities in the market are staking and yield farming.

Staking

NFT staking is a decentralized finance concept that allows NFT holders to lock up their assets using smart contracts and generate passive income without losing ownership rights. To stake an NFT, you must lock it up on a Proof-of-Stake blockchain protocol for a set period of time, typically in exchange for rewards such as the platform’s native tokens, governance rights, airdrops, or other NFTs. The amount of rewards you earn depends on several factors, including the number of NFTs staked, the staking duration, and the annual rate offered by the staking platform.

When selecting an NFT staking platform, you must consider various factors such as annual staking yield, staking limits, lockup period, in-built lending mechanisms, and security. Not all NFT projects offer staking options, but it is more common in play-to-earn games with in-game items as NFTs and some DAOs that allow holders to participate in project governance by locking up their assets in the DAO pool. In addition to earning rewards from staking, the process can also create scarcity of NFTs, driving up their value.

Staking your NFTs can be a smart investment strategy to earn passive income and increase the value of your assets. However, it is essential to conduct thorough research and carefully consider the risks before investing in any NFT staking platform. With the right approach and platform, NFT staking could be a lucrative investment opportunity for NFT enthusiasts and investors alike.

Yield farming

NFT yield farming is an attractive option for investors who are looking for a way to earn a passive income without the need for continuous trading. It is a relatively new concept that is gaining traction in the NFT space, and it offers a unique way for investors to earn rewards while holding their NFTs. In contrast to traditional yield farming, where you provide liquidity in the form of digital assets to earn token rewards, NFT yield farming utilizes non-fungible tokens instead. This means that you can use your NFTs to earn interest by providing liquidity on DeFi platforms. The liquidity provided can be used to fund other projects or

Orange Financial, a multichain yield farming treasury, is an example of a promising platform that provides stablecoin rewards to its holders through yield farming. It was publicly minted in February and has already gained a significant following.

When considering NFT yield farming, it is important to note that yield farming is a relatively new concept in the NFt space, and you should do your due diligence and thoroughly research the DeFi platforms you plan to use. These platforms come with risks, such as smart contract vulnerabilities, liquidity issues, and market volatility. Therefore, you should choose platforms with a solid reputation, a high level of security, and a proven track record of generating rewards. As the NFT market continues to grow, more platforms are likely to emerge, offering different options for NFT yield farming.

Renting Out NFTs

One person handing an item to another person

NFT renting is another new and exciting way to earn passive income from your non-fungible tokens. The concept allows NFT holders to rent out their digital assets for a set period of time, receiving payment from the renter in exchange. This is made possible through the use of smart contracts which automate the predetermined and pre agreed terms of the rental between the parties. NFT renting  provides a steady stream of income for the NFT holder, without requiring them to sell their valuable asset. This method is common for GameFi platforms that allow holders to rent in-game items to other NFT gamers within the ecosystem.

To start earning passive income through NFT renting, you must first find a suitable platform. There are several online marketplaces that offer NFT rental services, each with its own terms and conditions. Some popular platforms for NFT rentals include Nifty Gateway, SuperRare, and Rarible. It is important to research and compare these platforms to find the one that best suits your needs and offers the best rental rates.

Once you have chosen a platform, you will need to establish the terms and conditions for renting out your NFTs. This includes setting the rental period, rental price, and any rules for usage or display of the NFT during the rental period. It is important to establish clear and detailed terms to avoid any confusion or disputes with the renter. With the terms agreed upon, you can start collecting passive income through NFT renting and watch as your digital assets generate a steady stream of revenue for you.

NFT Roles

Creating an NFT collection as an individual is no easy feat, but for massive projects like BAYC, DeGods, or World of Women, the process requires even more time, effort, and resources. However, participating in these projects presents an opportunity to earn passive income by taking on various roles critical to the project’s success. From blockchain developers to marketing managers, community managers, project copywriters, and influencers, there are several roles to consider.

  • Blockchain developers: are responsible for creating and deploying smart contracts and handling technical issues related to NFTs. Their expertise in blockchain programming languages like Solidity and JavaScript is essential to the successful implementation of NFTs on the blockchain.
  • Marketing managers: develop and execute strategic marketing plans to attract and retain customers. They may also handle collaborations with other projects, alpha groups, or brands, and the onboarding of influencers and affiliates.
  • Community managers: guide NFT project communities, keeping them active and productive. They ensure that discussions are on-topic, users follow policies, and the community remains engaged.
  • Project copywriters: are responsible for writing and interpreting project information for the public, including content for the whitepaper, landing page, blog, news releases, and social media.
  • Influencers: help promote NFTs and expand their reach, receiving periodic payments and other perks like free or discounted NFTs and exclusive access.

Conclusion

That concludes the list of ways to make passive gains with NFTs this month. Remember to always do your research before buying into any project or connecting your wallet to any platform. The aim is to make money not lose money.

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