rewrite this title 4 Ways to Earn Passive Income with NFTs

Passive income is a popular strategy among digital asset holders because it enables earning money with minimal effort by leveraging existing assets. Strategies like staking and liquidity mining have helped NFTs gain rapid global adoption by offering new ways to generate revenue.

Since their emergence, NFTs have continued to maintain their popularity in the crypto space. According to a report published by Business Research Insights, the NFT market is expected to reach a volume of $73.9 billion by 2028. These investments provide various opportunities for content creators, those seeking regular income, and investors. As a result, it has become possible to earn passive income through NFTs in multiple ways. The renowned digital asset security company, Ledger, lists 4 methods for earning passive income using NFTs.

1. Staking NFTs

Staking allows users to earn rewards while retaining control over their digital assets. By locking NFTs into a blockchain network or liquidity pool for a minimum period known as the staking duration, users contribute to the network’s security and transaction speed. In return, they receive staking rewards in the form of crypto tokens. The rarer the NFT, the higher the potential rewards. These tokens can later be traded or swapped for preferred assets. However, NFTs cannot be sold or transferred while they are staked.

2. Renting NFTs

NFT rental platforms offer a newer passive income stream for owners. These platforms help determine rental prices and duration, and the entire process is governed by smart contracts that automatically return the NFT to the owner at the end of the rental period. Renting NFTs is particularly useful in Play-to-Earn (P2E) games, where the NFT increases a player’s chance of winning. It’s a mutually beneficial method that provides earnings for the owner and game advantages for the renter.

3. Generating Yield Through NFT Liquidity

NFT liquidity pools allow users to utilize the value of their NFTs without selling them. This method lets investors retain ownership of their collection while using its value on other platforms to generate passive income. NFTs are deposited into a vault, and in return, users receive vTokens (ERC-20 tokens) representing the NFT’s floor price. These vTokens can be invested into DEX liquidity pools like Balancer or Uniswap to earn rewards. Once profits are collected, vTokens can be returned to reclaim an NFT from the same collection, usually for a small fee.

4. Earning Royalties

Another way to generate passive income from NFTs is through royalty payments. This method enables creators to earn from digital artwork even after ownership is transferred. After creating a piece, the artwork is minted—meaning it is turned into an NFT and recorded on the blockchain. A smart contract is then programmed with royalty terms, typically ranging from 5% to 10%. Whenever the NFT is resold, a portion of the sale is automatically sent to the original creator. For instance, if an NFT sells for $1,000 with a 5% royalty, the creator earns $50 each time it’s sold.

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