NFT farming builds off the concept of token staking and liquidity farming, with users staking native tokens to earn an additional yield through an NFT-based reward. Unlike traditional staking, which pays out the reward in the natively staked token, through NFT farming, users can obtain much rarer and distinctive yield generating assets. These earnable NFTs can vary greatly depending on the token being staked, the use case behind the project, and what the native development teams deems as the proper reward to be made earnable.
For projects that do not offer a form of staking or yield generation, which are many, NFT farming provides an obvious value generation event that provides additional value to the end user. The rewards for NFT farming vary, but are mainly separated into two categories, collectible NFTs and utility-based NFTs.
Collectible NFTs can range from digital art, gaming items, or a rare and numbered asset, with the exclusivity of the NFT at least partially driving aspects of its appeal and value. With the NFTrade farming platform, the NFTs available on the platform will be 100% exclusive, meaning that the only way to earn them is through token staking and NFT farming within our platform. For example, if you play a blockchain-based game, a collectible NFT reward could be an exclusive in-game item, character, or usable asset, which can then be equipped, sold, or swapped to recognize its inherent value. This creates a more liquid option for NFT farmers who want to see tangible profits from their staking endeavors.
The second class of farmable NFT rewards are utility-based NFT tokens, which, when held, provide exclusive benefits to the asset holder. The possibilities available within utility-based NFTs are almost endless, and will continue to expand in complexity and value as more projects begin to understand the value propositions that NFTs can present to token holders. Some basic examples of utility-focused NFTs are redeemable NFTs that allow early platform access to a new application, a discount on transaction fees for a native platform, the ability to opt-in for a higher reward tier, and many others.
With NFT farming, projects benefit by having additional tokens locked up and off the market, strengthening their ecosystem, and users benefit by earning tangible value through the availability of exclusive NFT assets.