What is NFT Farming? Generate Value Holding NFTs

Introduction to NFT Yield Farming

The world of NFTs (Non-fungible Tokens) is all about strategically paving your way to rewards. NFT Farming is one strategic on-chain activity that helps us to win big! It is a modern and emerging concept that is widely being practiced. Essentially, NFT farming involves staking tokens for rewards, in some cases using a gamified experience. It can also be to win an NFT as a reward. To keep your NFT game going, one needs to get a good grip on NFT farming. After all, NFTs and Blockchain are the future.

Here, we will learn more about NFT farming. We will grasp the gist of this concept and see how it works. 

What is NFT Farming?

Basically, the idea behind NFT farming is to use NFTs with an aim to create more value for the NFTs you buy and hold. For this, one needs to use an active platform to participate in this activity. Moreover, it’s common that a gaming platform is used for farming these assets. The concept also brings Defi (Decentralized Finance) into play, enablings you to trade your NFTs over a network to earn rewards. 

Therefore, we can also refer NFT farming to as a gamified way of securing and staking NFTs for rewards. 

Now, many might confuse NFT farming with yield farming in cryptocurrency. It is somewhat similar to that. Cryptocurrency yield farming generally refers to staking your cryptocurrencies for direct monetary rewards either using decentralized finance platforms or centralized platforms, like Celsius Network or Hodlnaut. Let us tell you more about NFT farming next.

How Farming and Yield Farming are interrelated?

NFT farming is an evolved form of yield farming in cryptocurrency. Some creative developers coined this term after combing NFTs and yield farming. It was bound to happen because the world of NFTs and crypto are so fast-paced and interlinked as well. That is how NFT farming became a new way to make money in Defi markets. Brady Dale referred to the interconnection as “The inevitable marriage of NFTs and yield farming.” 

Although these concepts are interlinked and similar, yet there is a slight difference. Let us shed light on that. In conventional yield farming, you actually deposit some digital assets into a liquidity pool to get token rewards. In NFT farming, you simply use NFTs (Non-Fungible Tokens) instead.  

How can holding NFTs be beneficial? 

The core idea behind farming yield and NFT holdings is to create liquidity and utility for NFTs. Due to NFT farming, NFTs can now be deployed for earning tokens. This way, the utility and liquidity of NFTs have largely increased. Before that, an NFT was just considered an exclusive digital collectible for buying and trading. 

Now, let us see how NFT farming works. 

How does NFT Farming work?

We will put it the easiest way for you! 

We know that NFTs exist on certain Blockchain platforms such as Ethereum, Binance, and Polygon. All these NFTs comply to set standards and can have several applications. Moreover, they are interoperable. That means they can connect with other systems, smart contracts, or programs. 

To start, you need to have a crypto wallet such as Meta Mask connected with Blockchain. Your wallet needs to have a certain kind of token depending on the platform. Further, you need to stake that token into a pool. Then users can earn rewards depending on their percentage of the total. 

Another emerging trend is to inculcate a gamified platform for NFT farming. It is just about adding a gamification phase using a video game to yield farming. This makes the process more interactive, interesting, and more happening. 

Yield farming and holding NFTs are great ways to boost your crypto and NFT portfolio. However, please know that there are risks involved as well. Because the entire technology behind it is still in developmental stages. That is why one needs to take a very calculated and informed approach to maximizing crypto earnings. 

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