Ever since NFT rose into global prominence last year, a lot of people and businesses have aped it. The survey confirms that the NFT trading volume rose by 704% between the second and third quarters of 2021.
However, some of these businesses and individuals only bought NFTs for art's sake without making money from it, and even some who currently make money from NFTs only know about flipping.
While you can realize up to 75.7% profit and above by flipping NFTs, there are also a lot of other—and sometimes more profitable—strategies you can implement to earn money from your NFTs.
Even if you don’t own an NFT, do you know you can still make money from the rising NFT market? This short guide will teach you these strategies and how to implement them.
Perhaps you just bought some NFTs and you’re looking for how to make money with them, then you should check out these strategies:
This is the most common method of making money with NFTs because it works similarly to other markets. Flipping or trading NFTs simply means that you buy them at lower prices and sell them when the prices are higher – the difference is your profit.
To get started, you can look for an NFT platform with a relatively high traffic and trading volume. This might include Magic Eden on Solana or OpenSea. Then research and pick out the NFT collections on that platform with solid fundamentals.
Buy one or a couple of NFTs from your selected collection, hold them for some time, and trade it when the price goes higher. Azuki, one of the leading NFT projects, started with a floor price of almost 2 ETH, but the floor price has now increased to 25 ETH.
Therefore, anyone who aped into Azuki at launch can flip at the moment with a profit of 23 ETH, and that is around $75,600.
With royalties, the primary owner of an NFT receives some percentages upon every resale of the collectible. Royalties are often defined in the smart contract of any NFT project.
The percentage to set largely depends on what the NFT creator wants. On NFTify, you can set your royalties to be up to 50%. Therefore, if your NFT was resold for $200, you can get $100 as your royalty.
Of course, your royalty’s value will keep increasing as the floor price of your NFT increases. Meanwhile, royalties automatically upon resale as programmed in the smart contract, so you don’t have to monitor the resales yourself.
Rac, a recording artist, tweeted that he made up to 2.5 ETH—almost $8k—in royalties from a song. Thus, royalties are one of the ways you can generate passive income as an NFT creator.
Staking is a profitable strategy that most NFT holders are not even aware of. Simply put, staking is the process of putting your digital assets in the custody of a protocol for a specified period so you can earn returns.
But before you stake any NFT, you should be aware that not all NFTs can be staked. Hence, the reason you need to research is to know if the project you want to enter can be staked.
If the NFT can be staked, then the next action is to run quick background research of its Annual Percentage Yield (APY) to know the percentage of rewards you’d get per year. Some NFT staking protocols offer up to 80% APY, while some offer more.
If you want to stake NFTs, you can check out Zookeeper, Onessus, Mobox, and other similar platforms.
In the DeFi world, decentralized protocols or Automated Market Makers always want to ensure that tokens are available for their users to buy or trade at will. This is the reason they require entities to contribute to their liquidity pool.
For you to contribute to a liquidity pool, you’d have to lock up two pairs of listed tokens to receive returns that might come in the form of NFTs. For example, you can contribute 500 $USDT and 5 $SOL to the liquidity pool of Uniswap or PancakeSwap.
The moment you contribute these trading pairs, you will be issued Liquidity Provider NFTs. Liquidity Provider NFTs contain details concerning your shares in the pool. But more importantly, you can as well use the LP NFTs to farm new crypto rewards from the AMM.
Instead of your NFT staying in your wallet without bringing you any income, you can consider renting it out in a peer-to-peer agreement. You might want to ask, “Why would anyone want to borrow my NFT?”
Potential borrowers may want to have your NFT for a while so they can have access to the benefits that are peculiar to your NFT. Moreso, since NFT real estate is going mainstream, it is logical that these apartments or landed properties can be rented as NFTs.
Some various protocols and marketplaces are facilitating NFT renting including Mantle, reNFT, NFTfi, and Trava. When you rent out your NFTs on this platform, you'd get crypto tokens as rewards for as long as the duration lasts.
Apart from that, another lucrative means of renting out your NFTs is by creating a gaming guild scholarship where you can lend your game NFT to people and earn returns as they play with them.
NFTs have developed a couple of use cases in modern-day games. Prime among these use cases is how NFTs serve as in-game characters. Once your NFT in-game characters win some tasks, you will be rewarded with some crypto.
Furthermore, you can also use your NFTs to breed more in the game. You can also list your newly bred NFTs on the game’s marketplace for sale. So if you are passionate about making money with NFTs, play NFT games to get more NFTs as rewards and eventually sell them for crypto.
Using Axie Infinity as a case study, you can earn AXS tokens —currently trading at $55—as gaming rewards. In addition, you can use two of your Axies to breed up to seven other ones, and you can sell each of these new breeds if you want.
One of the ways you can make money in the NFT space is by creating NFTs. Bearing in mind that almost everything can be tokenized, then it means that everybody—no matter their skill or discipline—can create NFTs.
You can create NFT as an artist, entertainer, realtor, celebrity, and so on. Moreover, you can also become an NFT domain name provider. There are a lot of stories of people who made huge money by creating and selling NFTs.
Back in February, CNBC told a story of how a 36-year-old who had financial challenges eventually earned almost $109k by creating and selling NFT games. Similarly, an artist also made over $738k from selling NFTs last month.
Having examined the common ways to make money with NFTs above, we will go a step ahead to look at NFT money-making strategies that are still new and are not yet explored well enough:
The interlocking of NFTs with the world of intellectual property rights has been budding a lot of innovative moves. While some NFT projects don’t sell the commercial rights along with the actual NFTs, some do sell off both.
By comparison, most blue-chip NFTs projects often grant their members access to commercial rights. With the commercial rights, the members can sell merch and print the picture of the NFT they own in the collection to it.
Similarly, they can open their businesses with the project’s rename. The possibilities are endless. Having explained that, you—as an owner of any blue-chip NFT—can decide to license out your commercial rights for another person to leverage.
Richard Lee, a member of BAYC, recently licensed his Bored Ape to a cannabis company. When the company put the ape on its products, it became a “bestseller", especially among younger crypto-savvy buyers.
After a few instances of licensing NFT commercial rights, this is becoming a novel way through which holders of blue-chip NFTs are earning huge money with their NFTs. Do you have a blue-chip NFT but don't currently have an idea of what to do with its commercial rights? License it to someone who does and makes some money.
Looking at the way some NFT projects are becoming so profitable, investors are now shifting focus from backing only startups to also funding potentially disruptive NFT projects.
Once these investors draw checks for NFT projects, they own a percentage of their equity according to their agreement. a16z—a renowned tech VC—recently funded an initiative with $30 million to research and invest in high-profile and promising NFT projects.
You can imagine owning a stake in BAYC, De Gods, or World of Women. But before investing in an NFT project (you can find projects on PinkSale, the biggest crypto launchpads) ensure that you have researched its fundamentals and its possibility to the moon.
Perhaps you don’t want to actively get involved in NFTs, investing in NFT projects is a surefire strategy to earn from the space.
While it is true that you can make thousands and millions of dollars from the NFT space, it is equally true that your portfolio might easily get wrecked if you don’t take some caution or avoid some red flags.
These are some pitfalls you should avoid in your quest to earn money from NFTs:
The NFT space is full of both old and new projects that you might find exciting and consider aping to them. As a result, you might believe so much in a project that you would want to risk all your entire capital on it.
There are two options when you do this, it’s either your entire capital brings you massive returns or you get recked to the last dollar. This is where risk management comes in: you should only get into projects with some portions of your portfolio, but not everything to be on the safer side.
If you want to make money from a particular NFT project, then you should be concerned about the integrity of the founders in the NFT space. Knowing the identity of the core team members is crucial in assessing the credibility of any project.
When the entire team behind a project is anonymous, you won't be able to research their track records in the ecosystem. In January, the anonymous Dev behind a project called Frosties sucked the $1.2 million from the project and crashed it. The same thing happened with Doodled Dragons and Evil Ape.
Now, is it the case that you can’t make money from NFT projects with anonymous founders? Not exactly. Even the founders of BAYC started anonymously. However, tread such projects with caution.
This specifically applies to staking and farming NFTs, the platform or AMM will have to promise the user some percentages of APY. However, in the bid to encourage more people to stake, such an NFT platform might go overboard to over-promise.
For example, it is suspicious if an NFT staking platform is promising you 2000% APY. To be double sure, you should ask yourself if such a platform has built a robust enough ecosystem to bring about such high percentage of yield.
So the rule of the thumb is that if the yields are quite too good to be true, then you should think twice before staking or farming on such a platform.
Before you get into a project, you should check them out on major social media platforms, especially Twitter and Discord. If a project is a month old and it already has 50k followers on Twitter but it has low engagement, then you should calculate your steps before jumping into it.
Meanwhile, there are a couple of audit tools to verify the number of real and spot the fake followers following a project. A popular tool is Twitter Audit.
When a project that is not too solid has a relatively high mint price, history has shown that its price action might not do well post-mint because it doesn’t have sufficient appeal to drive more demand.
For example, Rude Kids was launched with a mint price of 0.3 ETH. But the project has now dropped to a floor price of 0.051 ETH.
At the same time, we must point out that “high mint price” is relative. As a result, not all projects with high mint prices can be suspicious. When the project has a reputable team with an innovative vision, a high mint price can be justified.
Using Azuki as a case study, its mint price was comfortably almost 2 ETH, yet it is currently one of the most flourishing NFT projects with a floor price ranging around 25 ETH as of the moment of writing.
Therefore, while a high mint price might in itself arouse suspicion, you should be quite careful once it adds to the pitfalls discussed so far.
Since NFTs are taking over the world, frauds are also listing inauthentic ones for sale. Once you buy these fake NFTs, you should know that it might be impossible for you to flip them since they are not the original arts – thereby dampening your NFT money-making goals.
A fast way of detecting fake NFTs is to carry out a reverse image search on Google to see the original owners. Not long ago, Opensea delisted Phunky Ape Yacht Club NFTs as it was deemed to be a “counterfeit” of Bored Apes.
Apart from that, you should ensure that you are on the right platform where the original NFT collection is being sold; better if it has the verification badge.
Generally, most NFT projects often limit the number of NFTs their member or to-be-member can buy to 5. This is to ensure that the collectibles are evenly distributed and not concentrated in the custody of one person or a few people.
You should think twice before aping into any NFT project with high buying limits. The NFTs in such a collection can be bought by one or more whales who can pump or dump the floor price.
In addition, when the whales have acquired most of the NFTs in the collection, new members cannot get into the community. This will limit the number of members in the community and also inhibit the scalability of the project.
DApp Radar reported earlier this year that the NFT market has a total value locked (TVL) of $178 billion. This figure is increasing every day and the industry is opening up various opportunities for people to make money.
We have discussed key strategies for making money from NFTs above, and you can try out one or a couple of them. But in your bid to implement any of these strategies, do make sure that you carry out proper research before you put your funds into any project.
We have lowered the barrier of entry into NFT by making it simple for you to deploy your own NFT smart contract and sell your NFTs easily.
While some NFT marketplaces only allow you to receive the maximum royalty percentage of 10%, NFTify gives you the power to increase your royalty percentage to up to 50%.
We are here to help you in your journey to earning massive revenues from NFT, why not build your storefront today?
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