How to Earn Passive Income From NFTs: A Beginner’s Guide by Sarah Kutu

Non-fungible tokens (NFTs) had a massive run during the 2021 bull run in the crypto market, with various digital collectibles storming the market. Each token had unique use cases, including gaming, trading, and digital investing. 

Though the buzz around NFTs isn’t as loud as it used to be, there are still many ways to make money actively or passively. This detailed guide explores how to invest in NFTs with passive income and make the most of the market. Keep reading!

What is an NFT and How Does it Work?

It would be wrong to assume that everyone reading this article already has a full grasp of what NFTs are. So, before looking at the ways to earn money from NFTs, it’s crucial to understand what they really are. 

An NFT is a unique digital asset used to represent ownership and authenticity in the crypto market. Every NFT has a unique identifier tagged to just one individual, and this detail is easily accessible on the blockchain. 

For instance, an artist can create an NFT of a painting and place a value on it. This helps them monetize their creative assets using blockchain technology. That way, they can create another source of income aside from physical person-to-person sales. 

However, the actual values of NFTs are determined by factors like popularity, rarity, and overall market demand. After creating the digital asset and placing whatever value they consider fair on it, the trader lists it on NFT marketplaces to connect with potential buyers. 

Popular NFT marketplaces include OpeaSea, Mintable, and Binance NFT. Once a buyer purchases the NFT on any of these trading platforms, it’s stored on the blockchain and the original owner is always traceable using the asset’s history from the network. 

Best Ways to Earn Passive Income From NFTs

Here are the most common ways to make NFTs a source of passive revenue, whether you’re a digital creator or an investor:

Minting and Selling New NFTs

As stated earlier, anyone can create and sell anything on NFT marketplaces. From minting music to pictures, artworks, and digital pieces of land, there are no limits to what you can offer to NFT collectors. 

Selling these NFTs on large marketplaces like OpenSea creates more visibility and exposes you to a large customer base that can patronize you. Moreover, there are online communities on platforms like Telegram and Discord, where creators can connect with potential buyers. 

Considering that creators also set the value of their items and there are little to no third parties, it’s relatively easier to make money from creating new NFTs and selling them. 

Flipping Existing NFTs

If you’re not a digital creator or someone who can mint NFTs, you can still earn passive income by trading ready-made digital items on NFT marketplaces. This involves purchasing an NFT collection from a creator and relisting it for sale at a higher price. 

This is similar to buying cryptocurrencies at a lower price on one exchange and selling for a higher price on another exchange. 

That way, you can pocket the profit as passive income. However, the hack is to sell off the NFTs at the right time. If you hold them for too long, you may end up selling at a lower price than when you bought them. 

Earnings From Royalties 

NFT ownership cannot be changed or transferred even when the digital item has changed hands. So, as a creator, setting up an NFT royalty structure can help you earn passively. With such royalties, you can continuously earn money anytime your item is sold to a new person. 

For instance, if you have a 15% royalty on an NFT item, you’ll earn 15% of whatever amount it is sold in the future. So, even when its price increases, your royalty does the same. Moreover, the entire process is facilitated by the blockchain, so you don’t have track payments yourself. 

NFT Staking 

Staking is arguably the easiest way to earn passive income from crypto, and staking NFTs that make passive income can be profitable. These passive income NFTs are locked up over a specific period and they reward users based on their staked volumes. 

All you have to do is choose a protocol or decentralized app (dApp) that supports NFT staking and lock in your asset in it. However, it’s important that you cannot sell or trade the digital asset during its staking period. 

NFT Gaming

Finally, you can earn passive income from NFTs through games. There are numerous NFT games that allow players to collect digital collectibles that they can trade for money on NFT marketplaces. 

For instance, metaverse games like Decentraland and The Sandbox allow players to purchase in-game items, including NFT avatars. Each avatar holds value, making them NFTs that make passive income without stress. 

Like other forms of NFTs, gaming assets are tradable on external NFT marketplaces, helping users make more money from initial sales and continuous exchanges in the market. However, it’s crucial to note that not all NFT games allow users to trade their digital assets for money. 

Some games have their NFTs limited to their ecosystems, making their digital collectibles valueless in the real world. So, it’s important to research these games properly to find platforms with passive income NFTs easily. 

Conclusion 

While the popularity of NFTs has dwindled compared to their glory days, they remain viable investment opportunities. Investors, creators, and traders can earn passive income by tapping into various earning channels with passive income NFTs. 

We’ve highlighted the most used methods of investing in NFTs that make passive income. However, do your due diligence before investing in any NFT project. 

Safeguard Your NFTs in One Place Using Zypto 

After minting, buying, or collecting NFTs, the next thing is to secure them from potential loss or theft. This is where the Zypto DeFi Wallet comes in. The modern crypto wallet supports thousands of tokens and digital assets like NFTs. 

Visit the Zypto website today to learn more about the wallet and how it works. 

Which of the NFT passive income methods in this article are you likely to adopt as an investor looking for NFTs with passive income? Share your thoughts in the comments below.

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