@theresaleen
How do NFT staking and yield farming work?
NFT staking allows users to lock their NFTs in a protocol in exchange for rewards, similar to cryptocurrency staking. This provides passive income while retaining ownership of the asset. Some platforms distribute governance tokens, interest, or additional NFTs as rewards. Yield farming involves providing liquidity in NFT-based DeFi projects, often earning returns in the form of tokens. These methods incentivize holding NFTs instead of selling them, creating additional utility beyond collectibles. However, staking and yield farming carry risks, including smart contract vulnerabilities and market fluctuations.
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