NFT Flipping: How to Earn Money - Guide for Beginners
Are you interested in finding out more about NFTnft flipping? With the rise of digital collectibles and Non-Fungible Tokens (NFTs), so too has come the concept of flipping. It’s understandable why many crypto traders are drawn to this activity. NFT flipping can lead to amazing gains, especially if you know what you're doing and make smart decisions. But before you rush ahead, it's important to understand the basics of how NFT flipping works—and that is exactly what we’re going to tackle today!
What is NFT Flipping?
Flipping is a term for buying goods at low prices and selling them quickly for a profit. It has always existed - since the days of trading collectible cards, toys and comics in limited editions for profit, and it eventually made its way to NFT. As you may have guessed, the essence of NFT flipping is to buy them at low prices and quickly resell them at a higher price. I'll go into more detail about this process later, but for now a little personal backstory.
- Flipping is a term for buying goods at low prices and selling them quickly for a profit. It has always existed, but made its way to NFTs (non-fungible tokens)
- The process of flipping an NFT is to buy it at a low price and resell it when the price goes up
- To get started, there are platforms like Magic Eden or OpenSea that offer collections of valuable investments
- Azuki, one of the leading NTF projects, had a minimum price increase from 2 ETH to 25 ETH
- Buying and selling domain names is also possible with NTfs—for example, someone recently bought picaroons.eth for $10,000
- Before flipping an NFT project, research should be done on whether there will be demand for the NTfs being sold as well as what others think about the project in order to get an idea of future value
NFT flipping vs Trading
Flipping NFTs is a common way of profiting on NFT. In the same way other markets work, you buy when prices are low and sell when they're high. The difference is how much you can profit.
To get started, there are a number of platforms you can use, with Magic Eden and OpenSea being two of the more popular ones. Once you get on the platform, investigate collections with valuable investments and high traffic.
Buy one or a pair of NFTs from your chosen collection, hold them for a while and trade them when the price goes up. Azuki, one of the leading NFT projects, started with a minimum price of almost 2 ETH, but now the minimum price has increased to 25 ETH. So anyone who invested in Azuki at the start can now flip for a profit of 23 ETH, which is about $75,600.
Apart from that, you can also trade domain names. A couple of days ago, someone bought and sold an NFT domain -picaroons.eth- for $10,000 within four days.
How to flip the NFT?
Before the flip, the project has to be analysed to see if it is worth it. That is, a re-survey should be carried out.
We have to :
- Understand whether there will be demand for NFTs
- Find out what others think about the project
- Follow the announcements
Next, we look at the market:
- Watch the volume, the top collections gain hundreds of SOL volume in a short time (if the project is on solan).
- Keeping track of sales is very important. Dozens, many dozens of sales per minute is what we need.
- Follow the project's Twitter and Discord, for example we can see the project's negativity on Discord
- Forget about FOMO
- Don't panic if the project isn't scrambled
- Always have a plan for everything in life
Other ways to make money from NFT
GET ROYALTY FROM YOUR NFT
With royalties, you will receive a percentage each time your item is resold. This percentage is often defined in the smart contract of any NFT project
The percentage of the royalty you want will largely depend on who the creator is. On some websites, you are able to set a royalty of up to 50%, which means if your NFT was resold for $200, then you may receive $100 as a royalty.
Of course, the value of your royalty will increase as the minimum price of your NFT increases. Meanwhile, royalties are automatically accrued on resale, as programmed in the smart contract, so you don't have to keep track of resale yourself.
Rack, a recording artist, tweeted that he earns up to 2.5 ETH - almost $8k - in royalties per song. Thus, royalties are one way of earning passive income as an NFT creator.
Staking is a lucrative strategy that most NFT holders are not even aware of. All you need to do is put your digital assets into the custody of a protocol for some set amount of time so that you can generate income.
But before you bet on any NFT, you should know that not all NFTs can be bet on. Consequently, you need to do your research to find out if it is possible to bet on the project you want to enter.
If you can bet on an NFT, the next action is to do a quick research on its annual percentage yield (APY) to find out the percentage of the reward you will receive per year. Some NFT betting protocols offer up to 80% APY and some offer more.
If you want to bet on NFT, you can check out Zookeeper, Onessus, Mobox and other similar platforms.
Contribute to the Liquidity Pool And Earn NFTs
In the DeFi world, decentralized protocols or automated market makers always want to ensure that tokens are available to their users so that they can buy or trade them as they see fit. It is for this reason that they require actors to contribute to the system by adding some of their assets.
In order to contribute to a liquidity pool, you will have to lock in two pairs of quoted tokens in order to receive the income that can come in the form of NFT. For example, you can contribute $500USDT and $5SOL to the Uniswap or PancakeSwap liquidity pool.
The moment you deposit these trading pairs, you will be given Liquidity Provider NFTs. Liquidity Provider NFTs contain detailed information about your shares in the pool. But more importantly, you can also use LP NFTs to receive new cryptocurrency rewards from AMM.
Rather than keep your NFTs in your wallet and not earn any money from them, you may choose to rent them out under a peer-to-peer agreement. You may be wondering, "Why would someone want to borrow my NFTs?"
There are currently so many investments and savings opportunities available for the public, it's difficult to know what to choose. But a few novel investment vehicles might be worth considering- like NFTs. Potential borrowers may want to borrow your NFT for some time in order to have access to the benefits inherent in your NFT. Moreover, as NFT-based properties become increasingly Several different protocols and marketplaces facilitate NFT rentals, including Mantle, reNFT, NFTfi and Trava. When you rent out your NFTs on this platform, you receive cryptocurrency tokens as remuneration for the duration of the lease.
Also, another lucrative way to rent out your NFTs is to create a gaming guild scholarship, where you can lend your gaming NFTs to people and make a profit while they play with them.
Play NFT Games
NFTs have found a lot of uses in modern games and the main one is their ability to become active game characters. There are a few ways you can earn cryptocurrency with your NFTs, for example when they win some tasks.
If you enjoy generating money with NFTs, you can play games that reward you with them as well. You can then sell your NFTs for crypto coins on the market.
Axie Infinity is an example of a game that rewards you for playing with AXS tokens which, at the moment, are trading at $23. You can also use two Axies to create up to seven new breeds and then trade these if you want.
NFTs are still a nascent asset class. One way to generate revenues in any crypto sector is by creating new crypto tokens. This can be done by anyone and doesn't require any particular skills or special expertise.
You can create NFTs as an artist, an artist, a realtor, a celebrity and so on. Moreover, you can also become an NFT domain name provider. There are many stories of people who have made huge money from creating and selling NFTs.
LICENSING OF INTELLECTUAL PROPERTY RIGHTS OF YOUR NTF
NFTs create the opportunity to get rewards for both lending them and buying them. Some NFTs don't come with commercial rights at all, but some do provide both.
By comparison, most blue-chip NFT projects often give their members access to commercial rights. With commercial rights, members can sell merchandise and print NFT images they own in collections to them.
Similarly, they can start their own business using a renamed project. The possibilities are endless. Having explained this, you, as the owner of any NFT blue chip, can decide to license your commercial rights for use by another person.
Richard Lee, a member of the BAYC, recently licensed his 'Bored Monkey' to a cannabis company. When the company put the monkey on its products, it became a 'bestseller', especially among young cryptocurrency buyers.
After several cases of licensing commercial rights to NFTs, this is emerging as a new way for blue chip NFT owners to make huge amounts of money from their NFTs. Do you have a blue-chip NFT but don't know what to do with its commercial rights? Pass it on under licence to someone who does, and make some money.
Iinvesting in NFT Projects
A lot of emerging NFT projects are being funded instead of just start-ups which is a big shift in the investor community. A few have even become extremely profitable so financiers are turning their attention to supporting disruptive NFT projects.
Once these investors write cheques for NFT projects, they become owners of an equity stake in them under the agreement. a16z, a well-known technology venture capital fund, recently financed a $30 million initiative to research and invest in well-known and promising NFT projects.
You might imagine owning a stake in BAYC, De Gods or World of Women. But before you invest in an NFT project (you can find projects on PinkSale, the largest cryptocurrency marketplace), make sure you've studied its fundamentals and capabilities to the moon.
You may not want to be actively involved in NFT, investing in NFT projects is a surefire strategy for earning money from the space.
The Pitfalls of NFT
While it is true that you can make thousands and millions of dollars in the NFT space, it is equally true that your portfolio can easily collapse if you are not careful or avoid certain red flags.
Here are some pitfalls you should avoid in your quest to make money from NFT:
Investing all Money in NFTs
The NFT space is full of both old and new projects that you might find interesting and you might consider trying on them. As a result, you may believe in the project so much that you want to risk all of your capital.
In this case there are two possibilities: either your entire capital will bring you huge profits, or you will be left short to the last dollar. This is where risk management comes to the rescue: you should only participate in some parts of your portfolio, but not all, in order to be on the safer side.
If you want to make money from a certain NFT project, you should be concerned about the integrity of the founders in the NFT space. Checking out their identities and backgrounds is one way to find out who they really are and what they stand for.
When the full team behind a project is anonymous, it becomes difficult to examine their track record. In January, the anonymous developer behind a project called Frosties caused $1.2 million worth of damage to it and ruined it completely.
What do you think about projects with anonymous founders? It's tough to say because even the BAYC team started as nameless. Just be careful when investing any money into them.
Earnings that too good to be true
In order for an NFT betting or farming platform to attract a large number of people, they will often offer rates that are higher than what is realistic.
Always be cautious when you come across a platform promising 2000% APY. Have they really set up their ecosystem to thrive in different market conditions and provide such a high interest rate?
So the saying goes: if it sounds too good to be true, you should stay away.
Fake Social Media Followers
Before joining a project, you should check it out on the major social media platforms, especially Twitter and Discord. If the project is one month old and already has 50,000 followers on Twitter but low engagement, you should calculate your steps before getting involved.
Meanwhile, there are several auditing tools to check the number of real and identify fake followers of a project. A popular tool is Twitter Audit.
High Minting Price
When not-so-solid projects have relatively high minting prices, history shows the price may not be good after the initial sale since it lacks enough appeal to stimulate demand
For example, the Rude Kids project was launched with a price of 0.3 ETH. But now this minimum priced has been lowered to 0.051 ETH
At the same time, we should note that "high mincing price" is a relative concept. Therefore, not all projects with high prices can be suspicious. If a project has a reputable team with an innovative vision, a high mint price can be justified. Using Azuki as an example, its mint price was comfortably almost 2 ETH, but it is now one of the most thriving NFT projects with a minimum price of around 25 ETH at the time of writing.
NFTs are not Supplied
As NFTs are taking over the world, fraudsters are also putting non-genuine NFTs up for sale. When you buy these fake NFTs, you should know that it will be impossible to turn them over as they are not original works of art - so your goals of making money from NFTs will be defeated.
A quick way to spot fake NFTs is to do a reverse Google image search to see the original owners. Not long ago, Opensea removed Phunky Ape Yacht Club from its list of NFTs because it deemed it a 'fake' Bored Apes.
You should also make sure that you are on the right platform where the original NFT collection is sold, better if it has a verification badge on it.
High Purchise Limits
Members of most NFT projects can't buy more than 5 tokens in total. This is meant to ensure that the tokens are spread out amongst many people and not just a few people. Before investing in any NFT project, you should think about the purchase limits and how its value might change in time. A "whale" could buy the tokens that might cause their price to plummet.
One potential issue can be that, when most of the NFTs are held by whales and not many new members will be able to join. This hinders the scalability of projects
This year, DApp Radar reported that the NFT market has a total locked-in value (TVL) of $178 billion. This figure is growing every day and the industry is opening up various opportunities for people to make money.
Above we have covered the main ways of making money from FTT, and you can try one or more of them. But when trying any of these strategies, make sure that you have done proper research before investing your money in any project.