Many people buy non-fungible tokens, or NFTs, with the hope of selling them at a higher price in the near future. While some NFT owners don’t wish to sell their treasured possessions it doesn’t mean that they cannot still benefit from them.
There is a level of risk involved in investing in any market. Price appreciation is not guaranteed, and long-term holding of idle assets can result in significant opportunity costs. NFTs are no exception because their fair value due to their highly speculative nature is not known.
NFTs are among the most abstract assets ever created and traded. A “COVID Alien NFT” sold recently for more than $10 million. It’s possible that other buyers might not be willing to pay that much for such an item. NFTs are often viewed as absurd by many people. It can be difficult (or impossible) to give them a monetary value.
There are strategies investors can use to start earning steady returns on their DeFi or NFT assets.
Profit from your NFTs by participating in yield farming
Experienced investors will know that art and collectible markets have a greater liquidity deficit than traditional equity and gold markets. This liquidity crisis is more prevalent in the NFT space which is still in its infancy.
Matching serious buyers with honest sellers, lenders or borrowers can take a while. NFT holders who lack the liquidity to make the best deals might not find the best deal. They could end up selling their collectibles at very low prices if they are in urgent need of money.
Drops Crypto allows NFT owners to make capital by using their NFTs for collateral. It offers attractive options to users that will allow them to leverage their assets to obtain loans or participate in yield farming opportunities.
It allows users to create NFT vaults, where funds borrowed against DeFi assets and NFT assets are sent directly to a yield-farming strategy. This will enable yield farming with NFTs.
To earn a significant yield, you can lower the opportunity cost to hold governance tokens or liquidity tokens. You can also use the NFTs to secure trustless loans. Drops’ lending platform is powered by non-permissionless NFT lending pools. You can also earn competitive APYs by using your “idle” assets to generate returns.
Have you ever thought about renting your NFTs out?
It is a promising trend to rent out non-fungible tokens in return for a fee. NFTs can be borrowed for a fraction the price of buying them. They may want to show it off or just want to experience the joy of owning a valuable possession for a brief time.
You can make passive income as an owner by renting your NFTs. Yiedl Finance lets its users rent their NFTs to make rental income. NFT owners have the ability to set the rental price, NFT price (which can be subjective) and maximum rental period. Anyone who wishes to borrow your NFT must also deposit the NFT price as collateral and the rental fee for the requested lease period.
NFT owners don’t have to worry about fraud or theft because the borrower used the NFT value as collateral. The collateral is released to the borrower if they return it on time.
Earning with both hands
This is a more appropriate option for investors who have a solid understanding of crypto market and investor behavior. This is how it works: Use your NFT as collateral to borrow cryptocurrency that you have determined has huge upside potential. To make passive income, stake the cryptocurrency (so why keep it idle?). While you wait for the price to rise, stake the cryptocurrency.
Staking will give you staking rewards and also allow you to benefit from price appreciation. Staking is the act of using your cryptocurrency to verify transactions and take part in other network activities.
Wrap it up
NFT is still in its infancy. It would be common for people to want to monetize NFTs that they have bought for large sums of money. Waiting for the prices of NFTs to appreciate may prove futile. Drops Crypto, Yiedl Finance and other platforms are offering new ways to make money using DeFi assets and NFTs.
Disclaimer: This article is intended for informational purposes only. This article is not intended to be used for legal, tax, financial, investment, or any other advice.