Ever since NFT rose into global prominence last year, a lot of people and businesses have aped it. The survey confirms that the NFT trading volume rose by 704% between the second and third quarters of 2021. Show
7 Common Ways To Make Money From NFTsPerhaps you just bought some NFTs and you’re looking for how to make money with them, then you should check out these strategies: 1. Flip or Trade NFTsThis is the most common method of making money with NFTs because it works similarly to other markets. Flipping or trading NFTs simply means that you buy them at lower prices and sell them when the prices are higher – the difference is your profit.
→ For example, Azuki, one of the leading NFT projects, started with a floor price of almost 2 ETH, but the floor price has now increased to 25 ETH. Therefore, anyone who aped into Azuki at launch can flip at the moment with a profit of 23 ETH, and that is around $75,600.
2. Earn Royalties from your NFTsWith royalties, the primary owner of an NFT receives some percentages upon every resale of the collectible. Royalties are often defined in the smart contract of any NFT project.
3. Stake NFTsStaking is a profitable strategy that most NFT holders are not even aware of. Simply put, staking is the process of putting your digital assets in the custody of a protocol for a specified period so you can earn returns.
4. Contribute to a liquidity pool and earn NFTsIn the DeFi world, decentralized protocols or Automated Market Makers always want to ensure that tokens are available for their users to buy or trade at will. This is the reason they require entities to contribute to their liquidity pool.
5. Rent out your NFTsInstead of your NFT staying in your NFT wallet without bringing you any income, you can consider renting it out in a peer-to-peer agreement. You might want to ask, “Why would anyone want to borrow my NFT?”
6. Play Games With NFTsNFTs have developed a couple of use cases in modern-day games. Prime among these use cases is how NFTs serve as in-game characters. Once your NFT in-game characters win some tasks, you will be rewarded with some crypto.
7. Create and Sell Your NFTsOne of the ways you can make money in the NFT space is by creating NFTs. Bearing in mind that almost everything can be tokenized, then it means that everybody—no matter their skill or discipline—can create NFTs.
→ Start creating and selling NFTs with NFTify New Ways To Make Money From NFTsHaving examined the common ways to make money with NFTs above, we will go a step ahead to look at NFT money-making strategies that are still new and are not yet explored well enough: 1. License out your NFT's IP RightsThe interlocking of NFTs with the world of intellectual property rights has been budding a lot of innovative moves. While some NFT projects don’t sell commercial rights along with the actual NFTs, some do sell off both.
2. Invest in NFT ProjectsLooking at the way some NFT projects are becoming so profitable, investors are now shifting focus from backing only startups to also funding potentially disruptive NFT projects.
Pitfalls When Trying To Make Money From NFTsWhile it is true that you can make thousands and millions of dollars from the NFT space, it is equally true that your portfolio might easily get wrecked if you don’t take some caution or avoid some red flags.
1. Putting All Your Money Into NFTsThe NFT space is full of both old and new projects that you might find exciting and consider aping to them. As a result, you might believe so much in a project that you would want to risk all your entire capital on it.
2. Anonymous TeamsIf you want to make money from a particular NFT project, then you should be concerned about the integrity of the founders in the NFT space. Knowing the identity of the core team members is crucial in assessing the credibility of any project.
Now, is it the case that you can’t make money from NFT projects with anonymous founders? Not exactly. Even the founders of BAYC started anonymously. However, tread such projects with caution. 3. Returns That Are Too Good To Be TrueThis specifically applies to staking and farming NFTs, the platform or AMM will have to promise the user some percentages of APY. However, in the bid to encourage more people to stake, such an NFT platform might go overboard to over-promise.
4. Fake Social Media FollowersBefore you get into a project, you should check them out on major social media platforms, especially Twitter and Discord. If a project is a month old and it already has 50k followers on Twitter but it has low engagement, then you should calculate your steps before jumping into it.
5. High Minting PricesWhen a project that is not too solid has a relatively high mint NFT price, history has shown that its price action might not do well post-mint because it doesn’t have sufficient appeal to drive more demand.
6. Fake NFTsSince NFTs are taking over the world, frauds are also listing inauthentic ones for sale. Once you buy these fake NFTs, you should know that it might be impossible for you to flip them since they are not the original arts – thereby dampening your NFT money-making goals.
7. High buying limitsGenerally, most NFT projects often limit the number of NFTs their member or to-be-member can buy to 5. This is to ensure that the collectibles are evenly distributed and not concentrated in the custody of one person or a few people.
Concluding WordsDApp Radar reported earlier this year that the NFT market has a total value locked (TVL) of $178 billion. This figure is increasing every day and the industry is opening up various opportunities for people to make money.
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