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How to Make Money with NFTs: 19 Strategies
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Navigating the rapidly-evolving world of non-fungible tokens (NFTs) can be both exciting and daunting. As this digital frontier expands, innovative strategies emerge for enthusiasts and investors to capitalize on. From holding rare tokens for long-term gains to merging NFTs with cutting-edge technologies like AR and VR, the opportunities are vast. Here are 19 actionable strategies to consider for maximizing your engagement and potential profit in the NFT domain:
9 Ways to Easily Make Money with NFTs
There are more than a few ways to make money with NFTs. Below, we’ll take a look at the nine best ways to earn with money with non-fungible tokens.
1. Mint and Sell Your Own NFTs
To profit from NFTs, consider creating and selling your own, a process termed ‘minting’ (akin to creating a cryptocurrency). While minting is cost-effective, success relies on selecting the right NFT marketplace and effectively marketing your NFT to stand out. Upon a sale, the buyer’s crypto is transferred to your wallet.
2. Trade NFTs
Trading NFTs is akin to stock trading (learn more here). Traders buy undervalued NFTs, anticipating popularity spikes. While many NFTs remain valueless, success lies in promptly identifying trending NFT collections.
3. Rent NFTs to Others
Most NFTs do not serve any purpose. However, some NFTs have a role in games or other niche platforms. This means you can lend your NFT to someone to use in a game or other specialized platform for a fee. This allows another person to use the NFT without having to buy it. These rental agreements are governed by software programs on a blockchain called smart contracts. The payments and return of the NFT happen automatically unless there are bugs in the contract.
4. Play-to-Earn (P2E) NFT Games
Recent years have seen a rise in play-to-earn (P2E) games, where players earn crypto through gameplay. Instead of currency, players earn NFT collectibles, which can be valuable if rare and the game is popular. However, as of 2022, P2E games lag in popularity. If a game loses support or popularity, its associated NFTs may become valueless.
5. Earn from NFT Royalties
At their core, NFTs are pieces of software on a blockchain called smart contracts. It is possible to include code in an NFT smart contract that pays some crypto to the creator every time it gets sold. This is often called royalty. Many NFT marketplaces cap the royalty at 10%. Since royalties are only paid when the NFT changes ownership, they make the most sense for NFTs which will be traded many times.
6. License NFT Collectibles
Some people and organizations have begun to create NFT versions of physical collectible items. These items could be trading cards or other unique physical items. By minting an NFT associated with the physical collectible, you can have a digital asset that can be traded similarly.
However, there is no barrier preventing someone from creating an NFT of the same collectible on a different blockchain or marketplace. In other words, there is no practical way to make your NFT of the collectible item the only NFT of the collectible unless you have the marketing skill to make people believe yours are the only genuine NFTs of the item.
7. Stake NFTs
The concept of crypto staking can be extended to NFTs. By depositing your NFTs in a staking platform, you can earn rewards for the period in which it is staked. NFT staking in August 2022 is still a new concept in defi (decentralized finance), so few platforms allow you to stake NFTs.
As with crypto staking, the staking rewards are usually in the form of the platform’s native token. The value of this token depends on its utility and popularity. Therefore, keep in mind that real rewards from NFT staking can vary widely, even if the stated APY (annual percent yield) is very high.
8. Invest in NFT and NFT-Adjacent Companies
Instead of buying NFTs, you can invest in NFT-related companies. Purchasing stock in these companies lets you benefit if NFTs gain popularity and the company thrives. However, as of August 2022, few such companies exist, with Coinbase being a notable example. Remember, investing in these companies means you’re banking on their management’s competence, not just NFT trends. Even if NFTs surge in popularity, poor company management can diminish your investment.
9. Flip NFTs
Flipping means buying at a low price and later selling at a higher price. Essentially it is a slower version of trading. The same considerations as with trading apply to flipping NFTs. It is difficult to predict the price movement for NFTs, especially ‘art’ NFTs which have no utility.
Even NFTs which have supposed utility, usually for P2E games, still depend for their value on the popularity of the platform on which they are used.
10 Advanced Strategies for Profiting from NFTs
In the bustling world of NFTs, the key to success lies in innovative strategies and informed decision-making. Whether you’re an artist, investor, or enthusiast, navigating this digital terrain requires a blend of creativity and insight. Below are ten actionable approaches to consider, each offering a unique avenue to leverage the opportunities in the NFT ecosystem:
1. Hold valuable NFTs for long-term appreciation
Instead of flipping or trading NFTs in the short-term, consider holding valuable or promising NFTs for a longer period, anticipating their value will increase as the market matures.
2. Collaborate with artists or brands to produce joint NFT projects
Engage in partnerships with artists, developers, or brands to create collaborative NFTs. Shared projects can tap into wider audiences and bring more attention to the NFT.
3. Host virtual NFT art galleries or exhibitions on platforms
Platforms like Decentraland or Cryptovoxels allow you to host virtual NFT art galleries. You can charge for entry or earn by promoting and selling showcased art.
4. Teach through courses or webinars about the NFT space
Offer courses, webinars, or workshops about NFTs. As the market grows, so does the demand for knowledge about creating, buying, and profiting from NFTs.
5. Use valuable NFTs as collateral for
loans on specific platforms
Some platforms are allowing users to use their NFTs as collateral for
6. Develop NFTs that offer real-world utilities
Create NFTs that have a real-world utility, like granting access to a physical event or digital content, premium membership perks, or exclusive experiences.
7. Curate quality NFTs and possibly broker deals for them
With the vast number of NFTs available, there’s a potential role for curators who can identify, promote, and possibly even broker deals for high-quality NFTs.
8. Promote NFT platforms with affiliate or referral programs
Some NFT platforms offer affiliate or referral programs where you can earn a commission by referring new buyers or sellers.
9. Release limited edition NFTs
Limited edition NFTs, especially those that are part of a series or collection, can create a sense of scarcity and drive demand.
10. Integrate NFTs with emerging AR and VR technologies
As augmented reality (AR) and virtual reality (VR) technologies become more prevalent, integrating NFTs into these experiences could provide new opportunities for monetization.
Frequently Asked Questions (FAQ)
What Are NFTs and How Can They Be Used to Make Money?
NFTs, or Non-Fungible Tokens, are unique digital assets verified using blockchain technology. They can be used to make money through creation and sale, investing in NFT projects, or trading them on various platforms.
How Do I Start Creating and Selling NFTs?
To start creating and selling NFTs, first, create digital artwork or acquire unique digital content. Then choose a blockchain platform like Ethereum, create a digital wallet, mint your NFTs, and list them on NFT marketplaces.
What Should I Consider When Investing in NFTs?
When investing in NFTs, consider the uniqueness and rarity of the NFT, the reputation of the creator, the potential for future value, and the overall market trends. It’s important to research and understand the risks involved.
Can I Earn Royalties from NFTs?
Yes, many NFTs are programmed to pay royalties to the original creator each time the NFT is sold on a secondary market. This percentage is typically set during the minting process.
How Do NFT Marketplaces Work?
NFT marketplaces are platforms where NFTs are bought, sold, and traded. These platforms require users to have a digital wallet and often use cryptocurrency for transactions. Popular marketplaces include OpenSea, Rarible, and Foundation.
Is It Possible to Lose Money with NFTs?
Yes, like any investment, there is a risk of losing money with NFTs. The market can be volatile, and values can fluctuate based on demand, trends, and the overall crypto market.
How Do I Choose the Right NFT to Invest In?
Choosing the right NFT to invest in requires research. Look for NFTs with a solid backing, a clear use case, potential for future demand, and consider the artist’s or project’s track record and community support.
What Are the Risks of Trading NFTs?
The risks of trading NFTs include market volatility, liquidity issues, potential for scams or fraud, and changes in regulatory landscapes. It’s important to trade cautiously and stay informed.
Can I Create NFTs Without Being an Artist?
Yes, you can create NFTs without being a traditional artist. NFTs can represent various digital assets like music, videos, digital collectibles, and more. Creativity and uniqueness are key.
How Does Blockchain Technology Relate to NFTs?
Blockchain technology underpins NFTs by providing a decentralized and secure ledger that records ownership and authenticity of each NFT, ensuring their uniqueness and non-fungibility.
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There are several options for how to make money with NFTs. The simplest is to create and sell NFTs, but millions of nearly identical NFTs already on the market, so you need to market your NFTs to create demand. Most of the ways of making money with NFTs rely on the popularity of the NFT among crypto fans, or of the platform on which the NFT is used. If you are not already well versed in crypto and social media marketing, do not try to make money with NFTs. Your chances of success are extremely low.