How do NFTs generate income
1. Direct Sales
One of the simplest ways that NFT developers can generate income is by selling their creations directly to collectors. This can be done through various platforms, including NFT marketplaces like OpenSea and Rarible.
For example, the artist Beeple sold his first NFT, “Everydays: The First 5000 Days,” for over $69 million in 2021. This was a groundbreaking sale that helped to establish the potential of NFTs as a form of high-value digital art.
Another example is the creator of the popular CryptoKitties game, Axiom Zen, who sold their entire collection of unique cats for over $14 million in 2021. This sale highlighted the potential of NFTs as a form of gaming collectibles that can be bought and sold like traditional assets.
1. Renting Out Assets
Another way that NFT developers can generate income is by renting out their assets to others for various purposes. This can include use in games, virtual reality experiences, or even as decorative items in digital spaces.
For example, the artist Kevin McCoy created an NFT-powered game called “Kevin McCoy’s Quantum,” which allows users to collect and trade virtual art pieces. The game has generated significant revenue for McCoy through renting out his assets to players.
1. Licensing and Royalties
NFT developers can also generate income by licensing their creations to other companies or individuals. This can include use in advertising, merchandising, or even as part of a larger product line.
For example, the clothing brand Balenciaga collaborated with the artist Beeple to create a limited-edition collection of NFT-powered clothing items. The collaboration generated significant revenue for both parties, with Balenciaga selling out their collection within minutes.
1. Staking and Yield Farming
NFT developers can also generate income by staking their assets in various decentralized finance (DeFi) platforms. This involves locking up their NFTs as collateral to earn interest or other rewards.
For example, the NFT marketplace OpenSea offers a staking program that allows users to earn rewards in the form of SUSD, an ERC-20 token. This can be a great way for NFT developers to generate passive income while also providing liquidity to the broader DeFi ecosystem.
1. Secondary Market Sales
Finally, NFT developers can generate income by selling their creations on the secondary market. This involves buying and selling NFTs through various platforms, including OpenSea and Rarible.
For example, the artist Beeple sold several of his NFTs for over $1 million each in 2021. This generated significant revenue for him while also creating a demand for his work on the secondary market.
