NFT staking is a new way to earn passive income in the crypto world. It lets NFT holders lock their assets in DeFi platforms to receive rewards. All without the need to sell their NFT collections.
Similar to DeFi yield farming, NFT staking relies on a Proof of Stake (PoS) mechanism to reward participants. By locking up NFTs, users can receive rewards based on the annual percentage yield (APY) and the number of NFTs staked.
At the individual level, NFT staking can benefit investors, as the overall supply tends to be lower. But in a broader context, NFT staking brings new use cases to NFTs that go beyond the idea of collecting digital art.
But as the NFT market grows, developers, artists, and collectors are exploring new use cases for their NFT collections. One of the latest use cases is using NFTs as utility tokens in staking platforms. For example, in some gaming metaverses, NFT collectors can stake their NFTs to boost their game character’s abilities and earn extra rewards.
What is NFT staking and how does it work?
Staking an NFT is just like staking your bitcoin (BTC) or ether (ETH). All you need is a cryptocurrency wallet with NFTs. However, not every NFT can be staked to earn rewards. The requirements vary from different projects, so it’s better to check on your preferred projects before acquiring the NFTs.
Where can I stake NFTs?
As of December 2021, most NFT staking opportunities come from play-to-earn games. MOBOX and Zookeeper are two examples. Some projects are also developing NFT staking ability on their platforms, such as Binance Fan Token Platform and Doge Capital.
The MOBOX metaverse is called MOMOverse, and the NFTs are called MOMOs. You can mint, earn, or purchase MOMOs from the NFT marketplace. Each MOMO has different qualities and a randomly generated hash power. By staking unique MOMOs, you can farm the governance token MBOX. The more MOMOs you collect, the more MBOX rewards you can get each day.
These MOMO NFTs can also be used across other MOBOX partner platforms, and the NFTs from partnering projects can be used on MOBOX as well. For example, you can use your staked PancakeSwap Profile NFTs on MOMOverse without having to unstake them from PancakeSwap. This lets you enter team battles and earn CAKE staking rewards on PancakeSwap, and at the same time utilize them in MOBOX games to earn MBOX rewards.
To increase APY rewards, you can choose to lock your tokens for a certain period, up to 180 days. You can also stake NFTs called ZooBoosters to maximize your rewards and reduce the locking period for your WSLP. ZooBoosters are NFT cards that can be obtained in gold chests purchased in the DApp or by staking ZOO tokens.
NFT PowerStation on the Binance Fan Token Platform
Binance Fan tokens allow sports fans to access special club perks, such as exclusive discounts on tickets and limited-edition merchandise, voting and decision-making rights to the club’s matters, reserved exclusively for the holders of such tokens.
NFT staking allows participants to make an extra income from their idle NFT collections. At the same time, NFT staking is creating new use cases for NFTs that were never explored before. It might be too early to tell, but we will probably see new NFT staking opportunities being created. Not only for NFT collectors but also within the Play-to-Earn gaming industry and other areas powered by blockchain technology.
Disclaimer: This article is for educational purposes only. Binance has no relationship to these projects, and there is no endorsement for these projects. The information provided through Binance does not constitute advice or recommendation of investment or trading. Binance does not take responsibility for any of your investment decisions. Please seek professional advice before taking financial risks.