In the NFT industry, which suddenly expanded in the 2020s, the NFT market itself is attracting a lot of attention. More and more people are getting their hands on NFT investment, and some of them are staking. It is an investment method that can aim for unearned income.
What is staking?
Staking is a system in which NFTs are deposited on the network for a certain period of time. You can earn rewards by making deposits. Simply put, by depositing money in a bank account, it is a mechanism that allows you to earn profits, so it is a simple way to earn money without knowing technical or analytical methods. Of course, the profit margin is low, about 3%. It is a very friendly investment method even for beginners because you can get profit without losing ownership.
Benefits of staking
The benefits of staking NFTs are as follows.
just leave it
Staking is profitable just by depositing. Therefore, no specific investment method is required. When it comes to virtual currency FX, technical analysis is also required, so experience and skills are required, but staking does not require such knowledge.
Beginners can do it
In the case of general investment, traders need experience and skills, and it is natural that it takes several years to be able to win. Traders take a very long time to become profitable, but in the case of staking, even beginners can take on the challenge because all they have to do is deposit.
higher interest rates than banks
Staking is more profitable than depositing in a bank. Even if you deposit it in a major bank in a developed country, the interest rate is often less than 1%. However, in the case of NFT staking, it is possible to aim for 3% to 5%, so it is a very delicious investment.
Lock period for staking
Staking generally has a lock period. You cannot withdraw staked virtual currency or NFT during the lock period. If there is a big change in this period, there is also a case to make a loss. The lock period depends on the NFT. Some NFTs can be withdrawn immediately, while others have lock periods of months or even a year.
Disadvantages of staking
There are of course possible disadvantages to staking. The biggest disadvantage is the risk that the price of the virtual currency will crash during the lock period. You cannot sell staked cryptocurrencies during the lock period. If there is a big crash in between, you will lose. Determine if it is worth holding for the long term before investing.
In the case of staking, long-term holding is a prerequisite. In the short term, it is not very profitable. Although it is stable because it takes time to obtain a yield, it is not possible to earn a large amount one-off like day trading. It is an investment that is suitable for those who want to operate with low risk, so it is impossible to earn at once.
Gate.io allows you to enter the NFT marketplace and actually do business. To do so, you will need to open an account. If you want to sell your work, open an account. I also introduce it in the following article.