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NFT staking, like token staking, describes locking up NFTs on a DeFi network. Without having to transfer ownership of their NFTs, stakers receive passive income in the form of staking rewards in exchange for locking their NFTs. Even though NFT staking platform development is still in its very early stages, it duplicates the ideas behind DeFi yield farming, which experienced a huge surge in 2020 and 2021. Also, developing an NFT staking platform from scratch as a business model can take months. To reduce the time to market and enter the market quickly, Oodles has built a hub of ready-to-launch NFT solutions, including an NFT staking platform architecture. It saves months of development efforts and enables quick launch with minimal customizations. It is not a white-label solution that doesn’t have provisions for source code ownership transfer and customization capabilities.
What is NFT Staking?
By using NFT staking, holders of NFTs can create passive income while keeping full control of their NFTs by locking up their NFT assets on trading platforms.
A user stakes their non-fungible token (such as digital artwork, an item from a video game, or another non-fungible token) on a blockchain system that uses Proof-of-Stake for a predetermined amount of time. The platform where the NFT was staked determines the incentives or other advantages (such as the protocol's native tokens, governance rights, airdrops, or other NFTs) that the user would receive in return.
The annual interest rate, the total number of NFTs you have put up, and the length of the staking period are the most frequent variables that affect the size of those rewards.
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Reasons to Develop an NFT Staking Platform
The most enticing aspect of NFT staking for users is that it enables them to profit passively from their digital assets without exerting much effort or losing control over their NFT.
Additionally, it is possible to increase an NFT's value and scarcity over time by staking it. This is because an NFT's value is often determined by demand. Therefore, your token cannot be sold if it is locked on a staking platform. As a result, if it cannot be sold, its price may increase due to an increase in demand.
Another important point is how NFT staking opens the door for more generalized liquidity. More participants that stake their digital assets will increase the ecosystem's overall liquidity.
Finally, by staking NFTs, people and organizations show that they support a particular project, aid in its growth, and contribute to the development of its community. This improves engagement and increases interest in NFTs as a result.
Businesses have the chance to add extra liquidity to their projects and open up new revenue streams thanks to NFT staking, which enables them to stay afloat and increase user engagement.
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Types of Staking Rewards to Offer in an NFT Staking Platform
The NFT staking website or protocol offers three ways to reward users.
Incentives
The protocol can be designed by the NFT staking platform development company to reward users with native protocol tokens.
Airdrops
With frequent native token airdrops or additional token airdrops, the protocol can reward NFT stakeholders.
Additional Rewards
Rewards such as governance rights or first-mover advantages in some IDOs, IGOs, IEOs, and more.
Some NFT staking platforms might have DAOs, which would provide NFT stakeholders access to additional benefits including voting, governance, and general DAO advantages. Some NFT platforms will let NFT investors re-stake the tokens they've already earned, allowing them to increase their compound profits.
Also, Read | Most Resourceful Blockchains for NFT Development
Elements to Consider for NFT Staking Platform Development
Annual Staking Yield for NFTs, or APY
The passive income gained through staking the NFT is based on the annual passive yield. In general, rarity plays a significant impact on APYs, and these rates frequently change. An NFT staker will therefore always favor placing a bet on a protocol that guarantees high-interest rates. Although the high rates may seem highly alluring, the proprietors of NFT staking platforms must ensure that the APYs are practical and manageable over the long term.
If a user stakes numerous NFTs or stakes NFTs with a high rarity, the protocol may also be set up to enhance APY rewards.2) Staking of NFT and Protocol tokens
Some NFT staking systems only permit NFT staking when the user combines it with protocol tokens.
An Integrated Lending Solution
Players can thus pay a price to rent out the NFTs staked in the protocol. The NFT stakeholder community receives some of this revenue thanks to the protocol.
Period of Stake Lockup
Users can stake NFTs for an indefinite lockup period according to various protocols.
Others, on the other hand, can limit the lockup time and demand that users re-stake to continue receiving rewards.
Limits on Stake Size
This sort of NFT staking procedure restricts the number of NFTs a user can stake or increases the minimum rarity needed to stake an NFT.
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Is NFT Staking Platform Development a Smart Idea?
For individual NFT collectors or metaverse-powered gaming, where staking has proven popular with gamers, firms eager to stay ahead of the curve can think about creating their own NFT staking service. Additionally, you can do research and develop an NFT staking platform for different industries. These might involve esports, education, and other things.
There are undoubtedly many crucial factors to consider, thus it makes sense to contact a group of knowledgeable NFT developers who will handle the complete staking platform production cycle.
Also, Read | Social Media NFT Marketplace Development Guide
Conclusion
One of the best NFT use cases is the development of an NFT staking platform. It allows NFT holders to earn more cash from their possessions and collections without having to sell them.
Although NFT staking is still in its infancy, it will almost probably continue to gain pace. It is already catching the attention of several additional organizations and individuals. In addition to this, we still need to learn about a lot more advanced NFT staking solutions. We need to explore ideas that will provide holders of these tokens access to a myriad of exciting opportunities.
If you are eager to develop your own NFT staking platform, reach out to our Oodles' blockchain developers for help. We deliver effective NFT development services that enable you to race ahead in the competition in the NFT industry.
