NFT has become a significant source to earn some money in the past two years. Many people are fascinated by this space, and they also want to know how many people are making millions in this space. With the NFT market surpassing more than $15 billion overall trade volume, many new people are coming into this space.
Almost all of them who are coming into this field want to earn money from their investment, and one of the best ways to make sure that they will earn a good amount is by generating passive income. Here, the passive income definition is the same as in the share market, which means making your money work for you by investing in some assets. You can earn a good amount by generating passive income with NFTs. In this article, we will share five ways to create passive income.
Ways to generate passive income
This is used by almost all the creators of the NFT artist. It is a great way to earn money. This means that whenever any artwork is sold to anyone, some percentage of its amount will go to the original creator, which will become a good source of income for NFT creators for an extended period. This amount is decided by the NFT creators or by the marketplace where it is listed, and this transaction is automatically done, and no one is ever going to change it because of the smart contract signed by both parties.
This type is going to be used more in the future. This is used to rent out popular NFT for a definite period to others. Terms are governed by the smart contracts, which both parties sign, and original NFT holders have the power to decide lease rate and duration. Many GameFi platforms allow NFT owners to earn passive income by using this renting method.
It refers to the process of locking away or depositing your digital assets into decentralized finance (DeFi) protocol smart contract, which will generate a yield. The yield which is generated is in the form of tokens. Many DeFi platforms have now given the option to their users to purchase their NFTs for staking, and they will provide them with rewards in the form of tokens.
4. Yield Farming
Yield Farming is a method where investors earn returns on top of returns by leveraging yield from one platform and investing them in another platform which would give them a good return. This can be done through a method like staking on the other forum.
5. Liquidity Pools
Due to the integration of NFT and DeFi protocols which is a great advantage to all the users, it has become possible to provide liquidity. In return, you will receive NFTs to establish your position in a liquidity pool. A liquidity pool is a digital assets collection locked in a smart contract and pledged by multiple investors. The platforms use this locked pool to give loans, and due to this, the platform shares a good amount of profit earned with its holders.
Through these ways, one can earn a good amount of passive income from NFT. However, it is noted that NFT is a relatively new thing. So, it is advisable to do multiple types of research before investing in any of the NFT or any above-listed ways.