In yesterday’s dispatch, I offered an introduction to the passive income possibilities of NFTs by way of an example called Sea Shanties.
A quick recap in case none of that made sense to you.
NFTs, or non-fungible tokens, are one-off, one-of-a-kind crypto projects that can represent anything from digital art to online access for a ring-fenced website.
They have exploded in popularity, in part because they increasingly offer a regular income to their owners.
To wit: Sea Shanties.
Sea Shanties is an underwater-themed financial ecosystem. In return for owning a Shanty NFT, you collect 6.9 Triton tokens per day ($TRTN)—a new cryptocurrency created for this ecosystem. At time of writing, each $TRTN is worth about $1.03, meaning each Shanty is generating about $7.11 per day.
The value of $TRTN will certainly fluctuate, meaning the amount of the payout will change. Still, this kind of income-earning opportunity explains why NFTs have held up well in value, even as the wider crypto market has fallen in recent weeks.
It also explains why Sea Shanties—which cost me 1 SOL, or $130, when they launched—are now selling for about 14 SOL (around $1,260 at time of writing) on the secondary market just over a week later.
OK, now you’re all caught up…
So, how do you buy an NFT like this.
Well, there are two ways. The best way to grab an NFT is to participate in the minting, meaning to buy one of these NFTs at launch.
Explaining how to participate in that is more complex since NFT minting processes can differ from project to project.
However, if you’re interested in exploring this world, I’d suggest you check out The Fellowship and Heaven Land, which I mentioned in yesterday’s dispatch. These projects have yet to mint, and could be profitable. (Those are not recommendations; just projects I find interesting. As always, NFTs are a brand-new, risky asset class, so never invest more than you can afford to lose.)
The other way to get an income-producing NFT is to buy one on the secondary market, which brings us back to Sea Shanties. It’s a good example of the process of turning an NFT into real income.
- Get a Browser Wallet
First, you need a crypto wallet that operates on the Solana network, since that’s the network Sea Shanties is on. I use Phantom wallet, a browser-based wallet that you download as an extension to your internet browser (it works with Brave, Chrome, and Firefox). It’s quite easy to install, set up, and use.
- Fund Your Wallet
Once you’ve set up your wallet, you need to buy Solana. The best place to do that is through Coinbase, Binance.US, or Crypto.com. After buying Solana, called SOL because of its trading symbol, transfer it to your Phantom wallet. Again, an easy process.
- Buy the NFT
With SOL in your wallet, you’re ready to buy. Head to MagicEden.io—the secondary market where Shanties are listed—and type “Sea Shanties” into the search bar. The collection of available Shanties will appear.
Though there are rarity issues that affect value (some Shanties are rarer than others), all I really care about is owning the lowest priced Shanty, since they all distribute the same amount of $TRTN.
Before you buy, you need to connect your Phantom wallet to Magic Eden. Do so by clicking on “Connect Wallet” in the upper-right corner of Magic Eden. Your wallet will pop up and ask you to approve the connection. Click “Approve.”
You’re now ready to buy a Shanty.
Click on the Shanty you want; click the purple-and-pink “Buy now” button in the center of the page that appears; approve the transaction when your wallet pops up…and seconds later you will own a Sea Shanty. (Look in your wallet for the icon with four squares; that’s where your NFTs are held.)
- “Stake” Your NFT for Income
Now, head to shill-city.com and connect your wallet.
Your Shanty will show up. Click “Stake,” then approve, and you Shanty will be staked, meaning it will start earning income.
Refresh the page after a few seconds and you will see your staked Shanty as well as the “Estimated Rewards” you’ve collected in those few seconds. Each time you refresh the page, the number will increase since you’re constantly accumulating $TRTN.
- Turn Your New Crypto into USDC
Whenever you want turn your $TRTN into USDC, click “Redeem” then approve, and your $TRTN will dump into your Phantom wallet, while your Shanty remains staked and continually earning.
With $TRTN in your wallet, head to lp.shill-city.com and connect your wallet again. In the “TRTN” box, insert how much $TRTN you want to convert. You will immediately see how much it’s worth in USDC. Click “Swap”…and seconds later the USDC appears in your Phantom wallet.
And that’s it. You can now send your USDC back to your account at Binance.US, or Coinbase, where you can convert it into real dollars. (Make sure to send it on the SOL network.)
That’s what earning passive income through NFTs looks like in one example. Not all follow exactly the same process, but that gives you a sense of what’s involved.
To me, this is a fine moment to pursue opportunities similar to Sea Shanties—a moment to use cheap cryptocurrency to build a passive-income stream. It’s no different really than using a selloff on Wall Street to grab companies with dividends that are unusually high simply because the stock price is temporarily down.
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