I’m Earning $541 Per Month in Passive Income Through NFTs

These Crypto Tokens Aren’t Just Pieces of Digital Art Anymore…

Six months ago—in late January—I wrote this as the lead sentence in a dispatch I sent to you: “I don’t know how you’d feel about an extra $182.48 per month, but me, I’m pretty stoked.” 

Now, I come to you with my head bowed to say, “I lied.” I did not receive $182.48 per month over the past half year. 

Dramatic head lift… big smile. 

I’ve earned about $541 per month instead… all thanks to NFTs, or non-fungible tokens, those one-off, one-of-a-kind cryptos that look like pieces of digital art. 

At that start of the year, I began a project to generate passive income from my broad (and ever-broadening) collection of NFTs. 

Over the past year, NFTs have been going through a metamorphosis. While they started as just pieces of digital art, and provided proof of ownership of that art, some are effectively becoming akin to digital stock certificates. I say that because hundreds of NFT projects have been launched to bring real businesses into the crypto world. 

Many of those businesses are tied to gambling or other forms of gaming. Some are tied to peer-to-peer lending operations. Still others are tied to technology or investment services. One runs a legal, real-world marijuana business in Portugal that is shipping product around Europe. 

All of them are generating profits from those businesses, and many are turning around and sharing a large portion of those profits with the owners of the associated NFT projects. 

Basically, they’re paying out what you and I would call dividends, but which the NFT space calls “distributions.” These distributions are paid in the form of cryptocurrencies. Some pay daily, some weekly, some monthly or some quarterly. Yields are routinely much larger than we’re accustomed to in the stock market, where most dividend-paying stocks pay about 1% to 5%.  

With my portfolio of NFTs, yields are regularly in the 20% to 120% range, depending on the project. 

My most profitable project—what’s known as Degen Fat Cats, which runs a wagering site—has consistently yielded between 25% and 50%. You can see my most recent Fat Cat purchase (I have five now) below. And, yes, I realize how ridiculous it is that this goofy picture has paid me nearly $400 so far this year… but this is the nature of NFTs. 

That yield between 25% and 50% speaks to the uniqueness and challenges of NFTs as income investments. There’s no real consistency. 

Income that the projects earn bounces around from week to week. And prices for the NFTs fluctuate pretty wildly, too. As such, a yield that was 25% one week could be 40% the next if the NFT price drops and the income soars… or 10% if the opposite happens. 

And both of those do happen regularly. 

An NFT I bought for 11.25 Solana, the cryptocurrency in which I typically operate, paid a 12 Solana dividend—meaning my real cost was -0.75 Solana. Today that NFT is priced at 50 Solana. In dollar terms, I spent about $236, received a rebate of about $252… and today that NFT is worth about $1,350. 

But income can plunge, too. 

I’ve got several projects where the yield has dropped off to 0% because of internal problems with the project that forced the teams to halt payments temporarily while they work out solutions. 

But that’s just part of the cost when you’re investing along the bleeding edge of technology. 

I don’t let those plunges bother me because the other projects I own that are kicking off distributions make up for it.  

So far this year, I’ve earned 120.3652 Solana from distributions. As I write this, Solana is trading near $27, meaning my income is right at $3,250 this year, or about $541 per month. To be clear, Solana has fluctuated wildly in the last six months. So, some of my distributions have come when Solana was in the $14 range… and some have come at $27. Most were paid out when Solana was between $18 and $22. 

That’s all fine and dandy with me and it points out the big benefit of earning distributions when Solana is cheap. The Solana I collect today is going to be worth substantially more tomorrow, when Solana is back at pre-bear market prices. If 1 Solana shoots up to $100 (as I expect it could), my 120 Solana would suddenly be worth $12,000.  

So far, I’m happy with my NFT passive income portfolio. I have winners and losers, as is to be expected in any portfolio. But overall, I’m pleased with the results. I’m still waiting on two projects to begin their payouts, including the Portugal-based legal-weed company. That should help drive income even higher in the latter half of the year. 

I will say this: Managing a portfolio of passive income NFTs is not without its challenges, if only because this is such a new space and teams are writing and rewriting rules on the fly. Regardless, this is where the world of investing is headed.  

If someone wants to send me free money for owning a cartoonish picture of Degen Fat Cat, then I’ll be quite happy to take it.