Whether you’re Holding forever or flipping tokens every week, your NFTs are a great source of passive income. NFT projects and platforms now offer multiple ways to earn extra coin from collectibles that would otherwise just be sitting in a wallet. Best of all, it couldn’t be easier to get involved.
For those that have heard of earning passive income from NFTs but aren’t quite sure how it works, we’ve put together everything you need to know. Below, we have explained the main sources of passive income with a list of the best NFT projects for staking and earning passive income.
How to earn money from NFTs?
The most popular form of generating passive income from NFTs is staking. This involves “locking up” your token for a set period of time and earning yield. Yield is paid out in the form of tokens which themselves can have a market value.
Some NFT games have a relatively high price of entry. Renting out your NFTs to gamers that are unable to play because of this barrier is a great way to maximize your tokens’ earning potential, especially if you aren’t playing with them yourself.
While the rental space is still in its infancy, NFT owners can already dictate the price and the duration of lending their tokens.
Most NFT marketplaces offer the ability to collect ongoing royalties from minted tokens. This means whenever the NFT is sold, now or in the future, it will kick some profits back to the original creator.
This process is entirely passive and automated. And, with the implementation of EIP-2981 (https://eips.ethereum.org/EIPS/eip-2981), such royalties will be baked into the token itself, regardless of platform.
Top 10 best NFT projects for staking and earning passive income
1. BAND Royalty
BAND Royalty is one of the most exciting uses of NFT technology so far. It enables music lovers and fans to own tokenized versions of the royalties to their favorite songs. Owners of tokens then get to share in future proceeds and the royalties received.
The project launched with 3000 BAND NFTs with a long-term goal of 12,000. This keeps the community and earning potential tight for owners.
Within the BAND Royalty lineup you can find tracks by Beyonce, Jay-Z, will.i.am, Justin Timberlake, Rihanna, Cher, and Missy Elliot.
Ownership of a token also gives you access to the collection royalty pool. Staking your NFTs to this pool gives you an even larger slice of the royalty pie. The staking periods last from 90 days to 5 years with bigger rewards for longer lock-up times.
CyberKongz is a collection of randomly generated social avatars featuring an assortment of weird and wonderful ape characters. The collection launched in March 2021 with just 1000 tokens and quickly sold out.
With a strong community forming around the tokens, the project expanded its scope to include the $BANANA token. Holders of an original, genesis, CyberKongz NFT can earn 10 $BANANA a day up to the next 10 years!
These tokens can either be held and accumulated or burnt and used to rename your NFT, give it a bio, add characteristics, or even breed from it. With $BANANA necessary to breed and incubate the next generation of CyberKongz, “Baby CyberKongz.”
As it stands (April 2022), the $BANANA token is worth $6.80.
3. Axie Infinity
The biggest game in the NFT space, Axie Infinity is the definitive play-to-earn experience. Similar to pokemon but with ownership established on the blockchain, Axie Infinity allows players to battle, trade, power up, and breed their tokens.
In terms of earning potential, Axie Infinity rewards player activity with its native currency, AXS. With AXS carrying a decent value of its own, getting on the leaderboard through passively playing the game is potentially an extremely lucrative way to pass the time.
For truly passive income, AXS can also now be staked (https://axie.substack.com/p/stake) in order to earn valuable AXS rewards.
Additionally, Axie Infinity also rewards player activity with another token, Smooth Love Potion (SLP). This coin is an in-game currency but is now fetching value outside of the Axie ecosystem.
4. Wolf Game
Similar to Axie Infinity, Wolf Game is a play-to-earn NFT game with deceptively simple mechanics that open up to deeper strategy and gameplay.
The project is based on game theory, a social science topic regarding the interaction of competitive, but rational agents.
The game places emphasis on risky decision-making with players owning Wolf or Sheep NFTs on Ethereum. Minting requires $WOOL and players don’t know what token they’ll receive.
If you mint a Sheep, you can stake your token into the barn. This will reward you with $WOOL passively. Owning a Wolf earns $WOOL passively too in terms of “taxes”. This ERC-20 token has a market value and offers a great risk-reward opportunity.
5. The Sandbox
Alongside Decentraland, The Sandbox is fast becoming the NFT space’s definitive Metaverse platform. Thanks to its suite of user-friendly tools, anyone can create assets, cosmetics, experiences, and even games within The Sandbox universe.
This presents an opportunity for passive income with these creations tokenized as NFTs. Users can charge entrance fees, rent their mansion out, create desirable animations or accessories, or even engage in real estate, becoming a virtual landlord.
The platform makes use of the $SAND token which can be earned and staked to provide liquidity. This rewards stakers with an annualized yield with a very high APR.
NFTX is something a little different, allowing users to create their own ERC-20 tokens with NFTs used to issue value. Users can deposit their tokens into the NFTX vault which then lets them create their collection of ERC-20 tokens, with the value of each derived from the NFT.
These “vTokens” can then be used in different ways to earn passive income. The most popular is staking. Staking vTokens earns rewards passively and can also be pooled into Automated Market Makers to provide much-needed liquidity.
A play-to-earn NFT game, MOBOX is a metaverse in the making that gives players the opportunity to receive passive income.
The NFTs, known as MOMOs can be bought, sold, and minted, each having its own unique “hash power.” This determines the yield when staking your MOMO, with the token received called $MBOX.
Making the process even easier is the fact that upon minting a MOMO, it is automatically staked, earning users money from the get-go.
While your MOMO will have a starting hash power, rarer tokens can boost their standing and earn even more $MBOX. With $MBOX itself having a real-world USD value, this is a relatively easy and passive way to make money from NFTS.
Splinterlands is one of the most well-established NFT games in the cryptoverse. Similar to card-battlers like Hearthstone and Magic the Gathering, Splinterlands has players try to outwit each other with decks of collectibles, each with their own unique powers and abilities.
Aside from being genuinely fun to play, Splinterlands also allows players to earn passively. The game issues “Splintershards” ($SPS) for in-game activity and this can be used to interface with the Binance Smart Chain.
The SPS token allows betting on ranked matches, yield farming in liquidity pools, and staking for governance voting with DAO.
The game also issues Dark Energy Crystals ($DEC) for winning matches. In conjunction with $SPS These tokens can be used to boost the chance of receiving rewards through airdrops.
9. Famous Fox Federation
Leveraging the Solana blockchain, the Famous Fox Federation is a collection of 7,777 fox-based avatars in various get-ups. The project is one of the most well-established NFT projects on Solana and is a promising sign of the growth of collections beyond Ethereum alone.
The project allows holders to stake their Fox tokens and earn $FOXY coins. These tokens can be claimed through the project’s website and offer utility by being exchangeable for future mints and other features such as “Dens,” which is Famous Fox real-estate.
Foxes can also now be sent on missions, earning holders treasure chest tokens that can be worth considerable value.
Still a new concept, reNFT allows holders to loan out their NFTs for fixed fees and durations. reNFT is the first rental platform to hit the space but opens the door to a host of passive income opportunities.
The process is simple. After connecting a compatible wallet, lenders upload one or more NFTs, define their rental price, a collateral price is determined, and a max rental period is specified. The reNFT-escrow service then holds the NFTs securely. Renters can then borrow NFTs for a specified duration, fronting the collateral as a deposit. They then receive the NFT and can use it as they wish for that period of time.
This and future, similar, projects are expected to become extremely popular in the NFT gaming space where players may not (or cannot) want to commit financially to token ownership. Players may eventually be able to loan powerful items such as in-game weapons to complete difficult tasks or borrow a metaverse cosmetic for a virtual event.
The potential for platforms like reNTF is still being defined but are designed from the ground up to provide passive income to holders.
Whether you’re staking, renting, or simply raking in royalties, passive income is one of the key benefits of NFTs. With platforms making it extremely easy to make additional income, there’s no reason to simply let tokens idle in your crypto-wallet.