Before we expand further on this matter, keep in mind that this NFT farming article involves other fintech innovations. If you’re a newbie, don’t get lost if you come across terminologies like DeFi, yield farming, and NFTs in this how does NFT farming works tutorial.
However, if you want to learn more about the terms, you can also read more from the following articles; What is Decentralized Finance (DeFi)? What is Yield Farming? Non-Fungible Tokens. Doing this will help you gain more knowledge for further understanding.
Since the emergence of games commenced online, we have seen a group of players striking these virtual markets by selling in-game currencies for actual money. Of course, this has been frowned upon by developers, but virtual farming gold is becoming a real business opportunity with the rise of blockchain technology and decentralized finance.
Likewise, NFT farming has similarities to yield farming in the DeFi sector. It’s all about active players in a game world, acquiring certain items or in-game currencies that can sell for money and profit.
One example is the Small Love Potion (SLP) from Axie Infinity (AXS). Players need to win battles to earn these SLP tokens, which can be sold on the open market. This produces a certain income that’s high enough for people in certain countries to make a living from it.
NFT farming is a new concept that embraces using NFTs as a stake for value or tokens to stake NFTs. In addition, the NFT merging DeFi offers you the opportunity to earn money by trading your NFT on the network. In summary, NFT farming has more easy rewards or stakes, and it’s compatible with yielding farming.
As a result, this is more liquidity and usefulness for NFTs, which it may or may not have done anything before. Furthermore, this kind of innovation of NFT farming earns money by betting tokens on the future success of an app’s development team.
To use the NFT, you first need to buy rare and unique NFTs. Then, you may change your prizes for new NFTs. Many factors influence which NFTs become earnable, but also what token you are staking. Likewise, the purpose of the project and what you consider the correct return.
NFTs exist on various blockchains, including Ethereum, Polygon, and Binance Smart Chain. Moreover, these digital assets follow standards and can be used in a variety of applications. In short, an NFT is interoperable.
In this case, one digital asset can connect with multiple programs or smart contracts. To start NFT farming, users will require a crypto wallet.
In addition to the crypto wallet, Metamask would advise connecting with the Ethereum blockchain, Polygon, or Binance Smart Chain. In that wallet, they will require a certain token, dependent on the platform. Then, they need to stake this token in a pool. Finally, users earn rewards based on their proportion of the total pool.
Furthermore, a basic idea in this scenario is the staking portal. Likewise, a staking portal is where you can fit NFTs into vaults from which you earn rewards.
A future trend in yield farming and NFT farming is the gamification of the process. Moreover, gamified yield farming or NFT farming adds a video game layer to the operation of yield farming. However, Alien Worlds and Cometh products add a gaming element and sense of game to the concept of yield farming.
On the other hand, the game Axie Infinity is more interactive. In addition to the Axie Infinity, players earn Smooth Love Potion (SLP) tokens to sell for money or create new NFTs. Notably, the new NFTs will be Axies, and players can monetize these creatures in different ways.
Players can use Axies in battles and generate more SLP tokens with real value. Or they create more Axies by breeding. In addition, players can sell their newly created NFT on the marketplace.
On Binance Smart Chain, we see many yield farming platforms that tap into NFTs. Users need to acquire first an NFT with a specific power before starting farming and token. In these cases, NFT works as a yield farming boost. It’s another way of joining NFTs and DeFi.
DeFi is coming to the blockchain gaming space. In fact, this is good news for the pro gaming geeks. Now every gamer can show their gaming skills and collect rewards as NFTs. Then, they can stake certain rewards within the gaming platform to earn yields.
Notably, after art and music, NFT is going to disrupt the gaming industry. Moreover, blockchain-based gaming platforms are now using NFT gamification with yield farming to maximize the rewards for the players and keep them hooked.
Furthermore, we will consider some of the DeFi gaming platforms leveraging NFT gamification with yield farming.
Bunicorn.Finance brings gaming activity to the next level. It is a DeFi gaming platform that makes DeFi and blockchain gaming together. In addition, it is transforming yield farming by leveraging the NFT gamification. Besides, there has been a huge surge in the NFT space.
Therefore, most of the use cases for NFT were just copies of digital contents such as artworks, music, videos, or game items. Meanwhile, Bunicorn has begun a new liquidity mining model where, rather than giving the farming reward directly to the users, these illiquid NFT tokens are bound into NFT collectibles.
To clarify, the variation between the NFT collectibles in Bunicorn and other platforms is that it contains actual time-locked similar to a bond or vesting period. At the same time, this prevents users from dumping their tokens quickly after taking them from the mining pool.
Further, users can convert NFT collectibles into the actual BUNI tokens after the vesting period. In the meantime, users can also trade certain NFT in other marketplaces and make them liquid.
MOBOX capitalized on the growing gaming market to ensure that users enjoy social gaming while earning an income. It is a unique NFT farming platform that features gaming in the DeFi space. In addition, the platform provides an ultimate action by giving them a combination of DeFi, gaming, and NFT.
Furthermore, MOBOX uses a unique infrastructure incorporating NFT, DeFi and gaming, while still giving users access to liquidity pools in farming an NFT. Besides, the platform helps users make the most reliable yield strategies and make unique NFTs used across different games or chains. As a matter of fact, it is based on the Binance Smart Chain (BSC).
Within a week of being started, about $5 million NFTs were traded on the platform. Experienced elite members developed the MOBOX platform with deep experience in gaming and the blockchain dApp industry.
Zookeeper is a yield farming Dapp that is built on the Wanchain. The primary goal of the developers is to develop fun yield farming and profitability. So far, it is possible to farm ZOO and WASP token simultaneously for higher APT rewards.
Apart from dual Farming and high APY, most people like the platform are NFTs which cannot be ignored.
Zookeeper NFTs have been built to be bound to the liquidity pool being formed so that those farming can get more rewards. Users can also lock the liquidity for a specific amount of time to get their target.
Pulsar Farm leads the market as it combines yield farming with gamification while supporting NFTs. Moreover, it is a DeFi game based on the BSC and polygon. Since the launch, it has experienced more than a thousand active wallets with a lock-up of over $7 million in the smart contract.
In addition, there is a Pulse Arena where users can acquire an alien pet as NFTs and participate in a PvP (Player versus Player) game. Notably, to get more wins, you need to level up your pet. Likewise, the rewards you can get depend on your winning streak. Hence, the more you win, the more rewards.
Similarly, the platform has a leaderboard where the top players get extra BNT tokens. For the balance of the game ecosystem, all the profits from the NFT sales are burned. However, the platform has an insurance model to protect the player’s investment.
Furthermore, the Pulsar beta game works to eliminate threats from whales and bots to farm. Therefore, they can access the pre-sale event. In return, take Beta Pulsar tokens for the NFT and limit the risks of price dumping.
NFT Farming allows firms to offer a clear added value and thus gives value to the end-user. When it comes to NFT farming, there are varying results. But the rewards are originally collectibles and utility-based NFTs. Nevertheless, NFT farming may give people the same advantages as projects that don’t provide staking or yield production.
NFT Farming allows users to make money from NFT assets that are only available on the platform. As a result, developers’ ecosystems are strengthened, and, in turn, consumers can gain real value by holding the extra tokens which are not already on the market.
NFT Farming is a unique way of raising your crypto portfolio. But like almost every other phase of blockchain, it has its risks. For example, composability is one of its biggest advantages and disadvantages.
Since NFT platforms are build-up blocks, different blocks could also come tumbling down if one block fails. Smart contract bugs are also a vital risk. Most of this tech is in its initial developing stages. In case of a fault in operation, the results would be catastrophic for crypto traders.
Disclaimer: This material must not be used as the basis for making any investment decisions. This serves only as informative material about NFT. Trading digital assets involve risk and can result in the loss of investment capital. Hence, always make sure to do in-depth research before engaging or investing in any cryptocurrencies.