After the digital art sector exploded in 2021 due to a slew of incredibly expensive NFT sales, there are now more people than ever interested in making money from NFTs – and who could blame them?
However, many investors are hesitant to take the plunge due to the blockchain’s complexity and the steep learning curve involved with obtaining a deeper understanding of NFTs. Furthermore, because of NFTs’ inescapable ties to the cryptocurrency world, most people associate the NFTs with scams and get-rich-quick schemes and do not believe they have any legitimate use cases. That, however, is not the case.
As it turns out, there are numerous methods to make money from NFTs, as long as you are prepared to invest your time and/or money and do the research. In many cases, the method you should pursue will largely depend on your previous experience, skillset, and the amount of time you can dedicate. On that note, we’ve compiled a list of some of the best active and passive ways to make money using NFTs, so let’s get started.
Active ways to earn money with NFTs
An active income is simply money you make by performing an action. You must dedicate your time to the task, and if you don’t put in the work, you won’t get paid. Here are a few ways you can earn money actively with NFTs.
Minting and selling your own NFTs
Minting and selling your own NFTs is one of the most lucrative ways to generate money in the NFT industry. As previously stated, numerous multimillion-dollar NFT sales have occurred since the beginning of 2021. With the space becoming more popular by the day, many investors are willing to purchase NFT art at a premium, which means that if you have the talent, there may be an opportunity to cash in. The good news is that becoming an NFT artist is far easier than it sounds.
NFT trading/investing is one of the most popular ways to make money actively in this space. As with any other type of trading, there are typically two ways you can go about it, short-term (such as scalping, day trading, or swing trading) or long-term. The former of these two options require much more of a time investment, and if you are a beginner, you are highly likely to lose money while you learn the ropes.
With that said, there are plenty of opportunities to make a profit. To put it simply, the aim of the game is to understand the NFT market by keeping your ear close to the ground by listening out and observing hype around projects. That way, you can buy NFTs cheap and sell them for a profit once the projects become more popular.
Don’t forget to check out our Token Boom series if you want a weekly overview of the major events that are taking place in the industry. And you should also check NFT drops if you want to gain access to exclusive launches directly from an NFT artist that you can trade on NFT marketplaces.
Play To Earn (P2E) games
Believe it or not, you can now earn crypto by playing games. Thanks to blockchain technology and the underlying fundamentals of NFTs, a whole new sub-sector of the gaming industry has been born. In general, these games function just like any other, but the items, assets, collectibles, and the in-game currency you acquire can all be traded and sold to other players and exchanged for cash. Amazingly, thousands of workers in the Global South have replaced their full-time jobs with NFT games, with many people earning double the average wage in their countries.
Passive ways to earn money with NFTs
As the name suggests, passive income is when you earn money without directly inputting your time and energy. However, with most passive income opportunities, you will be required to invest a large amount of capital (or time) upfront before you can “earn money in your sleep.”
Staking your NFTs is an excellent option for people looking for a simple and (relatively) low-risk way to generate passive income. Staking, in a nutshell, allows NFT holders to lock their assets in DeFi platforms in order to obtain rewards, all without having to sell their NFT collections. This means you can lock up your NFTs and receive payments based on the APY and the number of NFTs staked. The more you stake, the more you win.
Rent out your NFTs
NFT renting is another way to profit from the world of play-to-earn games. Simply put, many of the games in the NFT industry require a large upfront investment for you to participate and begin making an income from them, which can range from $1,000 to $10,00 (or more). As a result, you can buy the necessary NFTs for these games and then rent them out to gamers who can not afford them but still want to play the games. These NFTs typically come in the form of in-game tools, characters, skins, or even plots of land, and they frequently provide players with a competitive edge. Players pay the lenders (you) a percentage of whatever cryptocurrency they earn while battling, farming, or racing online in exchange for renting the NFTs.
NFT royalties are conditions added into an NFT’s metadata during the minting process. Royalties, like those in the music and art industries, typically pay the creator a percentage of future sales or profits whenever an NFT is sold or exchanged on the market. However, unlike in traditional sectors, NFT artists have complete control over their established conditions, and royalties are always paid automatically in a trustless environment. This means that no contract or written agreement is required. Instead, royalties will always be paid to the parties to whom they are entitled, as specified in the smart contract.
Therefore, if you are an artist, musician, or creator of digital content, you can earn passive income from your work each time it is sold. However, this is not exactly a guaranteed source of income since the number of royalties you will receive are determined by a range of external factors, such as the NFT owner’s desire to sell and the existence of a willing buyer. The average NFT royalty is between 5 and 10%.
There are plenty of ways to earn an income with NFTs; some require more time and energy than others. If you have the time and want to dive deeper into the NFT world, then you could consider trying your hand at NFT trading, play–to-earn gaming, or you could even create and mint your own NFTs with the intent of selling them to investors. If you prefer a more hands-off approach, then methods such as NFT staking, renting, and long-term investing could prove to be more suitable for you, as long as you have the capital required to make it worth your while.