The Non-Fungible Token phenomenon has taken the decentralized world by storm, launching entirely new sectors in the industry and expanding the capabilities of others. With the Web 3.0 encroaching on the internet and businesses seeking ways of migrating into the new digital environment with their products and services in tow, NFTs are emerging as a viable and valuable carrier of essence that can be translated and, more importantly – used within the digital medium.
Apart from providing immutability of records via its underlying blockchain and ensuring the protection of copyright and ownership rights by virtue of their technical characteristics, Non-Fungible Tokens are also a value carrier that has applications both inside the digital environment and in the real world. As tokens that act across chains, NFTs can migrate between various blockchains while retaining their value and functionality, meaning that they can be used in the capacities they are endowed with. This gives NFTs a variety of applications in video games, art, business scenarios, and many other use cases, highlighting the potential of these digital assets and their technical prowess.
Numerous artists have already emerged, exploiting NFTs as a new artistic medium to express their creativity. Ranging from works of outstanding art to pixelated Gifs, these NFTs serve as both canvases for expressing imagery and other types of expression, and as assets that gain value over the long term in conjunction with the eminence of their authors. This makes NFTs an important element of the decentralized community, where showcasing an NFT avatar from a certain collection, or brandishing an expensive work of digital art instantly propels the owner into a separate league of enthusiasts and underscores their adherence to a set of shared values.
The new throng of metaverses that are emerging on the wave of hype evoked by the technical possibilities opened up by blockchain technologies are opening up entirely new horizons for the application of NFTs in decentralized environments. The fact that NFTs can be created by users gives them an entirely new quality that sets users apart from developers in terms of environment enrichment and gives them the reins of both game progression and value generation. This means that players in decentralized games or metaverse environments can now earn money on crafting NFTs and thus create entire economies that serve the purposes of both metaverse developers and the businesses inhabiting them.
But before any NFT can be acquired or brandished as a valuable commodity of asset to be used within a dedicated digital environment, it must first be created and listed on specialized platforms that deal in their sale and distribution. The biggest question that arises in the minds of anyone inspired by the NFT phenomenon is how to list an NFT in the first place once it has been created as a concept or digital image. The answer to how to list NFT assets is simpler than most users of the decentralized environment might think. But where to list NFT art is a different matter entirely, as is where to buy and sell NFTs.
In fact, there are numerous NFT listing sites and the list of NFT marketplaces is growing together with the industry, considering that it is a lucrative one. The NFT marketplace list is extensive, giving users plenty of opportunities and choice of where to buy NFTs, and where to post their creativity.
NFT listing is the process of posting a created work of NFT art or any other digital asset in Non-Fungible Token format on a dedicated platform or marketplace that specializes in the sale and distribution of NFTs. The process of listing is quite simple, as all users need to have is a digital wallet that can be connected to a selected marketplace.
The choice of marketplace is a completely different matter, as most marketplaces differ in the level of liquidity, the user experience, the royalties they charge, the gas fees, the conditions they pose before artists, and many other issues that may or may not be favorable for users. As such, listing an NFT is more of a lengthy process of selection of a platform, rather than the single click it takes to upload a digital piece of art or asset on a selected venue.
All NFTs are purchased and sold on platforms called marketplaces. These venues specialize not only on the listing and placement of NFTs for sale at auction, but also on the release of NFTs on selected blockchains, most often – the Ethereum blockchain. All marketplaces boast various conditions, each of which can be both beneficial or not for the author. The conditions may change based on market situations, since marketplaces operate on the basic principle of supply and demand, which dictates the prices, commissions, gas fees, and other factors affecting the ultimate value and demand for NFTs.
Marketplaces also serve the purpose of acting as venues for the secondary sale of NFTs. But these secondary sales are not only transactions between the buyer and seller, since they also involve the marketplace and the author of the original work. The marketplace retains a commission for acting as a venue of the sale, while the author receives royalties for their work.
The process of making an NFT starts far from the decentralized environment and depends entirely on the direction of the author. An NFT may take the form of a video file, a visual image, a sound file, music, or even a simple branded token that is tethered to a real-world asset it will be representing in digital format. As such, the process of making an NFT is centered around its concept and intrinsic value, while the rest is the work of the underlying blockchain.
Once the asset that is to be the NFT has been created and the author is ready to make the move to decentralized space, the first thing that needs to be done is the purchase of some cryptocurrency. With the cryptocurrencies purchased and transferred to a wallet, the user must then select the platform that will be minting, or issuing, their NFT.
The platform will charge a commission for the minting of the NFT in a cryptocurrency. Once the user has created an account on the selected platform, they will have to connect their wallet to it and go to a dedicated section of the site that will allow the NFT to be created. The user will then need to decide whether the asset will be sold one-off, or multiple times. The latter option means that more than one user will have access to the created work, but the NFTs backing them will be different. In the opposite case, the work will be unique and only one example of it will exist on the market. The multiple sale option is best for works like music albums and mass-market items. Single-sale options are best for unique and valuable works or art like paintings. With the given option selected, the user will be asked to upload their file that will become the future NFT. Each platform has a certain size limit set for NFTs, which can be anywhere from a few bytes to up to 30 or more MB. Once the files have been uploaded, the user must order the website to create the NFT. At that point, the blockchain will be tasked with minting the NFT to tether it to the asset it represents. A platform commission and a gas fee will be charged for the process.
Once the NFT has been created, the author will have to decide how they want their NFT to be sold. The options on offer are largely the same across platforms. There is the Fixed price option, whereby the artist sets the price they want and it will not be negotiable. Another option is the Unlimited auction, whereby users will continue raising the bids until the author is satisfied with an offered price and terminates the auction by selling the NFT to the highest bidder. The third option is the Timed auction, whereby there is a time limit for the auction to take place and the highest bid set during that timeframe will be the buyer. There are also risks in terms of price setting, since setting the price too low will likely result in extremely small winnings, given the gas commissions involved. Setting the price too high can result in poor sales, considering the value of the NFT and its long-term potential in the eyes of buyers.
Buyers are more likely to bid for an NFT if it is described well, has a backstory, there is proper information about the artist and they see that the author has made the effort of creating a quality description. Therefore, it is essential to work on the description of the NFT as much as on the NFT itself.
The platform of choice will also ask the author to set a percentage of royalties. This is a percentage that the author will receive from the resale of their work. The choice is also tricky, as low royalties will result in low passive income on resale, while high royalties will deter buyers from purchasing the NFT on the secondary market to avoid overpayment. Once the NFT has been created, described and all the prices and royalties set, the author can list their assets and launch an auction of choice.
The list of NFT marketplaces is broad, with over 44 active websites operating on the market, However, not all venues are as prominent as others, since the level of the marketplace is largely determined by the liquidity turnover it has and the list of NFTs it supports. Some marketplaces specialize in the sale of artwork, while others are more inclined to sell NFTs from other domains, such as in-game assets, avatars, or any other type of tethered asset.
The following is a list of the most prominent NFT marketplaces currently operating on the market.
Listing an NFT is not as difficult as creating one. But users need to be careful when they select the platform for listing and minting their NFT, as that choice will determine future income.