Even though NFTs have been a part of both decentralized markets and quite frankly pop culture for a while now some people still don’t get how to make money with them. There are actually multiple ways to earn money through NFTs yet plenty of folks just don’t understand how decentralized markets work enough to really see the full picture. That’s why we’re going to try and simplify this process as best we can. Many of these methods can actually work without you having to create or use an NFT launchpad to mint your NFT and send it out into the market.
The Simple Process Everyone Knows
In truth there are two processes that virtually everyone knows when it comes to trying to earn money from NFTs. You have to create your NFT, mint it, and sell it. The other option is just to be a collector of NFTs. What you’re trying to do in that space is just buy low and sell high. However, these days decentralized marketplaces are offering a multitude of invest options that involve NFTs. For example Solana NFTs allow NFTs to be part of smart contracts. When you combine smart contracts with the concept of crypto derivatives you may be on to something. We’ll explain that here below.
Virtually regardless of what type of business you want to get into that involves NFTs, you’re going to find yourself buying and selling these assets to try and make a profit. Therefore, doing some research on NFT auctions and the different platforms as well as blockchains that allow NFT minting is going to be a must. If not you really don’t fully understand how the market works you’re going to have a very rough time trying to earn a profit.
Lending Through NFTs in Smart Contracts
The concept of NFT lending usually involves an NFT being used as collateral by one of the parties. A common example that we see involves signing a smart contract that’s in essence a traditional loan. The main difference is that there’s an NFT that’s going to be written down as collateral on the loan if the person receiving the funds is unable to pay after a set number of months or days. If you as a lender rack up a few clients that couldn’t pay up on their loans you may be left with quite the NFT collection.
For lenders this idea of using smart contracts is actually quite an advantageous way to lend money. You don’t go to court or anything like that, the smart contract should be executed automatically. As a lender that’s going to make you the proud owner of a new NFT token. As previously mentioned, to be able to then earn money from this type of scheme you’re going to have to sell off the NFT. Hence the importance of understanding how NFT auctions work, and how to get the most out of the assets that you could technically collect. This new way to lend capital really benefits both parties in many ways.