Why Staking NFTs Might Not Be As Cool As We Thought It Was

The staking process provides a necessary security backbone inside Proof Of Stake networks. Since NFTs, staking has evolved to give holders unique benefits inside a project’s ecosystem. However, users have begun to question these supposed “rewards”. Are they sufficient? Or merely a tactic of short-term manipulation?

A Useful Tool? Or A Useless Feature?

While staking NFTs appears alluring, users have begun to question if the supposed “utility” around staking offers any actual benefits. To go further, some have even dubbed the act of staking as “Ponzinomics 101,” claiming that staking provides nothing but artificial utility and false metrics resulting in short-term “FOMO.”.

The act of ‘Staking’ has seen a drastic change through Cryptocurrency into NFTs. In Proof Of Stake (POS) networks, “validators” would offer their coins as collateral for the chance to validate blocks. In return, they would be rewarded for doing so. Therefore, staking awarded users risking collateral and maintaining functions necessary to the continued operation of the network.

Now, staking seems to act as a placement holder for unimaginative collections trying to keep their community from selling.

What Is Staking & Is It Pointless?

In brief,  staking involves “locking up” an NFT either through that NFT project or on an outside platform. In return for staking an NFT, holders earn “staking rewards”. While the worth surrounding staking still remains, some projects provide unique benefits to those who follow through with staking. Though rewards vary from collection, holders have received additional NFTs as well as Land plots to metaverse lands which can then be sold on the secondary market.

Thus, staking NFTs allows holders to earn passive income; however, few projects have implemented staking “properly”. As most projects use staking as a “necessary” stage in development, it will be interesting to see the shift in supposed “utility” surrounding staking in the future as the community begins to change their opinions regarding its usefulness.