A guide to understand NFT Staking

What is NFT Staking?

NFT staking is the process of locking up NFTs on a platform or a protocol, earning rewards in exchange for this action. With this process, instead of simply holding NFTs and waiting for prices to go up, NFT holders can earn passive income while still retaining ownership of their tokens.

How does NFT Staking work?

The concept of staking assets and earning rewards has been introduced with the Proof-of-Stake (PoS) consensus mechanism, used in most blockchain networks. These blockchains rely on a global network of validators who verify the transactions on the chain and keep the network secure. To prove their participation in the network, validators pledge pre-purchased coins and keep them locked for a certain period. They will then receive rewards in the form of the network’s native cryptocurrency in exchange for staking cryptocurrencies and verifying transactions.

NFT Staking rewards

The reward structure offered for staking NFTs differs from platform to platform, where the amount of reward will be calculated based on factors such as:

  • Annual percentage yield (APY). Some platforms might also display the expected token rewards (e.g. 10 tokens per day) that can be earned during the staking period instead of a specific APY.
  • Rarity and number of NFT staked. Some projects will offer higher APY rewards for staking multiple NFTs or those with higher rarity scores.

Best platforms for NFT Staking

As the NFT staking trend is gaining traction, the number of platforms that provide this service is increasing. Let’s look at some of the best NFT staking platforms.

MOBOX

MOBOX is a Play-to-Earn (P2E) gaming metaverse built on Binance Smart Chain. It combines DeFi (Decentralized Finance) yield farming strategies with NFTs and allows users to stake NFTs. Yield farming is an investment strategy that rewards users for lending out or staking cryptocurrencies. Apart from including this strategy and rewarding users for their engagement and gaming activity, MOBOX rewards users for staking NFTs.

Splinterlands

Splinterlands is a collectible card game built on the Hive blockchain network. Players can buy and sell digital cards with unique NFT identifiers which can also be used in battles inside the game. Splinterlands is also set up as a DAO on Binance Smart Chain. As a result, users can stake the native token Splinter Shards (SPS) to earn rewards, participate in governance, and get special offers and bonuses.

NFTX

NFTX platform allows its users to create ERC20 tokens that are backed by NFT collectibles. Users will first deposit their NFTs into the NFTX vault and mint ERC20 tokens, which are also called vTokens. Users can stake these tokens to get staking rewards and purchase NFTs from the NFTX vault. Additionally, holders can also deposit their vTokens in automated market makers to provide liquidity for other users and earn rewards.

Doge Capital

Doge Capital is a collection of 5000 pixel-art NFTs minted on the Solana blockchain network. The holders of these NFTs will get a membership of the Woof club along with exclusive perks. Doge Capital offers a staking program that allows users to stake these NFTs and earn daily rewards in the form of DAWG tokens. When a user stakes one NFT, he can get a daily reward of 5 DAWG tokens. DAWG is the platform’s native utility token and is listed on multiple exchanges so that stakers can exchange their rewards with other crypto or fiat money.

Polychain Monsters

Polychain Monsters is a digital collectible and gaming ecosystem. The platform contains animated digital collectibles called Polymons which have different traits and varying levels of scarcity. Users can acquire the Polymon NFTs through digital booster packs. Holders can stake them on the platform and earn weekly rewards in the form of the native cryptocurrency called PMON.

Final thoughts

NFT staking is the most beneficial concept for Play-to-Earn and other gaming ecosystems, as the players can borrow the staked NFTs to participate in a game when they cannot afford to buy them. However, this concept has been expanded also to pure trading activities behind the NFT space, where it will be interesting to see where this innovation will take investors’ strategies.

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