In the year since NFTs exploded in popularity, the situation has only gotten more complicated. Pictures of apes have sold for tens of millions of dollars, there’s been an endless supply of headlines about million-dollar hacks of NFT projects, and corporate cash grabs have only gotten worse.
Non fungible tokens (NFTs) seem to have exploded out of the ether this year. From art and music to tacos and toilet paper, these digital assets are selling like 17th century exotic Dutch tulips some for millions of dollars.
But are NFTs worth the money or the hype? Some experts say they’re a bubble poised to pop, like the dotcom craze or Beanie Babies. Others believe NFTs are here to stay, and that they will change investing forever.
All this news may have left you wondering: what is an NFT, anyhow?
Table Of Content
- What are NFTs(Non Fungible Tokens)? Complete Understanding
- How Does NFTs(Non Fungible Tokens) Work?
- How to Make or Earn Money With NFTs(Non Fungible Tokens)? 9 Various ways And Strategies
- How To Sell NFTs(Non Fungible Tokens) Faster?
- 10 best NFT marketplaces
What are NFTs(Non Fungible Tokens)? Complete Understanding
- The process of verifying the ownership of both physical and digital assets is an integral component of most businesses and systems. Furthermore, throughout history, individuals have collected scarce and valuable assets such as art, jewelry, and land.
- Today that trend has extended into collectibles like autographed memorabilia, trading cards, and more. Traditionally, the ownership and authenticity of these assets have been facilitated by paper-based or centralized digital systems, which are often inefficient, present friction in the transfer of assets and leave room for fraud.
- In 2017, Dapper Labs launched a decentralized application on the Ethereum blockchain called CryptoKitties, which was the first true example of digitally verifiable and transferable non-fungible tokens. These non-fungible tokens, or NFTs, are collectible game characters with randomly assigned attributes that make each CryptoKitty more or less rare.
- Using the native digital signature scheme on the blockchain, it is easy to verify the authenticity of each CryptoKitty, its unique attributes, and its owner. Furthermore, the friction and risk of fraud in the transfer of these assets to a new owner is drastically reduced.
How Does NFT Work?
NFTs work on blockchain technology. Each NFT has the potential of several different applications due to its distinctive construction. A digital asset management platform is an ideal vehicle for digitally representing physical assets, such as real estate and artwork. In addition to removing intermediaries and connecting artists to audiences, NFTs can also serve as identity management platforms because they are built on blockchains.
- The majority of NFTs reside on the Ethereum cryptocurrency's blockchain, a distributed public ledger that records transactions.
- NFTs are individual tokens with valuable information stored in them.
- Because they hold a value primarily set by the market and demand, they can be bought and sold just like other physical types of art.
- NFTs' unique data makes it easy to verify and validate their ownership and the transfer of tokens between owners.
Many crypto-trading enthusiasts and art collectors use NFTs. Additionally, it can be used for digital content, gaming items, investment collateral, and domain names.
As NFT is easily created from digital objects, it includes both tangible and intangible items which includes Music, Tweets, GIFs, Art, Designer objects.
Evidently, Jack Dorsey, co-founder of Twitter, sold his first tweet as an NFT for more than $2.9 million.
How to Make or Earn Money With NFTs(Non Fungible Tokens)? 9 Various ways And Strategies
From top brands and small businesses to celebrities and common individuals, everyone is raving about them and gearing to join the race. In 2022 alone, the NFT market surpassed the $12 billion mark, up from $162.4 million at the start of the year.
Though some are making a big fortune with NFTs, there are still many on the side-lines planning to get the most out of it. If you are among those,
Let’s take a look at some of the most profitable ways individuals and companies are making money during the current NFT gold rush.
- NFT Video Games
- Trading NFTs
- Staking NFTs
- Digital Works of Art
- Licensed Collectibles
- Invest in NFT startups
- Royalties
- Rent Out NFTs
- Adopt NFT-powered yield farming
- 1. NFT Video Games
The NFT based video games could very well be the future of NFT technology. So far, none of the games utilizing Non Fungible Tokens managed to gain widespread popularity, but the potential of applying NFTs to video games seems tremendous.
Gamers are already known to spend fortunes on virtual items. World of Warcraft gold, Call of Duty loot boxes or Counter Strike skins all of these markets are already worth billions. If any major video game company decides to sell in-game items as NFTs, the impact of such a decision on both gaming and blockchain ecosystems would be tremendous.
It’s also worth noting that NFT video game developers are among the most ambitious Non Fungible Token creators, and NFT in-game items might push the evolution of Non Fungible Technology forward.
Compared to simple digital trading cards, or even to more interactive NFTs like virtual works of art, in game NFTs are by far the most advanced. Non-Fungible Tokens utilized in video games can be very complex, fully interactive, and they can change over time, for example, by being upgraded or by leveling up along with the player’s character.
- 2. Trading NFTs
Trading NFTs is a smart and easy way of making money easily and efficiently. You can purchase an NFT collection and make a profit by selling them at higher rates.
However, trading NFTs is not an easy task. The trick lies in selling them at the right time, which directly depends on various factors like what the NFT is, why you bought it, and if there’s any other interest in the item. You can quickly research the internet and different marketplaces to determine these factors.
Before you go ahead trading the NFTs, you need to keep in mind that not all NFTs are created equal. Some are worth millions, while some are basically worthless. So as a trader, you need to keep a close eye on each and every prospect for making good money in future resale.
- 3. Staking NFTs
The ability to stake NFTs is one of the advantages of the marriage of NFTs and decentralized finance (DeFi) protocols. Depositing, or “locking away,” digital assets into a DeFi protocol smart contract to create a yield is referred to as staking.
While some platforms allow you to use any NFT, others require you to buy native NFTs to gain staking token incentives (which are usually priced in the platform’s native utility token).
Examples of platforms that facilitate NFT staking include....
- Kira Network
- NFTX
- Only1
- Splinterlands
Sometimes a portion of the advantages delivered to stakeholders is denominated in governance tokens, as is the case in some instances. As a result of these protocols, token holders can influence how their ecosystems develop in the future. Staking NFTs yields coins that can be re-invested into other yield-generating protocols in the majority of cases.
Because of the ongoing integration of NFTs and DeFi infrastructures, it is now possible to contribute liquidity and get NFTs in exchange for establishing a position in a specific liquidity pool, allowing you to establish your position in a specific liquidity pool. Also, generally speaking, staking is a relatively stable way to earn money from NFTs.
As an example, if you give liquidity on Uniswap V3, the automated market maker (AMM) will issue an ERC-721 token, also known as the LP-NFT token, which represents your portion of the total amount locked into the pool. The NFT is additionally engraved with the token pair you inserted, the tokens’ insignia, and the pool’s address, among other things.
You can sell this NFT to swiftly liquidate your liquidity pool stake.
- 4. Digital Works of Art
When it comes to sheer profitability, individual NFT artworks are by far the most valuable Non Fungible Tokens ever created.
On March 11th, the history of blockchain technology and the history of art changed forever. Christie’s, one of the most renowned auction houses in the world, sold an NFT work of art for $69 million. It was the first time when Christie’s auctioned a fully digital artwork.
The piece entitled “Everydays: The First 5000 Days” was created by a digital artist Mike Winkelmann, better known as Beeple. The NFT is not a single artwork but a collage of 5000 tokenized images which Beeple was creating every day over the course of years.
While some people are already raising concerns that selling what is essentially a link to a picture for millions of dollars could be just a front for money laundering, others believe that NFTs are a true revolution in the world of art.
The record-breaking price set by Beeple’s NFT may soon be surpassed. After all, Beeple was, until very recently, a completely unknown artist. If someone like Banksy decides to auction an NFT work of art, the price would likely be much higher than $69 million.
- 5. Licensed Collectibles
Turn physical collectibles into NFTs, sell them and start making money in no time. Yes, you can securely store your physical collectibles in the form of digital assets on the blockchain and get the same or higher price for them.
So far, sports cards are the most popular type of licensed NFT collectibles. However, brands are slowly joining the NFT bandwagon with their licensed collectibles to make the most out of it.
One of such brands is NBA, who recently introduced its NFT card collection on the market. Looking at the craze, it’s the right time to convert your physical collectibles into NFTs and put them up for sale.
- 6. Invest in NFT startups
When it comes to how you can earn money from NFTs, investing in NFT companies is a great strategy. When investing in NFT companies, you can indirectly earn money with NFTs. If there’s one thing Non Fungible Tokens have established, it’s that they’re not a fad in the crypto world. They have a wide range of applications in several industries that have the potential to transform the world.
There are a lot of promising NFTs startups in the crypto market that are exhibiting excellent advancements. If you can invest in them as they take their initial steps into a revolutionary future, that would be fantastic. NFT startups are a great way to earn money with NFTs without direct exposure to the volatile marketplace.
- 7. Royalties
Is it possible to earn royalties from something as intangible as NFT?
Yes, you can. Even after selling a digital asset to someone else, the creator can earn passive lifelong royalties. The creator, however, must impose these terms, and you will receive royalties for the rest of your life if someone buys the asset you developed.
For artists, royalties are an excellent choice for passive income. Although it may seem confusing at first, royalties are worthwhile to consider when it comes to earning money from NFTs.
- 8. Rent Out NFTs
One of the best ways to earn money through NFTs is to rent them out. Renting out NFTs can be a good source of passive income for the NFT creators and collectors. The interesting thing is that you can use the NFTs for the long term, without having to create new ones.
You can rent out your NFTs in games, or any other platform, that allow users to borrow NFT cards. You can even use platforms like reNFT to rent or lend NFTs to others.
No need to worry, all the NFTs that you rent are governed by smart contracts, however the NFT owner has the privilege to set their preferred duration of the rental agreement and the lease rate for the NFT.
- 9. Adopt NFT-powered yield farming
AMMs that are driven by NFTs are now available for users to farm for yields, as NFTs are soon becoming a key component of AMMs in general. When you combine different DeFi protocols, you can generate the highest possible yield from your digital assets. This is known as “return farming.”
To demonstrate how the LP-NFT tokens offered as liquidity provider tokens on Uniswap can be used as collateral or staked on other protocols to earn extra yields, we will utilize the example of the Uniswap platform.
Consider it as a means to earn a yield on top of a process that generates a yield on its own. With this possibility, a multi-tiered income generation technique that is ideal for yield farmers can be implemented. Farming is a great way to earn money from NFTs with little to no effort.
How to sell NFT quickly with smart strategies
Are you struggling to sell your Non Fungible Tokens? NFT Marketing will help you sell your NFTs Fast with Social media!
Let's face it....Selling NFTs (Non fungible Tokens) is NOT easy!
It's actually pretty damn hard...
Yes, you need to start focusing on Marketing your Non Fungible Tokens.
You can't just expect to list them on Opensea or Rarible and start getting NFT sales.
You've gotta put all your efforts in marketing your NFTs if you really want to end up selling well and make yourself a good amount of money.
NFT promotion is an art in itself. You need social community building, growth hacking, SEO, content marketing, PR, and paid advertising to broadcast your NFT item benefits to your target audience.
Here are the top strategies to promote your NFT:
- PR: Public relations is one of the best ways to build a solid online reputation for your business. Using PR for NFT marketing yields a better ROI because with PR, you can send the right message to the right people at the right time.
- SEO: Search engine optimization services help to improve the organic visibility of your NFT project. There are several search queries that people enter when looking to buy an NFT.
- Which are the best NFTs to buy?
- Where can I buy an NFT?
- How to buy an NFT?
- Best NFT tokens
- List of top-selling NFTs
- Where can I buy NFT trading cards?
- Influencer Marketing: Influencers are experts in their field, and they have the power to affect the purchasing decision of others. NFTs and social media go hand in hand, and influencers help spread the word about your digital artworks, leading to more traffic acquisition, better project visibility and higher bids.
- Social Media Promotion: Beeple’s NFT was sold at Christie’s auction for $69 million. Among all the other factors contributing to this high price, there is a social media factor that should not be overlooked. Beeple has a large social media follower base of more than 2.5 million spread across different channels. Hence, social media is a crucial factor for community building and NFT promotion.
10 best NFT marketplaces
Here are some of the top NFT marketplaces right now.
- OpenSea
- Axie Marketplace
- Larva Labs/CryptoPunks
- NBA Top Shot Marketplace
- Rarible
- Theta Drop
- Mintable
- Nifty Gateway
- Foundation
- SuperRare