Detailed explanation of NFT equity pledge: how to earn passive income by staking NFT
NFT staking is a promising fork of DeFi that has the potential to solve some problems when it comes to NFT transactions. Most importantly, it offers NFT holders an opportunity to earn tokens from their NFTs without having to sell them, making it an attractive passive income model.
It’s still early days for NFT staking, but given the magnitude of NFT growth, and the utility behind NFT staking, it’s not hard to imagine this practice will only become more common in the future. So, without further ado, let’s learn about NFT staking and why it’s worth noting.
Like cryptocurrency staking, NFT staking involves “locking” assets in exchange for interest or rewards.
What is NFT Staking?
We previously mentioned NFT staking in our NFT passive income guide, but we’re going to dig a little deeper here.
Essentially, NFT staking refers to “locking” an NFT through the NFT project itself or on an external platform. In return for staking NFTs, holders earn so-called “staking rewards”. Therefore, staking NFTs provide holders with a way to earn passive income from their NFTs without having to sell them.
Staking is a practice that comes from a variety of cryptocurrencies and tokens, especially those that use proof-of-stake (PoS) protocols to confirm transactions. Like NFTs, staking crypto tokens involves locking tokens for a period of time in exchange for passive income through staking rewards.
For PoS blockchains, staking is a key feature that allows these networks to process transactions and remain secure. Additionally, staking rewards for blockchain and Web3 platforms often come in the form of network transaction fees or interest.
Why Stake NFTs?
One of the biggest problems with NFTs is liquidity. That said, selling NFTs is not always easy due to their non-fungible nature. In fact, the value of an NFT is largely subjective — its value is the amount a particular person is willing to pay for it. On the other hand, fungible tokens such as cryptocurrencies are much easier to trade because they have a market-defined value relative to both fiat currencies and other cryptocurrencies.
The solution provided by NFT staking is that it allows holders to profit from their NFTs without having to find a buyer directly. In this way, staking solves the liquidity problem of NFTs.
How NFT Staking Works?
As mentioned above, NFTs are staked in much the same way as cryptocurrencies. Of course, due to the nature of fungible cryptocurrencies and non-fungible tokens, there are some key differences between them.
The rewards for staking an NFT will vary, depending on the NFT itself and the platform on which you stake it. Typically, however, staking rewards are in the form of platform-native tokens, offered daily or weekly.
Pacific is a decentralized NFT marketplace and an integrated platform for metaverse/GameFi assets. The project has received endorsement from some of the most eminent institutions and investors, including the Web3.0 Foundation, NGC, Gate.io, Krypital Group, PAKA, Candaq etc.