The world of blockchain technology is constantly evolving with new and innovative ways to earn rewards popping up all the time. One of the newest developments is the ability to stake non-fungible tokens or NFTs for rewards.
Staking has long been a popular method for cryptocurrency investors to earn rewards, but until recently it was only available for exchangeable tokens like Bitcoin or Ethereum. However, with the advent of NFTs, staking has become an option for collectors and investors holding this unique digital asset.
Definition of Staking NFT
So, what is NFT staking? In simple terms, staking involves locking up NFTs on a blockchain platform or protocol and getting a reward in return. These rewards can be in the form of additional NFTs, cryptocurrencies or other tokens.
NFT staking can be compared to staking on decentralized DeFi yield farming. In yield farming, investors lend or place their cryptocurrency to liquidity providers, who use it to facilitate transactions on the blockchain. Stakers get rewards in the form of interest or transaction fees.
How to Stake NFT
In order to stake NFTs, users must connect their assets to a supported platform or protocol. This process can vary depending on the blockchain and the type of NFT used. Once the NFT is staked, users can be rewarded in the form of additional tokens or fees. This reward can be reinvested, sold, or held as a store of value.
Even though NFT staking is still a new concept, it has received support from the blockchain community. Many platforms and protocols provide staking services for NFTs, and this trend is likely to continue to grow as the NFT market grows.