Unless you have being living under a rock, you have probably heard all the commotion going around about NFTs.
I would say we all have at least one person in our lives who are involved with NFTs in one way or the other. Let’s just say when money talks, people follow.
NFTs have become a popular way to make money online and is the reason for them becoming increasingly popular by everyone around the globe. However, to understand how exactly people make money with NFTs, we must first understand what exactly NFTs are.
What are NFTs?
NFTs is short for non-fungible tokens. This is a form of digital asset or digital art bought, sold, traded to earn a profit for its owners. These tokens exist on the blockchain and can be bought and sold through marketplaces.
NFTs can be based on just about anything. If you’re an artist, you can turn your physical artwork into NFTs. This can be any type of artwork like a painting, a record label, a blueprint of a house, and so much more.
Read more about NFTs in our guide here.
Let’s dive into making money with NFTs.
How to Make Money with NFTs
NFTs have rapidly taken over the world in this past year. With several firms and investors entering this industry, they have found several different ways you can earn money out of it.
Here are our top picks for making money in the NFT industry the right way.
1. Sell Your Own NFTs
The most basic way to earn money through NFTs is to create and sell them yourself. Make your own line of non-fungible tokens from literally anything. The world is your oyster.
Have you recently made an artwork? Create and sell it into an NFT! Have you recently made a digital product? Turn it into an NFT!
If your NFTs get popular, you can make a truckload of money selling them as they would be in high demand.
Several popular platforms are available to you if you’re willing to sell NFTs to a larger audience. They might not be free, but they’re worth it.
2. Rent Your NFTs
Not many people know this, but you can rent out your NFTs too!
Is your NFT a limited edition collector’s item in high demand? Why don’t you rent it out to several people for a considerable price to get back ten times what you’d make if you would’ve sold it?
Most people rent out their NFTs with blockchain-based games. This could be a particular item in the game that is only available for a limited time. Users would pay to borrow this item, and it would be available to them until their time runs out.
3. NFT Trading
The buying and selling of NFTs have become quite a lucrative business model this past year.
We all know at least one person who has tried NFT trading. However, you should know that this isn’t an easy task. One wrong move could do you more harm than good.
The key to successfully trading digital assets or NFTs is knowing the right time to buy and sell a certain NFT.
To know when this is possible, you need to consider several factors, including the demand and supply of that NFT at a certain period in time.
4. Hold NFTs
The process of holding NFTs is also commonly known as HODLing in the NFT community. This stands for Holding On for Dear Life, where you invest in an NFT and wait for the price to go up.
The way this works is that an investor buys an NFT as an investment and keeps it in their possession for an extended period of time in hopes that it’ll increase in value.
If this investment does increase in value quite significantly, the investor can then sell it and make quite a decent profit from it. Most people who are making money with NFTs are using this method to do so as it isn’t rocket science and doesn’t even take much work to do.
5. Flipping NFTs
Flipping NFTs is also a great way to make money in this industry. It follows the same strategy as holding an NFT, where you buy it at a lower price and sell it when it is at a higher price to make a profit.
The only difference is that flipping NFTs occurs in a much shorter time frame.
This is why flipping is commonly done on NFTs that are already pretty unstable, as they’ve got a much higher chance of increasing in value almost immediately. It is also widely done on NFTs that are in high demand and have a vast watch list.
6. Minting NFTs
Minting is another excellent way to make money with your NFTs. Bear with us for a bit since this process is a bit technical.
Minting refers to when you are the first owner of the NFT and the first to “mint” it from a collection. When a new collection of NFTs go live, people race to be the first to purchase in hopes of making a profit.
If a new project is in high demand and a lot of people are wanting to get in on the action, then you’re most likely going to turn a profit.
You can then make money out of these NFTs by selling them on popular marketplaces using the process we discussed a while ago. Though you should know that the competition is intense, bring in your best assets!
7. Staking NFTs
Most people have probably heard about staking cryptos, but not many know that you can also stake NFTs. It follows the same concept where you lock your NFT on a DeFi platform or Proof-of-Stake (PoS) blockchains.
The benefit of locking your NFT on these platforms is that you’ll be able to earn a certain amount of monetary reward in return regularly. In other words, it runs similar to a savings bank account where you’d be earning a certain interest regularly.
8. NFT Gaming
The NFT gaming industry is huge and continues to grow significantly every day. Play to Earn (P2E) games are especially popular where you can win different rewards like NFTs if you complete various missions and tasks within the game.
You can then use these rewards you earned to trade them for NFTs, which you can sell later on, or you can use the NFTs you won to directly sell them on any popular marketplace.
We predict that gaming industry will soon be the most significant player in the NFT world so it’s best to get in early!
9. NFT Royalties
Royalties are a great way to earn a passive income through an NFT that you would have already sold on the marketplace.
The way this works is that for every new person that gets handed your NFT, you can choose to receive a certain amount of royalty from them.
If you set your royalty at 5% and your NFT gets traded 50 times, you would get 5% royalty from all 50 people who would have purchased your NFT through the trade deal.
This ensures that your work is valued even if you do not sell it directly anymore. Once set, royalties are automatically enforced, so you do not waste time convincing buyers to pay it.
Invest in NFT Organizations
A great way to indirectly make money with NFTs is investing in a company involved with NFTs instead of the NFT itself.
Do you know of a potential company that has a popular NFT marketplace? Or a company that is doing well by selling their NFTs? Look them up on the stock (or crypto) market and consider investing in their business model!
This is a pretty safe investment strategy considering that the NFT market is snowballing every day, so if a company involved with NFTs is doing well, chances are that buying their stocks may make you a significant income in the long run.
The Future of NFTs
NFTs have entirely changed the way brands and organizations market themselves and sell their merchandise to their supporters. The world is going virtual, and gone are the days when you had to own a physical asset to make money.
Artists have entirely changed the way they sell their artwork to their customers. Soon we will see almost every industry benefitting the same way from stepping foot into the world of NFTs. Making your base in this world is crucial before it gets too diluted with people.
If you have reached this far, I’d say you’re well versed in how to make money with NFTs. We’ve talked about every method under the sun, so you’ll find at least one way that works best for your earning strategy.
We would like to make it known that investing in a non-fungible tokens is no joke and should be done with the utmost precaution and knowledge.
Properly study the market sentiment and analyze supply and demand before deciding to enter the NFT space as either an investor or trader.
You should also remember that overdoing it could end up doing more harm than good.
Always only invest with funds that you won’t miss if you lose. The last thing we want is for you to be unable to pay rent because you bit off more than you could chew.