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It's said that you can do NFT staking where you earn passive income.

My question seems to be very simple: Let's take one of the NFT staking pltform as an example, where I can stake my NFT and get tokenA as a reward. What's the incentive for that NFT staking platform to help me earn passive income ?

In terms of staking on POS, DPOS chains, it's simple. you help the network and you validate the transactions and you get reward from newly born ETH or whatever currenty POS is running on. but in terms of NFT staking, I am lost.

I'd appreciate the answer as I really couldn't find the answer on this.

2 Answers 2

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If the NFT staking is provided by the same entity that sold you the NFT then here is what is happening:

  • They are preventing you from selling your NFT because they also want to sell the rest of their own NFTs. Effectively this is a lock-up period. Maybe this is a form of market price manipulation.
  • This is especially true if the product was first for sale with a discount and then the price increased over time.

If the NFT staking is provided by another entity that is not related to the entity that sold you the NFT then:

  • The staking entity is lying to you and they are being paid by the entity that sold you the original NFT. They are doing this because they want to manipulate the price for the product.

Ignore/reevaluate what I said above if there is any actual game functionality connected to that staking. Or if there is any actual benefit to owning the NFT for a limited period of time (like using it to get into a party, or using it for breeding, etc.)

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  • Happy new year @William .. 1) You say this: They are preventing you from selling your NFT because they also want to sell the rest of their own NFTs. . Let's say all the NFT's from collection has been sold out(minted all of them). Then, what's the gain for staking platform to offer NFT staking in such case ? Any good/solid example ? Commented Dec 31, 2021 at 18:29
  • 2) Let's say NFT staking platform is connected to games. What would be the use case for platform then ? One thing is by staking NFT, one gets x amount of $Token and then what ? this $Token can be used to do stuff on the game ? is this the only use-case ? Commented Dec 31, 2021 at 18:30
  • The staking is still probably because somebody wants to manipulate the price. A rational person that does not want to manipulate the price would not set up staking. Commented Jan 1, 2022 at 15:26
  • If you have a specific gaming application, please provide full details and open a new question. Or bring it up during my Community Service Hour twitter.com/fulldecent/status/1475851800322453504 Commented Jan 1, 2022 at 15:26
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It locks up liquidity. It prevents people from selling their NFT cause they think they can get passive income using it. So it gives the NFT a "utility", and lowers dumping/supply.

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  • so it's like an economic stuff. Basically, the platform gives you their own Tokens in exchange for your NFT, so that you don't sell your NFT ? Still doesn't make good sense :( Commented Nov 4, 2021 at 11:08
  • You can think of it as utility/game also. For example some projects allow you to use your staking rewards to vote on community propositions, or to mint further NFTs. So this "expands" the ecosystem and gives the community something to do. Commented Nov 4, 2021 at 14:25
  • I separated the economic and game use cases in my answer Commented Nov 6, 2021 at 23:42

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