Digital land is generating huge returns for passive-income investors in the niche market of NFT projects. Axie Infinity, Wolf Game, NFT Worlds, and Aavegotchi are just some of the projects that have savvy buyers scooping up cash-flowing property. Digital land doesn’t come with any of the typical headaches of brick-and-mortar real estate; there are zero maintenance costs, no professional cleaners to schedule, or tenants to screen. Daniel Maegaard, also known as “Seedphrase,” recently posted a screenshot of his daily revenue from investing in land from the Axie Infinity ecosystem, bringing in $597,860 per year in passive income.
Investors can purchase a Mystic Plot for sale for $12,319 and receive a 44% annual return of $5,471, should the price of AXS maintain its current level.
Wolf Game, another NFT project, generates enormous returns for investors as well. Holders can upgrade structures and rent them out to other players for Wolf Game’s native token, WOOL. Bathhouses are in high demand, and the least expensive bathhouses in less popular locations currently rent for 15,000 WOOL for a rental period of 30 days. WOOL costs 1.5 cents today and bathhouses can be purchased for as low as 2.5 eth. This translates to a net ROI of 65% in the first year alone.
DAOs are even acting as the Web3 version of REITs, or Real Estate Investment Trusts. These groups pool money together to buy NFT properties in bulk and then split the cash flow as dividends to the DAO members. A DAO called WRLD TakeOver generates 18,000 $WRLD tokens per month for their members, all thanks to a $9,352 purchase of six parcels of land in the NFT Worlds ecosystem.
Many NFT projects are also utilizing Layer 2 blockchains to help cut down on transaction costs and maximize ROI for holders. Aavegotchi is a leading project on the Polygon blockchain that allows holders to farm land in the “Gotchiverse” for four different tokens collectively known as Alchemica. One Aavegotchi whale, Dr. Wagmi, recently tweeted that he’ll be making $3,000 over the next eight weeks for farming Alchemica on his plots of land, generating a return of 45% for the year.
Assuming these projects can stay afloat, there’s a chance these investments will pay insane dividends over multi-year timeframes, and if gaming does become the next meta in Web3, then there’s a strong possibility these returns could become even more lucrative if their tokens regain any of their price levels from the previous bull cycle. These types of opportunities for return on investment are unheard of in traditional real estate, making NFT property projects an attractive investment for those seeking a high return. However, investing in real-world property is much more predictable than investing in anything related to NFTs.