An NFT (non-fungible token) is a unit of data stored on a blockchain that can be used to identify a particular digital asset.
So far, the NFT is mostly popular in the entertainment industry, with most tokens issued for digital art and collectible items. However, the NFT offers significantly greater capabilities. Gary Vaynerchuk, an entrepreneur, known for his unconventional outside-the-box thinking, believes that this technology represents a major cultural change that will take place in the near future.
NFT Business — The Pros and Cons
The blockchain, DeFi, and NFT are still relatively new terms that are only starting to attract users. However, crypto enthusiasts believe in the unlimited potential of the new technologies and consider them to be the foundation of the future economy.
On November 22, 2021, the data platform Chainalysis published a report on the NFT market. It demonstrates the growth in the weekly total cryptocurrency value on the market throughout 2021.
In August, a new NFT collection known as the Bored Ape Yacht Club was released. The chart shows that this event attracted a lot of interest which can be directly expressed in dollar terms. This leads to a simple conclusion: good business ideas can produce larger profits in the NFT environment than in the crisis-hit traditional economy. What is interesting, the underlying concept of the Bored Ape Yacht Club is quite basic. The tokens represent the unique VIP membership cards of a yacht club.
If you are trying to come up with your own business idea to enter the NFT market right now, pay attention to the chart below. It demonstrates what spheres the users are interested in.
The funny and somewhat weird apes are still ahead of everyone else, outperformed only by the mutant apes that can be created based on the original apes.
So far, art and gaming are still the most popular areas for NFT technology. This means that there are no limits for NFT entrepreneurs. There are lots of opportunities that you can benefit from by coming up with a rather simple original idea.
If you still do not believe in the potential of the NFT sphere, look at the increase in the number of users of a leading NFT marketplace — OpenSea.
Can You Sell NFTS and Make a Profit?
Since the NFT market is still in its early stages, it can be hard to tell what will grab the attention of the NFT community and what will fail to do so. However, up to 90% of potential success is determined by great marketing. Chainalysis have analyzed the profits of the whitelisted participants of the new NFT projects.
This explains why users strive to enter the whitelist of new releases: 78% of them gain profits, and half of them double their investments.
As a result, even NFT projects that are not seen as promising at first can build the hype and achieve success.
If you have business ideas with long-term potential, you can assert your position in the market and set new standards.
Is It Difficult to Create an NFT Online?
Issuing an NFT is very simple and does not take more than ten minutes. To create an NFT, you need to carry out several simple steps.
- Prepare a digital asset for your token. It can be a drawing, an animation, a video, a piece of music, or a tweet screenshot — basically, any digital item.
- Register a digital wallet, for example, using the browser extension MetaMask, the Coinbase wallet, or any other service.
- Choose a marketplace — below, you will find information about the most popular platforms.
- Connect the digital wallet.
- Upload a digital item and proceed to create an NFT.
- Create content and adjust the settings for your own NFT.
- Create a collection (this step is optional and can be skipped).
- List the item on the selected NFT marketplace by paying the fees involved.
After that, the creator can sell their own NFT. The minimum price starts at zero and depends on the platform and the current gas fee. For example, OpenSea offers to create a “lazy” NFT (without paying a listing fee) on the Ethereum blockchain for free. The token is released only after it is sold. The Polygon blockchain on Rarible offers very low gas fees, and users can mint NFTs at less than $10.
On some platforms, the NFT sales are launched at once, while on other platforms, the items have to be approved by the moderator. This system is used by Nifty Gateway, a respectable marketplace that takes responsibility for the quality of digital items it sells. On this platform, you can sell your NFT at a higher price if it actually has the features of an NFT artwork.
Buying a token is even easier: you can connect a buyer’s wallet and close a deal in a couple of minutes.
Why Is It Profitable for NFT Artist to Sell Their Digital Artworks?
Due to the low transaction costs for minting tokens, NFT artists can avoid any intermediaries and sell their art to the buyers, receiving their money directly. For famous people, this means significantly higher profits. Beginners, on the other hand, can get lost among numerous competitors. They need to make themselves known using other methods, mostly through advertisement and promoting their personal brand.
Why Is NFT Art So Popular?
The new market offers limitless possibilities. They can be integrated into any existing business or used to set up a new company. Any object that requires proof of ownership can be tokenized. Examples include the right of ownership of a house, a profile picture on social media, a rare collectible video of an athlete, and an artifact in your favorite game. As you can see, both small businesses and large companies can find a way to introduce tokens into their operation.
However, so far, the dominant trend is the NFT art. This is explained by the fact that the market’s technologies and procedures are still in their early stages. The easiest thing to do is to digitize drawings or create media files from scratch. Just like a child gets to know the world starting from the most basic concepts, the users are currently trying these new opportunities. This is the time when good NFT business ideas are worth their weight in gold and can easily enter the NFT market that is still open for new participants.
How to Create an NFT Business Step by Step
ICODA is a community of developers, marketing consultants, and designers. Our company helps beginners who are trying to master new technologies and are looking for their place in the digital business world. We have successfully helped to launch many businesses — from creating a new blockchain to providing turnkey solutions that include both the technical and the marketing aspects.
If you have an idea, reach out to us, and we will help to bring it to life.
Starting a Project
So, you have a business idea. You might think that this is a better idea than any other for launching NFT projects, but at first, you need to answer several questions.
Are There Any Similar NFT Projects on the Market?
If there are competitors, it is both good and bad. The good thing is that you already know that this service is in demand, and you can learn from the mistakes of other people instead of making them yourself. The bad thing is that you will face competition and will have to prove that you are better. Sometimes it can be hard to do.
How Valuable Is Your Offer for Other Users?
To sell an NFT, you need to make it valuable. Without any material objects, it might be difficult. At first, you should consider the target audience of your business idea. What will you sell, and who will be willing to pay money for that? What are these people like, and what are their thoughts and needs? You need to understand your customers.
What Will Make Your Idea Special?
The business idea and the general concept of the project may be two different things. If you want to sell non-fungible tokens, what will the buyers be paying for? This may be a collectible digital file, the right of access to valuable information, data protection, or something else. You will find several basic ideas for an NFT business at the end of this article.
Designing and Developing the Business Models
The blueprints and their descriptions are necessary for structuring future interactions with users. How will your ideas be converted into money? The procedures for registration, authorization, and selling NFTs should all be described in as much detail as possible. What will be the roles of your employees and the moderation processes? Every online business has lots of technical aspects.
Choosing the Tech Stack
After the business ideas have been described and detailed, you need to choose the technologies for their implementation:
- the blockchain;
- the crypto wallet;
- the environment for creating smart contracts;
- the minting standard;
- the front end and back end programming languages;
- the database;
- the API of additional services, etc.
An NFT business can have a very basic operating principle but may require the development of numerous additional functions that are necessary to attract users. This will make it much easier to sell your NFT because the convenient features of your platform will promote your service better than any advertisement.
Developing the Interface and the App Design
The design is not only about beautiful pictures. The design skills require understanding the principles of convenience and knowing how to build the user path based on your experience. The customary actions (such as using the checkout, searching for items, and applying filters) with unexpected creative solutions. You need to find the balance between the things that are familiar and new to make the process convenient yet attract the users’ attention with something unique. Keep it in mind that most users who are willing to pay money in this new sphere are crypto enthusiasts.
At this stage, the technical engineers develop a ready-made solution based on the provided documentation. Your business ideas are actually implemented as a website or a decentralized app.
Testing is performed at each step of the above-mentioned stage of code development. However, when the code is finished, it is important to launch the beta version and check it for bugs.
Deploying the project on its platform requires technical knowledge. This operation is usually performed by the programmers or the developer’s administrators.
The project marketing begins as soon as the idea is formulated. At first, the target audience and the potential competitors are analyzed. After that, you should calculate the main indicators that will demonstrate the actual payback period and conditions. To understand the size of the potential audience and decide on the main promotion strategies, experts conduct research and interviews.
During the development process, the first advertisement campaign is launched. This is the time to set up a landing page, a YouTube channel, profiles on social media, and the NFT community in Discord, and to organize promo offerings — basically, to do anything that will inform as many people as possible about the new startup. In this case, the service will have its first followers as soon as it is launched.
The marketing specialists come up with a system of discounts and gifts, the conditions for including users on a whitelist, and many other aspects.
The Most Profitable Ideas for an NFT Business
How soon you will start making a profit depends on the type of business and the starting conditions. The beginners who do not have a reputation in the crypto community need to work on creating their personal brand at first.
You can only sell a non-fungible token, especially an expensive one, if it is truly unique. However, the experience of minting tokens on the top platforms shows that the new image is only displayed on the main page for 10 minutes or even less. There are so many users willing to have a shot in this new sphere that even the most talented NFT artist can easily get lost in the crowd.
If your business is related to providing services offline, and you are trying to tokenize its IT component, it will be a long time before you start making a profit. At first, you will need to demonstrate the validity and the safety of your idea because it will most likely involve real money. For example, you might offer real estate or investment services.
Currently, we can identify several areas in which the ideas are already producing significant returns.
Any works of art that exist in a digital format can be tokenized. You can create it as a digital file from the beginning or digitize a physical painting. Music pieces, videos, movies, and any other artworks can be tokenized.
Are there any sports fans or car enthusiasts among your acquaintances? In this case, tokenization will be in high demand. You simply need to find an idea for a collection and implement it.
If you own a game and you are ready to give up the distribution of valuable artifacts by transferring these rights to the players, you can consider this idea and tokenize the artifacts. Gamers are enthusiasts who are ready to pay for additional features in the gaming world.
An NFT is also a financial asset that is traded on the market. You can profit off the price difference or set up a company that will function as an NFT broker for your customers.
An NFT can be used to provide proof of ownership on the blockchain. Houses, apartments, and land plots also need title certificates. The process of real estate acquisition can be simplified and moved to the blockchain. In this case, if you develop a decentralized app, you need to consider the procedures of registration with the authorities and implement these processes in your project.
If there is a need to prove someone’s membership in any community, it can be tokenized, as we have seen in the example with the yacht club. You can provide discounts or special business conditions by including the preferences into the smart contracts of owners. The most important thing is for your main business to have value for its customers. In this case, the tokens will also be in demand. This can be any business, such as consulting services, online schools, information services, etc.
You can set up your own social media or community and tokenize all user features — from a profile picture to authorization information.
Data Protection Based on the Rights of Access
Smart contracts make it possible to link each non-fungible token with specific rights for certain actions within the system. In this case, you do not even need to sell an NFT. You can profit off subscription fees, for example, the fees charged for using cloud storage or a database.
Setting up Your Own NFT Marketplace
If you understand the disadvantages of existing platforms and know how to fix them, you can set up your own NFT sale platform. Ideally, it should also offer users the option to make an NFT. You can establish a platform where users can sell non-fungible tokens and distribute your own NFT assets, such as gaming and collectible tokens. In this case, you will not need to pay any commissions except for the gas fee.
White Label NFT Service and Manufacturer Labeling
Tokens can be used for labeling goods. White labeling is the process of replacing the brand of an unknown creator with the branding name of the seller. If you promote your own products, the tokens will help to identify them at any stage of sales. Nike has already done that.
Virtual Copies of Physical Objects
Is it possible to buy Gucci sneakers for 9 U.S. dollars? If we are talking about the virtual worlds and the NFT, the possibility is quite real. If you do not own production facilities but have lots of creative ideas, enter into contracts with famous brands. Precedents have already been established in the world of fashion, where virtual copies of clothing items are released alongside the actual clothes. In this way, a customer can be dressed in the same clothes both in the virtual and physical worlds.
How Much Money Do You Need to Launch an NFT Business?
You can sell your NFT on NFT marketplaces for free. However, to call it a business, you need to set up an NFT collection. This is why the minimal starting amount is 100 U.S. dollars — this includes the transaction fee that will be charged by the blockchain for writing down the information about the collection in the smart contract and the fees for minting non-fungible tokens. If you create your NFT art on your own and are willing to promote your brand, this is the approximate amount that you will need. To decrease the expenses and the transaction fees, mint your tokens at night on weekdays when the network load is minimal.
To launch a larger company with higher profits, you need to invest more into the development process. To design and program your own application or service, you will need at least 100,000 U.S. dollars. If you want to develop your business rapidly, you will additionally need to spend the same amount on marketing.
To find out the exact costs of implementing your ideas, contact ICODA. Our experts will help you quickly analyze the investment size and the potential payback period.
The Best NFT Marketplace — A Review of Existing Platforms
There are still relatively few NFT marketplaces with a solid reputation. The oldest one among them is OpenSea which has functioned since 2017 or less than five years. For our purpose, we can classify all platforms into two categories.
Platforms Where Users Can Create NFTs
These platforms are universal and are not limited by any particular sphere. Each content creator can organize an NFT collection, add digital assets, and sell NFTs.
This is one of the top marketplaces that operates on the Ethereum blockchain. It has recently added the Polygon blockchain with an extremely low gas fee.
This platform has a simple and intuitive interface, and its continuous development has attracted many users. The marketplace is gradually expanding beyond the NFT sphere and integrating with the DeFi market.
This is another project of a famous exchange for those who are looking for stability and safety. The service operates on the Binance Smart Chain. To register on the platform, users need to complete the Know Your Customer (KYC) procedure. To list an NFT, you need to wait a long time before it is verified.
This marketplace also offers marketing services. If you pay for a subscription, you can order a comprehensive advertisement campaign.
The platform was launched in January 2022. It has a no transaction fee policy and offers help with creating tokens. However, so far, the users cannot make an NFT on their own.
Theme-Specific Platforms for Buying an NFT
These are the NFT projects of various companies and developers which have gained popularity in the NFT community. Creating a marketplace of this type is a great start for your own company. You need to implement your NFT business ideas and make them valuable to the audience.
These images of funny characters are quite simple but also extremely popular.
The Axie marketplace is one of the first specialized platforms. An Axie is a cute pet that can participate in battles. Each creature has its own token and genome. The creatures can be bred and collected.
Of course, the first NFT fame was about kittens. The players attempt to create the unique breeds of digital cats.
This is the NFT project of a fantasy football game where the participants manage their virtual teams and issue non-fungible tokens for players. By exchanging the cards, they can sell and buy football players similar to real football transfers.
This platform has virtual worlds where users may buy virtual plots of land and organize them as they like. Basically, this is a tokenized 3D game.
This is another virtual NFT world. Tokens represent the colonizers of the Avastar planet, each of whom is unique and has traits with five rarity levels.
This is a 3D game that allows players to escape from reality and enter its unique world with its own economy and society. Users may build a house and take care of a piece of land.
What Should You Do if You Can Generate Good Ideas but Cannot Start a Business Yourself?
Many people have great ideas but have no clue about the nuances of creating a business. Entrepreneurs have to deal with legal procedures, advertisement, marketing, NFT sale, service implementation, and many other tasks, and it can be easy to get overwhelmed.
Simply contact ICODA. We actually help beginner entrepreneurs. Our experts have great design skills, use development technologies professionally, and are well-versed in marketing tools.
Even if you have solid experience in business, the NFT space and DeFi may cause some difficulties due to their completely new principles. Instead of a traditional bank account, there is a digital wallet, the areas of responsibility are different, and the interaction with clients is based on completely new technologies. This may be a formidable obstacle for someone trying to start a blockchain-based business.
ICODA is ready to help you. We will assist you in understanding the intricate details of this sphere. We will design your own NFT cryptocurrency, develop your concept and implement your strategy.
Our services include various aspects of creating and promoting a business: from programming smart contracts to implement a comprehensive marketing strategy. Become an NFT entrepreneur with ICODA.