Crypto has been around for quite a while now, even though it has only really gained widespread attention in the last couple years or so. And as blockchain technology continues evolving investors, are scrambling to find ways of making money off of it.
When it comes to investing in crypto, being active - you know, checking the market, comparing charts, following specific projects/ coins, trying not to be fazed by the wild market swings - is the most popular approach. But let’s face it, not all of us are up for trading our hard-earned money for an anxiety-inducing experience, which is what dealing with crypto can feel like most of the time. It’s also possible to opt for a passive income strategy and take the safer route.
There are several ways of going about it:
- Staking your crypto assets to support a blockchain network and confirm transactions, which will see you earning, in some cases, more than 10% or 20% per year.
- Find up-and-coming projects and become an early investor, getting a reward if the project takes off.
- Investing in NFTs, which opens up many avenues for both active and passive income.
- Trying yield farming, which involves lending your crypto assets for interest to DeFi platforms, where they are locked in liquidity pools. You're paid an interest proportional to your asset's shares of the liquidity pool.
Today, we will be focusing specifically on how to earn passive income from NFT coins in 2022 and make your investments work for you (even while you’re asleep).
What Are NFT Coins
NFTs have been all the rage lately. From the art enthusiasts and celebrities to the professional investors and those who’re just curious, everyone has been trying to get a piece of the action it seems. Before we get to the most investable NFT coins, it makes sense understanding what exactly are NFTs - and how do they relate to NFT coins.
Simply put, NFTs or non-fungible tokens, are digital assets that are unique, authentic and non-interchangeable. Thanks to the blockchain technology upon which they rely, NFTs also represent ownership rights to both physical and virtual items. The majority of NFTs reside on the Ethereum blockchain, but they can also be minted (or created) with the help of other blockchain such as Solana. These tokens have been most commonly associated with art, collectibles, music and sports.
Recently, the surge in the interest for NFTs have also been given a boost due to their connection to the metaverse. Metaverse real estate in particular has been drawing headlines for the multi-million dollar deals in platforms like Decentraland and the Sandbox.
But the craze hardly stops there. There are plenty of other stories of creators selling their NFTs for eye-watering price tags , including children turning millionaires overnight. And the NFT market shows no signs of slowing down with the global market volume of the tokens surging by 200% when compared to the same period last year, to over $50 billion.
Now back to the subject at hand - what are NFT coins? Pro-tip: They shouldn’t be confused with NFTs.
NFT coins are a form of cryptocurrency that is used to support NFT-based ecosystems. In most blockchain-based platforms you'll find native NFTs. For example, Axie Infinity (we'll get to it in a second), you’ll find the native coin AXS, that is used for NFT staking and decision-making (voting) processes, which are important to maintain the health of the game’s economy. The same goes for our very own SENSO, which is Sensorium Galaxy’s in-platform currency. SENSO is used for all transactions within the metaverse, but it has many other use cases, including enabling a DAO. We’ve detailed it all in our whitepaper.
What makes NFT coins different from NFTs, then? Easy. Unlike NFTs, NFT coins can be exchanged for another NFT of the same value. This is why they can also be a valuable investment tool - and, of course, as a way of generating passive income.
Best Coins For Passive Income
In addition to making money off NFTs the “traditional way” (i.e. minting, selling, setting up NFT royalties for example), these tokens can also be put to work in a different way. Here are the best NFT coins that will let you generate passive income:
When it comes to play-to-earn games, there’s one to rule them all - Axie Infinity. This hugely popular NFT project sees little creatures, Axies, battling each other while users can try their luck at breeding rare kinds of Axies. Some have been worth as much as one million dollars in the past. Within the game, AXS is used as a native governance token. More importantly, if you’re looking to earn some passive income from the game, what you should be looking at is AXS staking as you can earn rewards for locking up your tokens. In other words, this system works like an interest-bearing savings account, but for crypto. In return for staking your coins, if you choose to do so, you’ll earn interest over the period your NFT coins are staked for.
Axie Infinity (AXS) is valued at a price of $44.38 and $2.7B million market cap as of 18 April 2022.
The metaverse-like platform Decentraland has seen its popularity surge massively in the last year, thanks to the sale of its virtual reality plots, the most expensive of which was valued at $3.5 million not that long ago). With so much hype surrounding it, it’s only natural that Decentraland’s native currency, MANA, would also reach new heights.
MANA is used by players for a wide range of activities, including purchasing new land, incentivizing infrastructure growth, customizing avatars, buying wearables, and more marketplace transactions. Decentraland is already seeing a surge in investor interest that is likely to continue as both users and brands try to carve out an early presence on the metaverse.
Decentraland (MANA) is valued at a price of $2.08 and $3.8B market cap as of 18 April 2022.
Like Decentraland, there are several ways of making a passive income in the Sandbox. Many users, for example, can earn rewards in return for letting others use their land. Others rent out spaces for business, entertainment or advertising purposes. But there are many other ways of making money on the platform. Usually, players can collect the Sandbox’s Ethereum crypto token - SAND - by selling their creations (like games and a wide variety of content) in the marketplace, completing tasks, renting land, etc.
SAND is not only used for value transfers, this crypto coin is also relevant for its staking feature, which will allow you to earn passive income. Users who stake their SAND tokens are also able to assist with the platform’s governance.
The Sandbox (SAND) is valued at a price of $2.75 and $3.1B million market cap as of 18 April 2022.
GALA is the native token of Gala Games, a blockchain-based platform where users can create different types of games (in the form of NFTs), while giving them complete control over their assets. Gala games describes itself as the “largest decentralized network of gamers in the world” and has more than 1.3 million users per month. The GALA coin is not only to trade assets, purchase upgrades and other in-game assets, it is also used as a governance token.
A feature that has attracted many users looking to earn passive income from NFTs has been the Gala Games Founder’s Nodes, which are a way of helping future projects within the platform’s ecosystem. Before you consider this option, we suggest you do some research.
Gala Games (GALA) is valued at a price of $0.19 and $1.3B market cap as of 18 April 2022.
ENJ is the native cryptocurrency of gaming company Enjin, which describes itself as the “largest gaming community platform online” with over 250,000 gaming communities and 18.7 million registered gamers. ENJ can be earned through gameplay and besides being used to buy and sell digital goods, users can also earn ENJ rewards in return for participating in online games and other activities promoted within the platform.
Similarly to other platforms, you can earn interest on your ENJ balance by staking it in a supported wallet.
Enjin (ENJ) is valued at a price of $1.46 and $1.2 billion market cap as of 18 April 2022.
THETA is the native cryptocurrency of video-streaming blockchain network Theta, whose funding has come from the likes of Samsung and Sony. THETA can be staked by users who wish to become Validator or Guardian nodes. In return, you can earn TFUEL as a reward. While Theta is used for governance purposes, TFUEL is for transactions, like when users pay Edge Nodes for sharing a video stream.
The Theta Network has seen an incredible growth as more online content creators seek ways of having greater control over their videos (and how they’re consumed and monetized), but also with developers who can use the network to build decentralized applications for all kinds of purposes, including crowdfunding and royalty distribution.
THETA is valued at a price of $3.04 and $3.04B market cap as of 18 April 2022.
Polygon's MATIC is not a gaming token like most of the other coins listed so far, but this chain has been making ambitious forays into the metaverse, and yes, blockchain gaming projects.
Polygon is a “layer two” or “sidechain” scaling solution that runs alongside the Ethereum blockchain - and MATIC is the network’s native cryptocurrency, which is used for fees, staking, governance and more.
As more companies continue integrating Polygon into their products (Adobe, for example, recently announced that it will be tapping the chain for Behance), we can expect MATIC to become an increasingly more interesting option for a passive income opportunity.
MATIC is valued at a price of $1.42 and $11B market cap as of 18 April 2022.
How To Buy NFT Coins
Most NFTs are built on the Ethereum blockchain, which means they are purchased using ether (ETH), one of the most popular cryptocurrencies alongside Bitcoin. Ether can be converted from U.S. dollars on exchanges like Coinbase, Kraken and Gemini.
NFT owners will already be familiar with the process of buying these tokens. If you’re not, we put together a quick intro to NFT investing.
The process for purchasing NFT coins is very much similar:
Step 1: Open a digital wallet/ Exchange account
Set up a virtual wallet, where you will be keeping your cryptocurrency. There are many platforms to choose from, but MetaMask is a great tool to get you started. In alternative, you can choose to open a wallet directly with a crypto exchange like Binance or Coinbase.
Generally speaking, it’s not advisable that you store your assets on an exchange unless you're an active crypto trader as there have been several hacks targeting these kinds of platforms in the past.
Step 2: Buy your NFT coins
Depending on your platform of choice, the process of buying NFT coins can differ slightly. Coinbase lets you buy most of the coins we mentioned with funds from your bank account, which makes the whole process very easy for newcomers. If you already have cryptocurrencies in your Coinbase account, you can simply choose to convert one to your NFT coin of choice. If instead you’re using Binance, you can buy an NFT coin like, say, Enjin with Bitcoin or USDT.
Cryptocurrency and NFTs are a new market that remains largely unregulated (for now) and evolves in ways that carry considerable volatility. Even as one of the ways to earn passive income, NFT coins still have some risks attached to them. It’s always prudent to consider your financial objectives, the amount of risk you’re willing to take and make a careful research before making any investments.