Disclaimer: This article is for educational purposes only. Binance is not affiliated with or endorses these projects. The information provided through the Binance platform does not constitute investment or trading advice or recommendations. Binance is not responsible for any of your investment decisions. Please seek professional advice before taking financial risks.
Disclaimer: This article is for educational purposes only. Binance is not affiliated with or endorses these projects. The information provided through the Binance platform does not constitute investment or trading advice or recommendations. Binance is not responsible for any of your investment decisions. Please seek professional advice before taking financial risks.
Summary
NFT staking is a new way to earn passive income in the cryptocurrency space. Holders can lock NFT assets in decentralized finance (DeFi) platforms to earn rewards, all without having to sell their NFT collections.
Similar to DeFi liquidity mining, NFT staking relies on the Proof of Stake (PoS) mechanism to reward participants. After users lock NFTs, the rewards they receive will be calculated based on the annual yield (APY) and the number of staked NFTs.
For individual investors, since the overall supply of NFTs is usually low, the staking income is considerable. But in a broader context, NFT staking has long surpassed the significance of digital art collection, and NFT has ushered in a new use case.
Introduction
Most people think of non-fungible tokens (NFTs) as digital artworks and collectibles that appreciate in value over time. Some NFT projects share revenue with the community of NFT holders, with revenue coming primarily from secondary market sales and royalties.
The NFT market continues to grow, and developers, artists, and collectors are exploring new use cases for their NFT collections. The most representative novel use case is to use NFTs as utility tokens for staking platforms. For example, NFT collectors stake NFTs in certain game metaverses to improve the skills of game characters and earn additional rewards.
What is NFT staking and how does it work?
As the name suggests, NFT staking refers to locking NFTs in a platform or protocol to earn staking rewards and other privileges. NFT holders can earn passive income while enjoying NFT ownership.
NFT staking is still in its infancy, but the concept of operation is similar to other decentralized finance (DeFi) liquidity mining. After users lock NFTs to the platform, the rewards they receive will be determined by the annual yield (APY), the length of the stake, and the number of NFTs staked.
Due to the special nature of NFT, investors and collectors usually choose long-term holding and speculative trading, and NFT staking provides them with new opportunities to monetize assets, which can attract more people to participate and increase market demand for pledged NFTs.
Staking NFTs is not much different than staking Bitcoin (BTC) or Ethereum (ETH). All you need is a cryptocurrency wallet to start your NFT journey. However, not all NFTs can be staked to earn rewards. The specific requirements vary from project to project, and it is best to verify the requirements of the selected project before purchasing NFTs.
Where to stake NFTs?
As of December 2021, most NFT staking is enabled through play-and-earn games. MOBOX and Zookeeper are typical examples. Some projects are also developing NFT staking functions on their own platforms, such as Binance Fan Token Platform and Doge Capital.
MOBOX (MBOX)
"MOBOX" is a play-and-earn game metaverse that combines decentralized finance (DeFi) liquidity mining with NFT. It is created on the Binance Smart Chain platform. Users can earn its native cryptocurrency MBOX by staking NFT.
The MOBOX metaverse is called "MOMOverse" and NFT is named "MOMO". MOMO can be minted, earned or purchased through the NFT market. Each MOMO has different properties and comes with randomly generated hash power. By staking a unique MOMO, you can mine the governance token MBOX. The more MOMO you collect, the more MBOX rewards you earn every day.
MOMO NFT can also be used on MOBOX's partner platforms, and NFTs from partner projects can also be used on MOBOX. For example, a user's PancakeSwap avatar NFT can be used directly in MOMOverse without having to unstake it from PancakeSwap. This not only allows users to earn CAKE staking rewards in PancakeSwap team battles, but also allows users to earn MBOX rewards in MOBOX games.
Zookeeper (ZOO)
Zookeeper is a gamified liquidity mining DApp that allows NFTs to be staked in different liquidity pools, each with its own exclusive mascot. All of Zookeeper's liquidity pools support dual mining mechanisms, where users can earn both ZOO utility tokens and WanSwap liquidity provider (WASP) tokens as rewards.
To increase the annual percentage yield (APY) rewards, users can lock their tokens for a period of time, up to 180 days. In addition, staking "ZooBooster" NFTs can maximize rewards and shorten the lock-up period of WSLP. The NFT card ZooBooster can be obtained by purchasing gold treasure chests in the DApp or staking ZOO tokens.
NFT PowerStation for Binance Fan Token Platform
Binance is the first cryptocurrency exchange to offer NFT staking services. Token holders can stake their favorite team’s support NFTs on the Binance Fan Token platform to earn additional Binance Fan Token rewards. Binance Fan Tokens are utility tokens issued by major sports clubs.
Sports fans who hold Binance Fan Tokens gain access to club-specific benefits, such as exclusive discounts on tickets and limited-edition merchandise, as well as voting and decision-making rights on club matters that are only available to token holders.
NFT PowerStation is an innovative gamification feature of the Binance Fan Token Platform. Fans can stake their NFTs to the corresponding team’s NFT PowerStation to support their fandom and receive additional Binance Fan Token rewards. The longer fans stake their NFTs, the higher the fan rewards they will receive.
To learn more about staking NFTs on the Binance Fan Token platform to earn rewards, read this guide.
Summarize
Participants can earn extra income simply by staking their idle NFT collections. Moreover, staking gives NFT unprecedented use cases. It may be too early to say, but we can foresee that NFT staking will also bring new opportunities, not only for NFT collectors, but also for the entire earn-while-playing gaming industry and other fields powered by blockchain technology.
Disclaimer: This article is for educational purposes only. Binance is not affiliated with or endorses these projects. The information provided through the Binance platform does not constitute investment or trading advice or recommendations. Binance is not responsible for any of your investment decisions. Please seek professional advice before taking financial risks.