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- 1 There are multiple ways to generate passive income using NFTs.
- 2 NFTs are an untapped stream of passive income.
Non-Fungible Tokens (NFTs) have become a popular topic in the world of cryptocurrency and blockchain. While most people regard NFTs as digital art or collectibles, they can also be used to earn passive income.
Musicians, creators and celebrities have taken to NFTs to monetize their work. Digital artists have also turned to non-fungible tokens to generate income through their art. Earning passive income has become a huge hit. NFT holders can earn money on their assets with minimal efforts.
Ways to Earn Passive Income
There are several ways to earn passive income through NFTs. Here we will look at five ways:
Royalties
One of the easiest ways to earn passive income with NFTs is through royalties. When an NFT is sold, the creator can earn a percentage of the sale price. This percentage can be set by the creator, and it can range from a few percent to as much as 10% or more.
Staking
Another way to earn passive income with NFTs is through staking. Staking involves holding an NFT and earning rewards. These rewards can come in the form of tokens, which can be sold or traded for other cryptocurrencies.
Yield Farming
Yield farming is a relatively new concept in the world of cryptocurrency, but it is quickly gaining popularity. Yield farming involves using NFTs to provide liquidity to decentralized finance (DeFi) protocols. In exchange for providing liquidity, investors can earn rewards in the form of tokens or fees.
Rental Income
NFTs can also be used to earn rental income. For example, an NFT that represents ownership of a virtual world or game asset can be rented out to other players for a fee. This rental income can be a steady source of passive income for the owner of the NFT.
Fractional Ownership
Finally, NFTs can be used to earn passive income through fractional ownership. Fractional ownership involves dividing ownership of an NFT into smaller pieces and selling those pieces to investors. Each investor earns a portion of the royalties or other income generated by the NFT, providing a passive income stream for each investor.
NFTs offer a variety of ways to earn passive income, from royalties and staking to yield farming, rental income, and fractional ownership. While the space is still in its early stages, the potential for earning passive income with NFTs is significant. The NFT market creates new ways for crypto users to explore the growing digital asset economy. It is likely to play an increasingly important role in the future of finance. But, investors should do their research and be cautious when investing in any new technology or asset class.
Disclaimer
The views and opinions stated by the author, or any people named in this article, are for informational purposes only, and they do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
