NFT – non-fungible tokens – is a trend that has been actively developing over the past two years. NFT is a record in the blockchain ledger about the ownership of a digital asset. The NFT world continues its victorious march, attracting not only NFT artists but also large businesses.
How Does NFT Technology Work
When the software tries to make changes to the blockchain, gas fees are charged. The amount of these fees depends on the network chosen. After a successful payment, the next step is freezing metadata and creating an NFT. This process is called “minting NFTs”. Tokens are tamper-proof and unique.
Creating NFTs is very simple. It takes less than 10 minutes.
What Are Gas Fees
Blockchain technology works like a DLT (distributed ledger technology) network and is built in such a way as to attract participants by offering the possibility of generating income. Cryptocurrency is a record of the amount of compensation for the work performed. In networks built on the Proof-of-Work algorithm, the computations that the miner’s equipment performs for generating a block and writing data to it are paid. The computational power of the equipment is important – the higher it is, the more the miner will get.
The new Proof-of-Stake algorithm implements a “green”, environmentally friendly way to operate the blockchain. Users lock their assets on the blockchain and receive rewards based on the size of the staked cryptocurrency. Gas fees, in this case, are transaction fees that are made in the system. The bonus of participants is based on them.
How to Set the Correct Transaction Fees
Creating an NFT means making a transaction, so you have to pay a cost to create. All unconfirmed operations are kept in a place called “mempool”. During the minting process, NFT creators send a confirmation of pay indicating gas fees.
The amount of this pay varies significantly depending on how many transactions need to be carried out at the moment. For example, gas fees on the Ethereum blockchain can be quite high with high network congestion. The records with higher transaction fees are withdrawn from the mempool. So it should not be too small.
But setting a fee that is too high, and NFT creator runs the risk that the sale of his own tokens may not pay off.
How do you set the fees correctly? Simple answer: “listen” to your cryptocurrency wallet. Most of the applications automatically set the currently optimal transaction costs.
If you want to specify the number of fees by yourself, use online services that will show how much it costs in real-time. For example, etherscan.io/gastracker. Here you can learn not only how much you need to pay in gwei but also in dollars for different sites, including the large NFT marketplace OpenSea.
You can also use the Telegram bot @EtherDROPS_bot.
You should note that the amount of fees changes constantly, so you need to find out the cost before you pay.
NFT Marketplace – The Place Where Tokens Are Minted and Sold
NFT marketplace is a service for minting NFTs and their subsequent sale. In fact, this is an intermediary that provides its resources to NFT creators. And without any doubt, you will have to pay for the services.
The most popular blockchain to create an NFT is Ethereum. The platforms for minting NFTs initially ran on the Ethereum. It was this blockchain where smart contracts were implemented for the first time, and an open protocol for non-fungible ERC 721 tokens was created. Later, other networks supporting contracts emerged, which are NFT-backed.
When choosing a platform, NFT creators are guided by its reliability and popularity. This is due to the number of potential buyers, the operational stability and the level of data protection. NFT art pieces are stored outside the blockchain, and their loss makes the token useless.
You will find the currently most popular platforms on the NFT market below:
A one-stop platform where you can create an NFT and sell it right away.
The project of Russian programmers with especially favorable conditions.
One of the projects of a well-known cryptocurrency exchange; is required to go through KYC verification.
It allows you to subscribe to develop your own advertising campaign. A monthly fee is applied.
No gas fees.
Flexibility, no mandatory topics. Besides, there are specialized platforms related to games or collections:
A well-known project of absolutely unique tokens allows you to make a collection.
A digital football game where each player takes an NFT card.
3D world, where you can buy a plot and equip it at your discretion.
A game about the settlers of the planet of the same name.
NFT world continues to surprise with exciting adventures: Axies are cute little animals that can be bred, collected, and sent to war against other participants.
A strategy game with virtual reality support. Economic assets are turned into NFTs.
Especially for artists exhibiting NFT artwork, NFT marketplaces SuperRare, Hashmasks, and MakersPlace have been created.
Those who are absolutely not ready to spend time on the implementation of something worthwhile can use an automated service where you can automatically create an NFT – Art Blocks. Users set the parameters, and the system generates a digital art object and creates an NFT.
Also, when choosing a service, minting fees should be taken into account. The cost to create NFTs should not exceed the cost of sale.
What Makes up a Cost of an NFT
You need to understand the cost of creating an NFT in order to calculate your potential income. The payment for NFT creation is not a one-time payment. It includes several components.
Usually, it means receiving a package of services, but it is already rare. OpenSea kept the account setup fees, but these are charged only after the first sale because a new smart contract is created.
Expenses on Cryptocurrencies
In order to pay a cost to create, you need to have a certain amount in your crypto wallet. The currency depends on the selected platform. For Ethereum, this is Ether. For Polygon, this is a native Matic token.
Payment for Minting NFTs
In fact, these are gas fees that are used on all NFT marketplaces. Without it, you cannot enter a transaction record into the network. The exception is the Polygon blockchain, which positions itself as “almost” gas fees-free. This is a second-level blockchain (multi-chain), which provides the ability to exchange tokens between different networks without high fees and time delays. Its transaction fees are extremely low, and NFT marketplaces (e.g. OpenSea) have stopped using it, declaring themselves as gas-free platforms with zero transaction costs.
Listing is an NFT publication in the marketplace catalog. Most platforms charge a transaction fee. The fees constantly change. The screenshots show the amount of payment at a five minutes interval.
Below you will learn how to create your own NFT for free.
The sale fees make up a significant share of NFT turnover, however charged only after the sale. On OpenSea and Rarible it is 2.5%, Mintable does not have any sales fees, ArtBlocks charges site fees of 10%.
How Much Does It Cost to Create an NFT on Rarible?
For example, let’s take a closer look at the cost to create NFT on the Rarible marketplace.
The connection to the platform is processed through the wallet. We use the Metamask extension.
Here, just like on OpenSea, the Ethereum and Polygon are available, as well as the blockchains Flow and Tezos with low fees. For minting tokens, let’s select the Ethereum network, our wallet and check how much it costs.
The extension will open automatically, and you can specify the network inside. If the network does not exist yet, the platform itself will transfer all the data. You will need just to confirm.
You can choose a different blockchain in the wallet.
After the registration is complete, you can edit the account setup by entering the name, address, description, portfolio site, and email address.
NFT Creation on Polygon
After clicking on the “Create” link, a window will open to choose a blockchain. Let’s try to create your first NFT on Polygon.
It is necessary to create a connection link to your crypto wallet. Rarible has substituted all the data in Metamask. We just have to accept the connection.
In the next step, you can choose the NFT minting method – single NFT or multiple. The first option allows you to create one instance of NFT. With the second one, you can create as many NFT instances as specified in the settings. In this case, all buyers will share the ownership right for your NFT art.
We pick the first option.
Next, the process of NFT generation starts. Choose a digital art object.
Specify the type of sale. So far, Rarible offers only a fixed price option, but they promise to add “Open for bids” (when buyers offer their own price) and “Timed auction” – an auction that is held for a certain time period.
The value can be specified in Matic tokens or in a wrapped Ether (PwETH). Let’s study the first option. On Coinmaketcap, let’s check the current token cost and its weekly volatility.
This information will help you to define the cost. To make a profit, let’s set 100 Matic. We immediately see the pay fees required.
So, when selling, we’ll be charged $4,036 at the current exchange rate.
You can place the token in the NFT collection of the platform, or you can create your own collection.
Important. You can specify the URL of NFT collections as numbers only.
You will have to pay fees for creating an NFT collection, as it generates a new smart contract.
At the time of writing this article, the Ether costs $3,120.92. The commission will make up approximately $73.6.
Next, we enter the name and description and set the royalty – a percentage of the cost that we will get when the NFT sells in the future. The default value is 10%, but you can specify your own value.
We do not make any additional settings, just create an NFT.
The system requests a commission. It makes up $26.5.
While the wallet is empty, we cannot process the payment. Let’s cancel the operation and buy some Matic. Click on the avatar and review the replenishment options:
- Add Funds with a card. You can buy cryptocurrency using the MoonPay service in case your region is supported.
- Add funds from ETH. You will be redirected to the Polygon Web Wallet website. Then you will see a suggestion to transfer the money from ETH to Matic.
Let’s replenish the account directly from the Metamask wallet. Open this wallet and press the “Buy” button. After switching to Wire Widget, you can specify the amount in the selected currency (the list contains 29 currencies in total).
Then we enter the personal information and card details, and the purchase is completed. The fees add up to nearly $7.
After all payments, the NFT will be placed in the collection.
We calculated the cost to create in the list below.
- Cryptocurrency expenses – $6.96
- Fees for creating a collection – $73.6
- Fees for mint NFTs – $26.5
- Total – $107,06
The potential income from the sale after deducting the site fees will be $157 at the current Matic exchange rate. By creating an NFT collection, we get a net profit of $50. You can save on the collection, and then we get a little more than $123. But if you are planning to post a package of sketches or a series of NFT art objects of the same type, the collection is needed for a quick search. And this kind of offer is easier to promote.
To calculate the current gas fees, use the service of the raribleanalytics.com platform.
The values change in real-time. Here you can calculate your expenses in advance without creating an NFT.
How to Create an NFT on the Ethereum Blockchain
For minting NFTs on the Ethereum blockchain, also click on “Create” and select it from the list. Next, we perform the same operations, leaving the same fixed price.
We see how much it costs in case of a purchase minus service fees. Fill in the data and consider the free minting option. If you are going to create an NFT and don’t want to pay the fee, leave this option enabled.
This approach is called “lazy minting” – gas fees are charged to the buyer, and the token itself is issued only at the moment of purchase. It means that you simply declare a token for sale, but it has not been created yet. If there is a buyer, the system will perform all the operations without you. Lazy minting is a great free option for NFT minting.
As a result, with the same input data, you will not pay anything, except for a percentage of the sale and payment for the NFT collection, if you decide to create it.
You can view your own NFTs in the profile. Keep in mind that there are fees charged for NFT removal.
Minting Costs on Opensea
The gas fee to mint NFTs on the Ethereum blockchain in OpenSea is about $44. But don’t forget that the minting fees constantly change! It is best to create an NFT at night when there is less user traffic. The same rule applies on weekdays.
Creating your own NFT on the Polygon blockchain showed the availability of lazy minting, but there are a few expenses that include a fee for unlocking cryptocurrencies. However, it is rather small – 56 cents.
Among the two NFT marketplaces, Rarible is the most profitable one, with its absolutely free lazy minting on the Ethereum blockchain. You can easily place your token for sale immediately.
How to Sell NFTs
It is easy to issue NFTs. However, it is much more difficult to sell them. After 10 minutes of release already, our NFT disappeared from the home screen. Yes, there are so many people desiring to issue a token that new proposals appear continuously. And placing an NFT in the directory alone will do nothing. Even though the filter and search, it is difficult to find the right image in the marketplace. Usually, they search by author or collection, but for this, you need to be a fairly well-known person.
The NFT technology is going through its early days, so this is the time to carve your niche in this field. If you have really decided to promote yourself or your business in NFT, you need to invest in marketing. There must be a general idea of your project, advertising and possibly its own website. Only in this case, your NFT art or a product will not be lost among thousands of similar tokens on the platform. So far, most NFTs are issued for media objects, but the perspectives are exciting – real estate, document workflow and much more that can be easily tokenized.
ICODA is a professional marketing agency in the field of blockchain, DeFi and NFT. We will help you to develop a promotion strategy, create a high demand for your offer, develop a personal brand and make it well-known and highly demanded. With our help, the users will compete in auctions for your NFTs and search for tokens on all platforms. Become something big with ICODA.