In this article, I Will cover the How to Stake NFTs on Polygon, a blockchain network that is both high-speed and cost-efficient.
Staking NFTs provides you with passive rewards without actually selling your NFTs.
I will walk you through the essential tips, the entire procedure, and the pre-conditions to make sure that you stake your NFTs safely and earn the most on the Polygon network.
What is NFTs Staking ?
NFT staking involves committing non-fungible tokens (NFTs) on a blockchain network to garner rewards just like staking with cryptocurrencies. Holders of NFTs may opt to stake their digital assets instead of selling them on a marketplace.
The stakeholders can receive benefits such as tokens, extra NFTs, or other rewards. This creates passive earnings, but the user still holds onto their assets.
But as with everything, NFT staking has its cons which include smart contract weaknesses, limited liquidity, and volatility of the market. It is very important to select a reliable staking platform to mitigate risk and remain safe while staking.
How to Stake NFTs on Polygon Step by Step
For instance, let’s see how you can stake NFTs on Polygon with the use of the NFTX platform.
Browse NFTX Platform
- Head over to NFTX platform by typing in NFTX on your browser of choice.
Link Your Wallet
Link your MetaMask wallet to NFTX.
Make sure that your wallet has the required amount of ETH or MATIC.
Pick an NFT Collection
Go to the “Vaults” category of the NFTX platform.
Select the stake-able NFT collection (i.e CryptoPunks, Bored Ape Yacht Club).
Send In Your NFTs
Click on the ‘Deposit’ button for the respective NFT collection you wish to stake.
From the selected stake-able NFT collection, pick the NFTs from your wallet and confirm the deposit.
Get vTokens
After the transaction is confirmed, you will receive vTokens which represents your staked NFTs.
The vTokens received can be utilized for several DeFi options in the Polygon network.
Collect Rewards From staking And Earn vTokens
Check your staking rewards using the NFTX dashboard.
When you stake your NFTs, you’ll receive rewards in the form of cryptocurrency (I.e MATIC).
Important Aspects of NFTX Platform
Easy To Use Software: Accessible to all users no matter their prior experience with the platform or even cryptocurrency as a whole.
Transaction Security: High standard security measures put in place to protect your assets.
Broader Usage: Enables access to diverse NFT collections and DeFi apps on the Polygon ecosystem.
Risks and Considerations
Losing Money in Staking NFTs
The rewards that can be earned through staking and the NFT in question can lose value depending on how volatile the market is. Always expect some level of damage should the value of your NFTs fall while being staked.
Security Issues With Platforms
Most exchanges do not have effective security measures in place. Always ensure to use a platform that has strong security features, as were always at risk of losing the NFTs we stake through hacks.
Restricted Access
Certain staking platforms require holding NFTs for a period of time at a useful stake. This reduces your ability to utilize the NFTs and sell them, posing a liquidity issue.
Exploitable Smart Contracts
A certain amount of trust is needed when dealing with dapps which use smart contracts to conduct self fulfilling agreements. Since smart contracts are not entirely bug free, there is also a chance of contending with unexpected blows.
Sensitivity From Changes In Policies
Make safe assumptions with respect to regulatory policies around NFTs and staking. The codes given towards these policies can alter the ways in which staking of NFTs can presented.
Trustworthiness of Staking Platform
The staking limits can be staked from any reliable site, but should be approached with caution. A comprehensive check regarding the site’s history, its ratings, and user reviews needs to be undertaken to make an informed decision.
Liquidity Risks
Compared to unstaked NFTs, Staked NFTs will undoubtedly prove to be less liquid. Withdrawal of utilities that stem from those NFTs becomes difficult and time consuming when it comes to trading or selling.
Different Staking Incentives
Depending on the NFT collection or the platform, the rewards from NFT staking can differ greatly. Do make sure to check up on the reward systems and the possible ways in which returns can be attained.
Delegated Control and Ownership
When staking an NFT, there’s ownership delegation or ownership of said NFTs. Make sure that you understand the accompanying terms and are happy with such terms and conditions.
Requirements for Staking NFTs on Polygon
Compatible NFT
Check that the NFT you are going to use is on the Polygon blockchain and is supported by the staking service.
Polygon Wallet
Web3 wallet such as Trust Wallet or MetaMask that supports Polygon (MATIC).
MATIC Tokens
Required to pay for the gas fees when making the stake deposit or when claiming rewards.
Staking Platform
A trusted site that allows NFT staking on Polygon.
Smart Contract Approval
Provide the necessary permissions to the NFT staking contract.
Network Connectivity
A decent internet connection to make seamless transactions.
Pros & Cons
Pros:
Make Money While You Sleep – Earn tokens, or other assets by staking your NFTs.
Lower Fees – Gas fees are much cheaper than Ethereum Polygon.
Good For The Environment – Uses Proof-of-stake (PoS) technology that saves energy.
Increased Engagement – Staking adds utility that increases value in NFT projects.
Quick Transactions – Staking and claiming rewards are way faster with Polygon’s network.
Cons:
Smart Contract Vulnerability – Staking contracts have loopholes that make it easy to lose assets.
Liquidity Risk – Reselling staked NFTs is not easy because they remain locked.
Volatility – Prices of NFTs and reward tokens are very unpredictable.
Mistrust Worward – Unreliable staking platforms can disappear overnight.
Imbalanced Loss – Profits decrease due to losing value on NFTs while staking.
Final Tip: Don’t forget to research the platforms before staking your NFTs, opt for secure wallets, and keep an eye on the market.
Conclusion
While staking NFTs on polygon can earn passive rewards, it needs serious crypto consideration.
Stakes can be maximized while assets are protected if reputable platforms are selected, wallets are secured, and risks are scoped out. Always paying attention to market conditions and smart contracts security can lead to getting the very best out of one’s NFT staking.
