We’ve all heard of NFTs and their special glory. They’ve changed the way we collect items in such a way that we now have entire platforms built around them.
Some NFTs come with a high price tag like the Cryptopunk catalogue. Ever since the first NFT, Quantum, sold for over a million dollars, people have been scavenging the internet for their own unchangeable pixel sets.
NFTs come in many shapes and sizes, sometimes even colours. They appear on numerous platforms in different formats, but the most popular incarnation are online gaming assets.
There are card games where you collect rare cards that can be sold for cryptocurrency on the game’s blockchain. Variants of adventure games like MIR4 allow you to collect in-game resources and items that can be minted as NFTs and traded as you see fit.
Owning one of the top NFTs is exciting, but for most of us, the journey usually ends here. People often find themselves selling their NFT, swapping it for another rare item, or marveling at the masterfully crafted 1KB image. Now there is a way for NFT owners to make better use of their stuff, and it’s called staking.
How Does NFT Staking Work?
NFT staking allows you to own it while allowing you to earn more with your asset. This is similar to the Liquid Earn program where you can earn rewards for your cryptocurrency instead of NFTs.
A new mechanic in its early stages but has a promising foundation and has already produced results. What you’re doing is putting an NFT on hold either on the native blockchain or on a platform that supports staking to generate returns. Imagine a yielding account, but with a single, one-of-a-kind bill inside.
Another thing about NFTs is that they are sealed with a smart contract (ERC-721). There are mechanisms in the contract that help the token interact with other tokens besides the blockchain they are in. This works with all NFTs, including those you earn from online games. However, when you stake your NFT, it is the contract that does the work and manages your earnings. There is another type of smart contract that symbolizes NFTs which is
ERC-1155. It is said to be more efficient than the ERC-721, but completely ignores the special element of a rare item. If you wholesale your NFTs like Costco and need to move them as fast as possible, the ERC-1155 may be perfect for you. In any other case, stick with 721.
There are several ways to bet on an NFT, but the most common practice is to get returns. If you do it this way, the NFTs you can stake are usually those specific to their blockchain. This means you will earn tokens generated by that blockchain.
For example, you play CryptoBlades, a P2E game, and you get a class A product. If you decide to stake, the CryptoBlades blockchain locks that item and pays you SKILL tokens, the game’s native currency.
The idea is to keep some of the rarest items out of circulation so developers can do more of the same, which brings in more players and generates more revenue. However, some platforms will allow you to use NFT in their games at the same time you stake them.
For NFTs that do not belong to any private blockchain (except Ethereum), you can stake them for verification rights.
Modern cryptocurrencies are shifting towards the Proof of Stake system, where users stake a portion of their own coins to verify transactions on a blockchain and earn rewards. Validators are randomly selected each time a new transaction is created. The more stakes you make, the higher your chances of getting the right to verify that transaction.
NFT Staking Platforms
Here are some of the leading blockchains that support NFT staking. You may have heard of them or even played some of their games.
Onessus
Onessus is a decentralized gaming platform working on NFT rendering. One of its highlights, HodlGod, competes with the community for a piece of iconic Immortal Gear sets. Onessus has a separate solution dedicated to NFT staking called WhenStaking. To earn VOID tokens, a local currency, you can save NFTs acquired in Onessus games here.
KIRA
Built on the Web3 Foundation, the Kira network connects Dapps and provides interoperability across different platforms. You can stake any type of NFT to earn KEX tokens and KEX holders can stake their tokens to earn Kira’s native NFTs. Rent can also split your NFT into smaller chunks and refer to them as individual NFTs.
Splinterlands
This is a crypto trading card game that we suspect will gain more attention with its new NFT staking options. Every card you collect in the game is an NFT and you can stake what you have in a library so other players can borrow and play with them. It is similar to a liquidity pool where you earn passive trading fees.
This game runs on the Hive blockchain with over 120 games for you to play.
Final Words
NFT staking brings a nice touch of what it means to have an invincible group of pixels. But one thing he has to do is build an audience and appeal to it. Right now, it’s hard to say who would really benefit from locking down valuable and one-of-a-kind tokens.
For example, if you have an NFT from the Beeple collection, would you put it on a blockchain to verify transactions? No, you don’t even need to. Or if you have an “Angel” from Axie Infinity worth over $100,000, would you put it in a pool for someone else to use? Probably not.
Smaller NFT holders find no more reason to risk their assets because the returns may be so low that it is more profitable to sell them. Without enough incentive, the whole idea will likely remain just an idea.
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