NEW CONCEPT: Earning Passive Income By Lending Your NFTs
Mr. Fox breaks down the newest development in the bull case for NFTs - earning passive income on them through lending.
Hello all and welcome back. Today is a very exciting email for the future of NFTs. If you do not come from a baseline understanding of finance or economics some of the ideas here may be foreign, but you should be able to grasp what we’re talking about.
The point of today’s email is to further encourage you to start investing in NFTs. Remember though, nothing here should be considered financial advice.
Just two days ago I was having a conversation with a subscriber to the newsletter. He was considering investing in a CryptoPunk (the first and biggest digital avatar project, cheapest available for $35 000 USD). His major gripe though, was that it was a large sum of money to invest in an asset that did not return an income. It would only put dollars into his pocket if he sold it for a profit. He was correct, and it’s an issue many have with NFTs - until today that is.
Aave is one of cryptocurrency’s biggest decentralized finance liquidity protocols. What does that mean in English? It’s one of the biggest platforms in the world for people to lend and borrow cryptocurrencies. For example, if I have lots of bitcoin that I don’t intend on using in the near-future, I can send it to Aave to make it available for someone else to borrow, making it possible for me to earn passive income on bitcoin that was going to sit in my wallet doing nothing anyway.
Ok. So you understand what Aave does, why do you need to know? Because of what their founder tweeted today:
What does this mean? It means we will soon be able to make money from simply owning NFTs by lending them out to people who want to use them. I will be able to send my Bored Ape to Aave and have someone else borrow it while they pay me to do so. This is huge. This adds an entirely new layer on top of the money-making possibilities of NFTs. The demand for NFTs as a whole will increase because of this development.
Why would somebody want to borrow your NFT? It may not be super clear right now, but you have to think about the bigger picture. Perhaps museums (both physical and digital) want to use your NFT as part of their exhibit. Maybe you want entry to a digital experience but can only get in if you own a CryptoPunk or Bored Ape. The possibilities have not even begun to develop. What’s most important right now is to understand that the right NFT, such as a Bored Ape, can be a great piece of art, an access token to a community, and now, a financial product.
A tweet from NFT influencer, Beanie:
Why is this valuable for people who build brands around their NFTs (such as Mr. Fox and his Bored Ape)? Because the NFTs with bigger brand recognition will be able to earn more money when being lent out. What does this mean for the NFT market as a whole but particularly digital avatars? Expect people to start creating and innovating with their own brands way more. Overall, the activity in NFTs is going to heat up massively because of this.
And so with all that, how can you take advantage? What does this mean for the next move? It means you should get your hands on an NFT (a high-quality digital avatar) because demand for them is only going to grow.
If you’re interested in acquiring one, reach out to me and I can guide you through the process. The top three I would recommend, from most to least expensive, are CryptoPunks, Bored Apes, and Gutter Cats. You can find each of their verified collections on OpenSea.
As always, feel free to ask any questions via email and to follow me on Twitter (@f4ntast1cmrf0x).
If you want to take advantage of the generational opportunity provided by crypto but don’t have the time to do some proper research or investing, let me know and I can manage your money for you.
And down the Rabbit Hole we continue.
Mr. Fox.