Ledger, the world leader in critical digital asset security and use, shared 4 ways to generate passive income with NFTs.
NFT staking: “Staking allows to gain rewards that can increase the portfolio while leaving control of digital assets to the individual. By placing NFTs as collateral on a blockchain network or liquidity pool, it is necessary to lock them up for the minimum period known as the staking period. With this method, the network processes transactions quickly and increases the security of the network. Thus, in exchange for the transaction, staking rewards in crypto tokens are received. The rarer the NFTs, the higher the staking rewards. These tokens can be exchanged and traded to convert revenues into preferred assets. But it is not possible to move or sell NFTs while they are staked.”
NFT lease: “Leasing platforms, the newest passive income stream method available to NFT owners, help determine the lease fees and lease term for NFTs. The whole process is then managed and controlled by smart contracts that terminate the lease at the specified time and return the NFTs to the wallet. By renting NFTs, the probability of earning passive income and the player winning the game increases. Games like “Play to Earn” can be given as examples of games aimed at making money. Renting an NFT is one of the beneficial ways in which both parties benefit, both for the user and the player.”
Earn returns from elsewhere with NFT liquidity: “NFT liquidity pools allow to leverage value without selling NFTs. The advantage of this method is to be able to earn passive income by using the same value on other platforms while maintaining the same collection. NFTs are deposited into one of the vaults on the platform and in return the platform's native vToken (ERC20) is received, which is the base price of the NFT collection. Rewards can then be earned by depositing these vTokens into DEX liquidity pools such as Balancer and Uniswap. vTokens are returned when the profit is earned. An NFT can then be retrieved from the same collection for a small fee.”
Earning royalties: “Another way to earn passive income through NFTs is to earn royalties. This method, which has some differences, provides income from the digital artworks created even if they belong to others. After the digital artwork is created, it is necessary to mint the NFT. Minting is the process of making the artwork part of the blockchain as an NFT. To do this, it is necessary to program the technical details and royalties by creating an internal smart contract. After this process, royalties are automatically charged each time NFT is sold. The most common royalties, which range from 5 percent to 10 percent, are usually paid when an NFT is sold. For example, if the NFT is sold for a thousand dollars and the royalty fee is 5 percent, the royalty payment is 50 dollars, this applies every time the token is sold.”