Passive Income from NFTs - How to Earn On Digital Art

Passive Income from NFTs - How to Earn On Digital Art
Table of Contents

Throughout 2021, the non-fungible token (NFT) market has grown into a significant part of the cryptocurrency industry. While Ethereum is used to manufacture, buy, and sell most NFTs, hefty gas fees can make the process prohibitively expensive. According to Raribleanalytics, minting a single NFT on Ethereum costs roughly $98.69 in gas fees, while minting NFT collections costs around $900 on average.

Many investors and developers try to sell their NFTs on secondary marketplaces like OpenSea and pocket a profit to offset these costs. However, there are various ways to profit from NFTs other than selling them at a higher price than you paid or developed them for.

What is NFT?

NFTs are tradable digital receipts kept on a publicly distributed database known as a blockchain, which everyone can see and independently verify transactions at all times. These digital receipts contain unique and hidden information that can be used to verify who the only proprietors of certain tangible or immaterial goods are.

What distinguishes an NFT if it is entirely virtual? After all, in less than 5 minutes, I can copy and paste NFT artwork like Nyan Cat or the first tweet all over the internet.

To address this question, we must go meta. What distinguishes original artwork?

What makes an Eric Clapton guitar precious or an original Banksy valuable (even after it’s been shredded)? Nothing. Nothing but the history that surrounds them. History demonstrates that they were the first of their kind and will never be duplicated.

Eric Clapton’s guitar is just another guitar in the absence of context. I can quickly get a better, less-priced one at the nearby music store. Banksy, too, recognized the hypocrisy of originals and torched one of his originals, transforming it into an NFT instead.

What is NFT Staking?

NFT Staking, also known as farming, entails storing your rare assets on blockchain technology or smart contract to earn interest. In general, Staking is one of the many ways to make passive income in the crypto world that is regarded as safe, profitable, and with minimal investment risk (beware of scammers, though).

Validators must stake their cryptocurrencies to confirm blocks of transactions on blockchains that employ the proof-of-stake (PoS) technique to execute transactions. Furthermore, the length and payout for Staking are typically predetermined before the crypto assets are locked to a network, holding them out of circulation for a predetermined period.

How can you stake NFTs?

True, NFTs lack the features of significant cryptocurrencies (ETH, BTC) and cannot be combined for staking. NFTs, unlike cryptocurrencies, is not native coin like EHT or BTC, and they are non-fungible. As a result, various blockchain platforms have devised new methods to analyze these NFTs and estimate their particular return to develop a staking utility for NFT assets.

When you stake an NFT, the staking platform determines the asset’s value and the annual percentage rate (APR) earned. The value of an NFT will be determined by characteristics such as rarity, ability to provide a constant source of income such as royalties and the number of investors.

Where can you stake NFTs?

NFTs cannot be staked on many DeFi platforms that support other cryptocurrencies since they are non-fungible. As a result, a few projects are devoted to developing staking procedures for NFTs. If you want to stake crypto, you must transfer your NFT to a protocol that supports it or mint an NFT linked to a staking pool. Before moving your asset, you must first determine whether your NFT may be stacked on such a platform. Here are a few platforms for NFT staking.


When Staking is a staking platform for Onessus blockchain games that uses NFTs, it enables users to stake various game NFTs, including the native utility token (VOID), to back up platform NFTs. When Staking conveniently integrates to the WAX Cloud Wallet, the staking platform exclusively allows in-game NFTs from the Onessus blockchain, allowing them to be staked for a yield while also being used for in-game activities. Furthermore, depending on the lock-up time, When Staking offers APYs of up to 80% to holders.


Only1 is an NFT-powered social engagement network built on Solana that allows users to stake the native $LIKE tokens on individual NFT creators and earn based on the pool’s APY. Alameda Research backs it. When a new NFT creator joins Only1, a Genesis-NFT is produced and a staking pool.

On Only1, producers may mint and sell NFTs, but they can also publish and interact with their audience the same way they would on any other social media network.

How to generate passive income from NFTs?

Rent out NFTs

Renting out your NFTs, particularly ones in great demand, is one way to generate passive revenue.

Some card trading games, for example, allow players to borrow NFT cards to increase their chances of winning. Smart contracts manage the parameters of the arrangement between the two parties involved, as intended. As a result, NFT customers typically can determine the length of the rental agreement of NFTs and the lease rate for the NFT.

NFT royalties

The underlying technology that powers NFTs enables creators to specify terms that impose royalty costs anytime their NFTs are traded on the secondary market. In other words, even after selling their creations to collectors, the creators can earn passive revenue.

Stake NFTs

The ability to stake NFTs is one of the advantages of the marriage of NFTs and decentralized finance (DeFi) protocols. Staking is the process of depositing, or “locking away,” digital assets in a DeFi protocol smart contract to earn a return.

While some platforms accept a variety of NFTs, others require you to buy native NFTs to get staking token incentives (which are usually priced in the platform’s native utility token).

Platforms that support NFT staking include the following:

  • Kira Network
  • NFTX
  • Splinterlands
  • Only1

Provide liquidity to earn NFTs

The growing integration of NFTs and DeFi infrastructures makes it possible to supply liquidity while receiving NFTs in exchange for establishing your position in a specific liquidity pool.

For example, when you offer liquidity on Uniswap V3, the automated market maker (AMM) will issue an ERC-721 token, also known as LP-NFT, indicating your portion of the total amount locked in the pool. The token pair you placed, the tokens’ symbols, and the pool’s address are also carved into the NFT.

You can quickly liquidate your stake in liquidity pools by selling this NFT.


However, it should be noted that NFTs and the underlying smart contract technology are still in their infancy. As a result, many applications offering the prospects outlined in this essay are still in their early stages. Given this, it is prudent to conduct due research and understand the risks involved before implementing any of the solutions outlined above.