Passive income is the grail of financial independence. We all dream of retiring early and not worrying about money ever again. Passive income is one of the critical factors in achieving financial independence. Luckily, the world has just gotten more friendly towards passive income seekers.
With innovations in fintech and digital assets, it’s easier than ever before to earn passive income through debt financing (DeFi) and non-fungible tokens (NFTs). This article will discuss how you can start earning passive income through DeFi and NFTs today.
1) Staking NFTs for long-term returns
Ever since the advent of blockchain, there have been a plethora of startups trying to move crypto from speculation to usage. In addition, many projects in the crypto space are building platforms to create value for adopters.
As a result, you can create your own NFT and generate passive income through staking these assets. By staking this NFT after the payoff date, it’ll generate interest that pays out every year until you sell your tokens. By doing so, you’re generating extra annual returns.
2) Providing liquidity with NFTs
NFTs have integrated with DeFi and marketplaces to facilitate all trade conducted via NFT whilst, at the same time, earning interest on these NFTs. This means liquidating assets quicker than ever before and earning money.
By having an NFT on the Decentralized Exchange (DEX), even if only one or two investors demand-checking in DeFi, you still stand to earn profit with your investment. This is due to the nature of staking platforms, creating price stabilization around this token.
In a moment where everything declines, your NFT would appreciate it as the platform stabilizes around your token and secures the market price. There being no thresholds to obtain interest also means you’re earning interest every minute.
3) Yield-farming through NFTs
Initially, the Yield-farming strategy was used to generate passive income in DeFi, but it has now entered the NFTs scope with trading fee staking. For example, you pay a fixed amount per day, one token in your NFT, and you get 10% monthly interest. The service provider utilizes your NFT in their ongoing revenue-generating activity, marketing the trading platform among their users, or adding more liquidity to exchanges they trade on.
This way, trades are made on your behalf without any input from you, without any additional cost of gas until the trade is made over your NFT’s network. This activity might be worth a large number of dollars every day; hence it’s often the case despite the low winning chance ratios in getting back a larger amount than what was staked. This mode is one of the most versatile ways to earn crypto passively, yet it’s still pretty new.
4) Deposit crypto in DeFi for an APY
DeFi is simply a decentralized financial infrastructure such as lending platforms and stablecoin providers that let users store their crypto (BTC/ETH) to earn interest. This is one of the best passive income strategies currently floating around the space. APY in DeFi is always on the rise (like LH we have in crypto lending) as more people begin to utilize them due to their consistent payouts and cheap crypto storage costs compared to most crypto ERC20/Ethereum Wallet providers out there.
It is one of the safest cryptocurrency investment strategies currently available because they charge fees when depositing while a portion goes towards market operation fees and building their product such as Lightning Network nodes, healthcare insurance using Dether Oracles and even exchange services using Open Finance Protocols. They are at a low rate compared to any other least deposit interest settings by traditional bank standards.
In conclusion, investing in DeFi and NFT platforms is the best decision since they are constantly growing markets and should be fruitful to earn a passive income. These markets will continue to rise and at higher peaks as time goes by and more ICOs jump on the transparency game, with some generating over $1 billion in revenue.
However, investing in these platforms might be suitable for those considering high direct exposure to cryptocurrencies and high initial investment risks. Therefore, it’s wise to see stable liquid Dex Platforms are currently delivering the best ROI and experiencing the largest amounts of market stability.