NFT Farming: Meaning, Benefits and Platforms

"NFT's are birth certificates for the offspring of creators."

- Dane Scarborough

 

NFT farming is a fantastic new technology that is progressing greatly and expanding quickly, giving traders and holders of NFTs other options outside just buying and selling them. 

 

They can monetize their NFTs by converting them into liquid assets and receiving rewards. In the meanwhile, we can only hope that the hype and attention it is receiving will undoubtedly aid in growing this into a fully developed sector with quick advancements. You will learn more about NFT Farming in this blog.

 

What is NFT Farming?

 

NFT farming refers to any method of generating income using non-fungible tokens. It emerged as a result of the growth of the yield farming industry and a rise in interest in it. Farming includes creating plans, contributing to liquidity pools, disbursing loans, and acquiring and holding a certain kind of digital money. 

 

Additionally, NFT holders can contribute to the creation of new initiatives like games and engage in lucrative gaming-related activities by enhancing their gaming profiles and making use of in-game features for business. The DeFi protocols are the framework in which all of this takes place, and tokens are used as passive revenue.

 

In general, this process is accomplished by a certain kind of activity in decentralized financial services, which in turn adds to a growth in liquidity on DeFi platforms. It is important to draw attention to the traditional and gamified key current trends in NFT farming. Despite having slightly different fundamentals, the former is nonetheless more well-known.

 

The requisites of NFT farming are given below :

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Requisites of NFT farming

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1. A wallet

 

2. A blockchain network to connect the NFTs.

 

3. Depending on the platform used, there should be a certain token in the wallet.

 

With this token staked in a pool, participants can get rewards based on their share of the pool's overall value. The compatible NFTs will become reward-generating vaults when you use a staking portal. You could stake tokens on a rising number of staking portals to farm limited-edition NFTs, which you could then sell on NFT marketplaces.

 

With the use of the tokens, users can create rewards in the form of the token for that specific portal, which can then be used to obtain NFTs.

 

Also Read | Everything you need to know about NFT Wallets

 

 

Features of NFT Yield Farming and NFT Gamified Farming

 

Features of NFT Yield Farming

 

It suggests a sort of investment that yields money by extending credit through smart contracts or by mining liquidity by depositing NFT tokens into a pool (lending). Selling an asset fast and at a profit is what is represented by the term "liquidity." An asset is deemed to be more liquid if it can be sold quickly and easily.
 

Due to the high liquidity of a DeFi platform, both buyers and sellers are interested in the asset. A liquidity pool is considered a smart contract on decentralized exchanges. It serves as a form of token storage that facilitates trade. The money that is blocked on the smart contract account is utilized for trading and various exchange operations. 

 

Accordingly, yield farming is a method that enables you to boost your profit by offering a pool of liquidity with money that other users would trade. Exchanges reward you further in return for this. A project investment of this sort. Simply put, lending entails lending out coins for transient use. 

 

As a result, you lend cryptocurrency to a platform, which will disburse the money and guarantee its return, in exchange for interest. The parties have come to an agreement in relation to the timing and also the sum of the asset that is returned to the lender. So, yield farming with NFT offers you a new way of income without requiring your active participation.

 

Features of Gamified NFT Farming

 

The P2E model has gained a lot of traction among owners of digital assets during the past year. A new phrase for video games where players can earn cryptocurrencies and NFTs through their gameplay is "Play to Earn." Each special token, such as a character, card, item, or feature, is typically unique and has a distinctive value. 

 

To enhance, sell, or trade these NF tokens with other players, the user can gather them based on the rules of a particular game. The user has other options, including the ability to withdraw the money they have earned from these activities, convert it to another currency, utilize it for other endeavors, and much more.

 

It is important to remember that games that utilize NFTs appear in a variety of styles, from simulations to arcades, with any theme and level of sophistication. Players who participate in such projects are frequently rewarded for daily completion of easy chores and tests. Tournaments and bets are another way to restock your wallet.

 

All you need to play P2E games is a smartphone or access to a desktop computer. Purchases of the first non-fungible tokens, such as characters, cards, or other in-game objects, are considered first investments. 

 

Nevertheless, this kind of cryptocurrency income is regarded as rewarding and enjoyable. After all, you have the chance to accomplish things that you know will make you happy while earning some perks that can be converted into actual cash.

 

Also Read | How to Create, Sell, and Buy NFTs by Yourself?

 

Best NFT Farming Platforms

 

Since each NFT farming platform has its own unique characteristics, it is quite difficult to say which one is the best. The most interesting and promising initiatives for 2022 are displayed in the list below.

 

1. Bunicorn.Finance

 

In this game platform, decentralization, blockchain technology, and NFT gamification are all combined. The service's standout feature is a novel method of mining for liquidity. Tokens in the project have a defined lifespan, preventing their immediate disposal after being given assets by the mining pool.

 

The BUNI token is exclusive to Bunicorn. It allows users to receive rewards for wagering and taking part in platform administration. 

 

By receiving a portion of the fees collected on the Bunicorn decentralized exchange, they are able to purchase the tokens. Participating in a role-playing game with a visual style that vaguely resembles the popular Pokemon series is another option to obtain the tokens.

 

2. MOBOX

 

The MOBOX gaming platform has a distinctive infrastructure that unites a variety of games from various genres, as well as the NFT marketplace, yield farming prospects, and much more. 

 

Users can, for example, acquire tokens through gaming, stake them for greater profits, or rent out their NFTs and participate in MOMO mining. The ability to vote on modifications to the platform's functionalities is also available to holders of native tokens.

 

3. Pulsar Farm

 

In this project, you'll also find blockchain gaming integrated into a number of PvP and PvE games, NFTs that take the form of alien pets, and yield farming that lets you earn tokens. The technology really creates two different token types—Gamma Pulsar and Gamma Bounty—both of which may be exchanged or added to liquidity pools. 

 

Players can also earn awards and passive revenue while completing thrilling missions and taking part in entertaining battles by leveling up a character or rising to the top of the scoreboard. A notable feature of the platform is the insurance plan it provides to safeguard players' investments.

 

4. Zookeeper

 

Wanchain is the foundation of the following intriguing and lucrative project. It now uses NFTs and gives its players access to ZOO and WASP tokens. To increase rewards, a liquidity pool can be connected to by Zookeeper's NFTs. 

 

The "zoo" has a huge range of activities. If you have the necessary funds, you can choose a pair, set a blocking period, purchase various goods, and much more. You can also select from various liquidity pools.

 

Also Read | How to Choose Best NFT Platform to Trade

 

 

Benefits of NFT Farming

 

Earning money versus purchasing NFTs is like comparing apples to oranges because the driving forces and mental processes are so unlike. Users who want to earn NFTs can do so by staking assets they already own, so they don't have to spend any of the hard-earned cryptocurrency or fiat they've saved up for it. 

 

This procedure may resemble an interest-bearing savings account in some ways, but rather than earning an APY, you might get a collectible or an utility-based NFT. These NFTs can include works of art, virtual goods, rewards for token owners only, and many other things. 

 

Users now perceive non-fungible tokens using a whole new paradigm as a result of giving out NFTs as rewards rather than selling the product. The benefits of NFT Farming are given below.

 

1. NFT Farming Benefits for Users

 

NFT farming might create a win-win situation for all parties involved since it benefits both project creators and the end users equally. They do so in very different ways, though. Let's start by discussing the advantages that NFT farming offers to token holders and to end users.

 

The advantages of NFT farming for token holders are a lot. Many users keep tokens inactively in their wallets, hoping that their value would rise as the popularity of their particular networks increases. 

 

This is the equivalent of hiding your fiat money under your mattress, where it is unable to assist you in creating any further value. By using NFT farming, you can make your tokens work for you in order to earn rewards rather than letting them sit around doing nothing.

 

As previously stated, these prizes may take many different forms, but they can often fall into one of two major categories: collectible and utility-based NFTs. 

 

These many collectible NFTs, which resemble traditional physical and distinctive trading cards, vary in value based on their provenance and market demand, with some collectibles holding their worth over time. 

 

Imagine, for instance, that Binance allowed users to stake BNB and earn NFTs as soon as BNB was released. The initial NFTs produced by Binance would likely be very collectible and in high demand, which would likely increase their price as the platform expanded.

 

Users can earn utility NFTs in addition to collecting NFTs for collections. These NFTs may take on a variety of shapes, where the main variation depends on what the project's creators want to provide as a reward to its user base. 

 

Through NFT farming, these opportunities have become more accessible to regular users, depending on what NFT farming and NFTs might offer their users. Qualifying for highly coveted IDOs have become extremely exclusive, and this was the case before too. 

 

The value proposition behind these NFTs is pretty evident since users have the opportunity to sell or trade their allotment NFT on the secondary market if they earn it but do not wish to redeem it.

 

2. NFT Farming Benefits for Project Developers

 

There are numerous advantages supplied to project creators that they won't get from more conventional staking techniques. For starters, by offering large payouts to stakers, the project may avoid further depleting the quantity of its tokens. 

 

Projects now have the option to utilize the native tokens that were previously reserved in order to stake rewards for other purposes. However, this option is still available since the native tokens can be packaged into an NFT in order to make them earnable by users.

 

The capacity of the project's developers to bind up the liquidity of its native coins is an important consideration. The tokens cannot be exchanged when they are staked by a user in an NFT farm since they are being used. 

 

This puts projects in a stronger position in terms of token pricing and demand because sell-side pressure may be lessened as long as users are staking to earn NFTs. 

 

The price of a token should supposedly increase if there is consistent demand for it but a reduced supply as a result of circulating tokens being locked up in an NFT farm.

 

Also Read | How to Launch NFT?

 

Users and project developers may not have even been aware they had a problem, but NFT farming offers a creative solution that all parties may take advantage of. 

 

NFTrade is proposing a new approach for the blockchain community to develop and broaden its capabilities by giving tokens more utility in the form of NFT farming capabilities. NFT revenue through NFT farming is only the start, even with a winding down of NFT buying volume from the beginning of 2021.