• Sat. Sep 30th, 2023



What is NFT staying and how it works?


Jan 25, 2023

What is NFT staying and how it works?

Steering of non-replaceable tokens is actually not such, since NFT holders do not do useful work to achieve consensus in the blockchain based on the Proof-OF-Stake algorithm.

NFT staying is a financial operation, namely, receiving a reward from developers of a separate decentralized application for the use or blocking of tokens in it. Thus, NFT staying is more likely to encourage users and an additional incentive for owners of digital items.

NFT staying is similar to the model of profitable farming in the decentralized finance sector (Defi), where users receive cryptocurrencies for the supply of liquidity to the pools or other activity.

Not every non-replaceable token can be added to staining-most often only certain objects are brought in the framework of a separate blockchain game or some other application.

In the field of Gamefi, mechanics of stakeing and obtaining awards for various actions are most common, which is not surprising, because most decentralized games https://gagarin.news/news/what-are-tokenized-stocks-and-how-do-they-differ-from-traditional/ work according to the “Play” model (Play-to-Earn).

What is NFT staying?

The user must place his NFT in the general “storage” (pool) NFTX for stakeing, after which he will be able to receive regular payments of the so -called VTOKENS. Their source is the commissions collected by the “repository” for operations with NFT stored in it. Each pool has its own separate token.

If the owner of an unexplored token, blocking it in the “storage”, also adds Ethereum (ETH) coins to the pool, then the size of the award paid increases several times.

The advantages and disadvantages of stakeing NFT

It is not difficult to understand how to add digital items to stake. However, obtaining awards is usually associated with intra-game mechanics, therefore, for greater efficiency, we recommend that you understand the economy and gameplay of a particular blockchain game.

The obvious advantage of the NFT stake is the additional value of the digital subject due to the possibility of obtaining passive income. Tokens received as a reward also often have useful functions, for example, voting on proposals in the TAO project.

On the other hand, when NFT is in stakeing, it can significantly grow or fall in price, but the user will not be able to sell it due to temporary blocking. In addition, placing NFT worth a few dozen or even hundreds of thousands of dollars in a third-party smart contract, and not in a personal wallet, the user exposes his assets additional risk.

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