May 1, 2022
NELO Explains: NFT Staking
"While everyone was trying to figure out what NFTs were, you had one song on repeat", Spotify Wrapped 2021.
Unfortunately, in 2021, while we were all excited to find out which songs have made it to our personal 'Spotify Wrapped' playlist, you would have noticed the numerous buzzwords they used to encapsulate the year thus far. One of it being 'NFTs' which stands for Non- Fungible Tokens, the digital collectible asset that grew significantly in popularity towards the end of the year. According to Google, it has made it onto the list of most popular searches in 2021. "By the end of the year nearly $41 billion had been spent on NFTs" according to the latest data featured in the Financial Times. (Murphy & Oliver, 2021) It could have been the first time you have heard of it or the very first time, regardless of that we would like to keep you updated on everything blockchain and decided to publish this in depth article for our community. Incase you're a seasoned crypto enthusiast or a newbie having just joined the space!
What is an NFT?
Breaking it down, 'Non-Fungible' means that it is a something that is irreplaceable and unique. Whereas, 'token' refers to the a keepsake, an emblem or a representation. Together they make up a non-interchangeable unit of data stored in a digital ledger, which can be purchased and sold or tampered with.
How does an NFT work?
It has been used to tokenise and represent ownership of unique items, these items include: drawings, music, fashion/luxury goods, gaming items, tickets, real estate and more. The difference between them and fungible items is that fungible items can be exchanged depending on their value rather than being determined by any particular properties. To illustrate, ETH (cryptocurrency) and dollars are fungible, as 1ETH / $1 can be exchanged for things of the same value. This has an analogous effect to trading cards in a way.
So! What is NFT Staking?
Just one of the ways you may earn passive income in the crypto world, NFT staking is the process of locking up your non-fungible token(s) on a platform or protocol to receive rewards as well as other privileges. With this method, holders are allowed to earn income while maintaining ownership of their collection. Do take note that the rewards you receive for locking up NFTs on a platform will vary according to their annual percentage yield (APY), the length of their staking period, and the number of NFTs locked up.
The emergence of NFTs has proved confusing to those outside the technology space who are unable to grasp the concept of digital assets. Some investors view the token's artwork and community buzz as sufficient to provide the NFT with an intrinsic value, but for others, non-fungible tokens lack utility. A staking structure for NFTs offers them a novel way to monetize their assets. Which provides token holders with ongoing benefits as the mere act of owning a token has now become an ongoing, rewarding investment. This is likely to attract the attention of traditional financial institutions in the future. Staking rewards from NFTs are not only much higher than those from traditional investments, but they are also significantly more flexible.
How can I start staking my NFTs?
To get started, you will need a cryptocurrency wallet that supports NFTs. Unfortunately, not all NFTs are eligible for staked rewards. Various projects have different requirements, so before purchasing the NFTs, it is recommended to verify with the project you are interested in. Depending on how the smart contract is written, many projects may enable you to continue using your NFTs during the lock-up period.
Where can I stake my Neloverse NFTs?
Visit nft.nelo.network to start staking now! And if you're new to the NELO NFT space, stay tuned for a step by step tutorial on how to stake your NFT cards for our upcoming game, Neloverse!
The simplicity of NFTs makes it possible for collectors to earn additional passive income while holding their collections. NFT staking has opened up new possibilities for NFTs that we expect will continue to grow as the technology and the market evolve. Although it is still too early to predict how the future will unfold for NFTs, it is likely that staking opportunities will increase. In addition to the recent trend, the number of projects offering stake opportunities is still relatively small, although many of the upcoming projects include this concept in their roadmaps. The blockchain-based technology can be utilized within the Play-to-Earn gaming industry as well as other related sectors, like the Neloverse.
About NELO (NSC):
NELO is a protocol and framework for building & connecting Ethereum-compatible blockchain networks, overcoming the limitations of Ethereum blockchain networks.
Speed, security, and scalability, are the priorities and principles of NELO. If this is what you are looking for, then you are at the right place.