This post was originally published on this site
For creators who are in search of digital assets & passive income.
As a writer, it’s tough to make money, especially in the beginning.
You work nights.
You attempt to write for a what seems like a million different platforms at a time.
You wonder if you will ever be able to earn a living from you work.
You probably will, eventually, if you just stick with it.
In the meantime — if you work a 9–5 and/or have extra cash to invest in Ethereum — why not establish some streams of passive income?
The first thing you’ll need to do is create an NFT. You can learn how to do that here.
Most people just sell their NFTs: They can make a lot of money from doing this once but, honestly, it’s not exactly a long-term, consistent source of passive income.
I was delighted when I learned that you can, indeed, generate passive income from your NFTs in more ways than one!
1. Rent Out NFTs
You can often rent out NFTs for a certain amount of time.
One way you can earn passive income is to rent out your NFTs, particularly those in high demand. For instance, some card trading games allow players to borrow NFT cards to boost their chances of winning. As expected, the terms governing the deal between the two parties involved are governed by smart contracts. Therefore, NFT users usually have the freedom to set their preferred duration of the rental agreement and the lease rate for the NFT.
— Andrey Sergeenkov
This is a nice option, especially if the demand is high.
2. Earn Royalties on Your NFTs
Believe it or not, you can actually earn royalties on NFTs.
The underlying technology powering NFTs allows creators to set terms that impose royalty fees whenever their NFTs change hands on the secondary market. In other words, the creators can receive passive income even after selling their creations to collectors.
With this, they can earn a share of the sales price of the NFTs in question indefinitely. For example, if the royalty for a digital artwork is set at 10%, the original creator will receive 10% of the total sale price each time their artwork is resold to a new owner.
Note that creators often set these predetermined percentages while minting the NFTs. Moreover, smart contracts — self-executing computer programs that enforce contractual agreements — govern the entire process involved in distributing royalties. This means as a creator, you do not need to enforce your royalty terms or track payment manually as the process is fully automated.
— Andrey Sergeenkov
This is a great way to go!
3. Stake NFTs
You can “lock away” your NFTs into a DeFi protocol smart contract in order to generate a yield.
One of the benefits of the marriage between NFTs and decentralized finance (DeFi) protocols is the possibility of staking NFTs. Staking refers to the process of depositing, or “locking away,” digital assets into a DeFi protocol smart contract to generate a yield.
While some platforms support a wide range of NFTs, others require you to purchase native NFTs in order to earn staking token rewards (also usually denominated in the platform’s native utility token.)
— Andrey Sergeen Kov
Amaaazzing!
4. Provide Liquidity to Earn NFTs
Thanks to the ongoing integration of NFTs and DeFi infrastructures, it has become possible to provide liquidity and receive NFTs in return to establish your position in a given liquidity pool.
For example, when you provide liquidity on Uniswap V3, the automated market maker (AMM) will issue an ERC-721 token, also known as LP-NFT, that details your share of the total amount locked in the pool. Other information etched into the NFT is the token pair you deposited, the tokens’ symbols and the pool’s address.
You can sell this NFT to liquidate your position on liquidity pools quickly.
— Andrey Sergeenkov
5. Adopt NFT-Powered Yield Farming
Because NFTs are fast becoming a core component of AMMs, users can now farm for yields using NFT-powered products. Yield farming refers to the method of leveraging multiple DeFi protocols in order to generate the highest possible yield with the digital assets you have.
— Andrey Sergeenkov
As a writer, passive income honestly sounds like a luxury to me right now, but it’s important to study the various investing strategies people use and weigh the pros and cons of specific assets, because doing so could provide you with more flexibility when it comes to your finances in the future!