Like many other social media storms that have graced the digital space lately, another one is bulldozing through it. NFTs, or Non-Fungible Tokens, are digital assets with unique identifying codes that can be bought or sold like any other product or service. They are digital tokens that can be claimed or bought as certificates for physical or virtual assets.
They’re quickly becoming one of the most profitable blockchain experiments in the century, with a growing number of supporters to back its unique money-making model. Certain high-profile influencers like Twitter CEO Jack Dorsey and lifestyle guru Paris Hilton have been vocal about their support for it, even going as far as auctioning off NFTs.
It helps to think of NFTs as tradable digital receipts stored on a publicly distributed database. This database is called a blockchain, and everyone has access to it and can independently verify at all times. These digital receipts contain unique information that can be used to prove who the sole owners of certain items are, whether they be tangible or intangible.
Although the cryptology behind NFTs is quite tricky, understanding what they are and how to make quick money off of them is not! Like with most labor of loves in life, this isn’t a get rich quick scheme to make you a self-made billionaire overnight. Having a basic understanding of how NFTs work, however, will definitely give you a leg up and the odds of your success will increase substantially.
While a vast majority of NFTs are created, bought and sold using Ethereum, high gas fees can make the process incredibly expensive. Raribleanalytics estimates that minting a single NFT on Ethereum costs around $98.69 in gas fees while minting NFT collections will put you out of pocket by $900, on average. But there are still numerous ways to generate an income from NFTs than selling them at a higher price than you paid or created them for.
1) NFT Minting
Minting your own collection is an excellent way to start making money from NFTs. You can do so by turning your valuable digital media such as photos, sports cards, tweets, music and even memes into NFTs, which can be done through popular marketplaces like OpenSea or Monnfts “app.monnfts.com”.
As is the case with digital collectibles, the unique selling point for your media-as-a-token is tied to the rarity of your NFTs, as well as the general attractiveness of your product to the general audience. You don’t even need to know how to mint your art into an NFT yourself as there are loads of online resources or, easier still, freelancers for hire to do the heavy lifting for you.
2) Buy things you truly enjoy
The golden rule of buying NFTs is to invest in ones you genuinely like and want to support. It’s the same thing with anything in life, really, that work doesn’t feel so much as work when you like what you’re doing. Purchasing a personal NFT you’re personally interested in because if things might not work out, ie. your token ends up being a dud, you’re at least left with something you appreciate on a deeper level.
3) NFT Royalties
The underlying technology that powers NFTs allows creators to set terms that impose royalty fees whenever their NFTs change hands on the secondary market. In other words, creators can receive passive income even after selling their creations to collectors. Just like any business. They’re able to earn a share of the sales price of the NFTs in question indefinitely. For example, if the royalty for a digital artwork is set at 10% in app.monnfts.com, the original creator will receive 10% of the total sale price each time their artwork is resold to a new owner.
4) Rent out other NFTs
Renting out NFTs is one way you can earn passive income, particularly those in high demand. There are certain card trading games that allow players to borrow NFT cards to boost their chances of winning, kind of like a good luck charm. The terms governing the deal between the two parties involved are governed by smart contracts so NFT users usually have the freedom to set their preferred duration of the rental agreement and the lease rate for the NFT.
5) Flip your NFTs
‘Buy low, sell high’ has always been the language of the market. The NFT market is no different, and NFT flipping has created enormous wealth for astute investors. NFTs cannot be exchanged for another outright, but they can generate income through the buying and reselling to higher bidders through an NFT marketplace. This hustle has proven quite lucrative for many, though it is not without risk — after all, beauty is in the eyes of the beholder and a flipper could end up spending big bucks on NFTs that others do not find valuable. Therefore, it’s important to do your own research and acquire an understanding of the drivers behind highly demanded NFTs before investing your life savings.
6) NFT Staking
As the name suggests, NFT staking refers to the locking up of NFTs on a platform or protocol to receive staking rewards and other privileges. This allows NFT holders to earn a passive income while still maintaining ownership of their NFTs.
While NFT staking is still in its infancy compared to other DeFi yield farming concepts, they work in a similar way. By locking up NFTs on a platform, you can receive rewards depending on the annual percentage yield (APY), the staking duration, and the number of NFTs staked.
Due to the unique nature of NFTs, investors and collectors generally prefer to HODL and speculate. NFT staking opens up a new opportunity for them to monetize their assets, which could potentially attract more people to participate and drive up the market demand for stakable NFTs.
Staking an NFT is just like staking your bitcoin (BTC) or ether (ETH). All you need is a cryptocurrency wallet with NFTs. However, not every NFT can be staked to earn rewards. The requirements vary from different projects, so it’s better to check on your preferred projects before acquiring the NFTs.
Conclusion
Making money with NFTs is an extremely risky business, but not entirely impossible. If you play your cards right, you just might be another one of the many millennial millionaires who have now live off their art.