NFT Trading

NFT Trading: A Complete Guide For Newbies

15 min read

This article is for general information purposes only and isn’t intended to be financial product advice. You should always obtain your own independent advice before making any financial decisions. The Chainsaw and its contributors aren’t liable for any decisions based on this content.



NFT Trading: Since becoming Collins Dictionary’s 2021 ‘Word of the Year’, ‘NFTs’ or non-fungible tokens have been forced front and centre into mainstream consciousness. Chances are you came across the term when celebs were dropping millions on what looked like pictures of apes. Or perhaps you heard about them when iconic legacy institutions like Christie’s sold a US$69 million NFT. 

NFT artist Beeple’s ‘Everydays – The First 5000 Days’ NFT sold for a record $69 million

NFT mania truly took hold in 2021 and despite the market being significantly down in 2022, it’s clear that there is a cultural and utility-based element of NFTs that is here to stay. 

While some still believe that NFTs are pricey and somewhat silly images of monkeys, pixelated punks or tubby penguins, the truth is that there’s a lot more going on beneath the surface. NFTs are changing the game when it comes to art, collectibles, communities, membership, gaming and much more.  

24/7 fun

Much like all crypto markets, one of the most unique features of NFTs is that they are tradeable 24/7 globally. It’s crazy to think that a 16-year-old creator in Peru can sell an NFT at midnight to an NFT collector on the other side of the world at the speed of light, all while sitting in her PJs.  

And that leads us to the focus of this explainer – NFT trading. We’ll aim to give you the low down on everything NFT trading. There’s a fair bit to unpack but it’s pretty exciting stuff and well worth a deep dive. So sit back, grab a cuppa and let’s get down to it. NFT trading school is in session.

What is NFT trading? 

If you’re completely new to NFTs and keen to understand the basics, check out our ‘What is an NFT?’ explainer – it goes deep into what NFTs are all about and highly recommended for those just getting started. But if you’ve got a decent understanding already, a brief overview is probably good enough. 

Just to recap, an NFT is essentially a digital receipt on a blockchain linked to digital and physical assets, providing indisputable on-chain evidence of proof of ownership. This differs from traditional databases that are siloed and require a third-party intermediary to confirm ownership. Ethereum is the most common blockchain used, but a number of others are also utilised, most notably Solana, Tezos and others. 

The key thing with NFTs is that digital images, songs, videos, in-game assets and more can be tied to the ownership of an NFT that lives on an immutable blockchain. As a unique one-of-one creation, once on the blockchain, it cannot be altered – that’s the immutable part. 

With NFTs, the possibilities are endless – access to tickets for live or digital events, exclusive merch or even physical asset ownership (such as Rolls- Royce cars or real estate) are also possible via NFT ownership. By their very nature, NFTs allow people to create verifiably-unique digital goods that can be transferred almost instantaneously via the blockchain – much like any other crypto asset. Which leads us to the topic at hand – NFT trading. 


The long and short of it is that NFT trading is simply about matching buyers and sellers of NFTs on specialist marketplaces such as OpenSea, Rarible and Magic Edens. It’s much like eBay when it was mostly an auction site – a seller posts their NFT for sale at a certain price or via auction, and the willing buyer or successful bidder acquires it. In the process, the NFT is automatically transferred to the buyer and the platform takes a slice of the action. 

Each NFT is unique and it is important to understand that unless otherwise stated, when purchasing an NFT, you might not be buying the copyright or intellectual rights to any underlying assets. The answer, unfortunately, is that it depends from NFT to NFT. The Chainsaw looked into this controversial issue in its ‘What does NFT ownership truly mean, anyway?’ article

Despite originally being created in 2015, the launch of CryptoKitties proved to be a pioneer in forging a new frontier for NFTs. CryptoKitties is a blockchain-based game running on the Ethereum network where players breed, trade and adopt virtual cats. And it was that which laid the foundation for NFTs truly exploding in 2021. 

NFT Trading: A Complete Guide For Newbies
CryptoKitties kicked off the NFT craze.

Since the market went positively wild in January 2021, things have since stabilised, particularly after the crypto winter kicked during the middle of 2022. The graph below represents trading volumes of NFTs. The obvious insight is that 2021 was a year for the record books with US$25 million in sales volume. 

NFT Trading: A Complete Guide For Newbies
Total NFT sales volume 2017 – June 2022.

So what is it about NFTs that makes them so popular and ripe for trading? There’s a range of reasons depending on the nature of the NFT itself. Some ‘blue-chip’ NFTs are a cultural ‘flex’ of wealth or a display of membership to an exclusive group (such as Bored Ape Yacht Club). Others are about special access, perks or benefits, while some are arguably about having a laugh. 

NFT Trading: A Complete Guide For Newbies
CryptoDickbutts was created as a gag, but this joke is remarkably valuable.


But if you’re looking for a thread that binds most NFTs, it comes down to communities. NFTs are a fresh way to support artists, creators, musicians, businesses, athletes or bold ideas without permission from third-party intermediaries. 

Brands love them because they engage new audiences or the secondary sale of NFTs introduces new buyers into their ecosystems. 

With the conventional sale of digital products, creators are usually beholden to conglomerate third-parties and sometimes, their work is open to fraud. With NFTs, artists are able to profit directly without a cut being taken by record companies, publishers and distributors. Keen to learn more about that? The Chainsaw dove head-first into how NFTs were changing the game for artists in our NFT art piece.

So why is NFT trading so popular right now? For starters, it’s a new and innovative space attracting a ton of capital. That always helps. It’s also all over the news and has gained increased mainstream awareness.

They’re also fun and often aesthetically pleasing, far more exciting to the average person than an abstract concept like a share or stock. Some people are using NFTs as hedges against inflation — why buy government bonds when you can buy a zombie? But here’s the kicker, and this is probably what reels in a lot of the traders, NFTs are volatile. Traders love volatility because that’s where the profits are made. Not all NFTs are super bumpy, but the majority that are affordable to most normies are pretty wild – at least when compared to things like shares.   

How does NFT trading work? 

While non-fungible tokens (NFTs) can be used for a range of use cases — from tracking assets along a supply chain to providing evidence of authenticity of an IRL item, one of the main uses is for trading. If you’re wondering how NFTs are actually created, we’ve got you covered – we addressed that in one of our recent articles

Now for trading NFTs, the process is quite simple and intuitive, especially if you’ve dabbled with any share trading platform. But there are a number of significant differences that are not immediately apparent to the unacquainted. 

How to Trade NFTs – 5 Steps to NFT trading

Although trading might seem straightforward, in most cases an NFT cannot simply be bought via traditional payment methods such as via a bank transfer or through a debit or credit card. Let’s call that the rule of thumb. for example allows for the purchase of NFTs through traditional fintech rails such as credit cards, but typical NFT platforms are designed around Ethereum or Solana, and won’t accommodate your fiat currency.  

Most of the time, if you’re keen to get into NFT trading, you’ll need a crypto wallet for two reasons: to hold cryptocurrency to pay for the NFT and to securely store it after purchase. 

We’ve broken this down into a five-step process for creating, trading and storing NFT’s.

Step 1 – choose a crypto wallet

A software or hardware wallet are the two basic types of crypto wallets. Experienced traders will advise that a software wallet (usually a mobile or desktop application, known as a ‘hot wallet’) will generally suffice for short term trades, but a hardware wallet (a USB-like device like a Ledger, known as a ‘cold wallet’) is highly recommended for long-term storage of NFT assets.

Software wallets are more convenient and can easily be installed on your phone or computer, but are more open to attack as they are usually always connected to the internet. Security is therefore generally a weak point for software wallets. 

Hardware wallets are a physical device, completely isolated from the internet, thereby enhancing security far more so than software wallets. 


To illustrate these abstract concepts, we’ll walk you through a wallet that most people use for NFTs, MetaMask, a web-based crypto wallet extension or plugin that is as easy to install as any Google extension to your Chrome browser. In simple terms, it works as follows:

  • Install MetaMask on your browser. 
  • Create an account – you’ll be prompted to create a password and backup your seed phrase (a cryptographic 12-word combination that you can use to back up your crypto).
  • Deposit funds into your wallet address – you will need to have already bought the crypto assets from an exchange.  
  • Sign in to your NFT marketplace and start trading.

If you want to learn more about crypto storage options and the risks of leaving crypto on an exchange, The Chainsaw put together an excellent explainer that will set you off in the right direction. 

Step 2 – buy crypto

A handful of NFT marketplaces allow purchases using traditional payment methods, but OpenSea, being the most popular, only allow purchases using cryptocurrency. And this is the case with almost all NFT marketplaces. 

In terms of the crypto used as payment, Ethereum (ETH) leads the way and can be purchased on exchanges like Kraken, Binance or Coinbase using a debit card or bank transfer. Note that some marketplaces like Magic Eden use Solana (SOL). 

Step 3 – find a marketplace

There’s plenty of factors to consider when selecting a marketplace. And it also depends on whether you are a creator, or simply a trader. In all cases, it pays to do the work upfront and research what best suits your needs. Each has different policies in terms of transaction fees and royalties, as well as the blockchains they support. 

Most tend to stick to the largest platforms such as OpenSea or Rarible. If however you wanted to focus on SOL-based NFTs, something like Magic Eden would be much more suitable. 

At the end of the day, it comes to personal preference based on your own requirements. Always do your own research (DYOR).

Step 4 – mint an NFT (if applicable)

Of course, if you’re after a specific NFT or have already minted (created) one, then this step can be skipped entirely. But if you are wanting to sell your own NFT and it hasn’t yet been created, you’re going to need to go ahead and mint your NFT – the process of linking your digital asset in an immutable way to the blockchain. 

If you’re keen to dive deep into the process of minting an NFT – here’s where you should go to get started. 

Step 5 – buy or sell NFTs

Here the steps depend if you’re the seller or the buyer – but either way, trading involves both. You can buy or sell an NFT via a fixed price or through an auction. Different platforms have different features in terms of the types of auctions and how they can be set up. 

They can be timed or without any deadline. There’s also a type whereby the price is set and it drops at a fixed rate at fixed intervals – a Dutch auction. As with any type of auction, NFTs most often have a floor price, namely the reserve or the minimum sales price accepted.  Briefly, there are three main ways NFTs can be sold :

  • Fixed price –  users can list an NFT and a sale price, then define a duration for the listing and cancel at any time.
  • Classic auction – price starts from an initial bid or the reserve price if set, and the seller can choose to accept the highest bid at any time.
  • Dutch auctions – NFT seller begins with a starting price and an ending price, and the auction starts from the highest price. The auctioned item’s price will be gradually decreased across the duration until a buyer is found.

Upon meeting the asking price or hitting the highest bid in an auction above reserve price, the NFT will automatically be transferred into your wallet. 

The process of exactly how to create, list and sell NFTs is nicely outlined in our ‘What is an NFT?’ guide

Where is the best place to try NFT trading? 

Technically, there isn’t a ‘best’ as it comes down to personal preferences, needs and circumstances. OpenSea is the most popular and most widely-recommended NFT marketplace, boasting over 1 million active user wallets. The user-friendly and simple design make it an attractive option for most NFT trading newbies.

There are however plenty of other alternatives such as Rarible, Mintable, Foundation, MakersPlace, LooksRare, Nifty Gateway and others. The key is finding one that meets your needs as each has different structures relating to the blockchain (ETH, SOL or others), payment mechanism, fees (gas), auction styles and royalties. 

Some projects only exist on Ethereum blockchain, while others, like Magic Eden, exist on the Solana blockchain. Each chain has a respective wallet — Ethereum syncs with Metamask, while some Solana-based projects on Magic Eden sync with a Phantom wallet (Magic Eden has recently launched on Ethereum, so your MetaMask works for some projects too).

Why you should be careful when NFT trading 

Much like the entire crypto space, the NFT space is similarly vulnerable to hacks, scams and exploits given that it is a new concept many people still don’t understand. And when people don’t understand things, they are unfortunately much more prone to succumb to scammy stuff.

The most common is a ‘rug pull’ where a project creator sells an NFT collection with a promising roadmap and then disappears with the funds. Another is a phishing scam where hackers gain access to the victim’s crypto wallet through dodgy links to fake NFT marketplaces. 

The key is to do your own research on any project. Is the roadmap realistic? Are the founders doxed – crypto lingo for ‘their real names are public’ – and do they have a track record of delivery? If it seems too good to be true, it probably is. 

Always be aware of fake NFT giveaways and be on the lookout for sneaky tricks designed to give others access to your assets. And this is the number one rule: never ever give out your wallet seed phrase, that’s crypto rule #1. Projects will never DM you to ask for this kind of information. 

Where to Trade NFTs 

Selecting a marketplace depends on what you’d like to focus on. Some marketplaces are exclusively for NFT art pieces, while others offer gaming NFT’s like avatars, land or wearables. Some are niche and others more generalist. 

There’s plenty of options out there, but the key is to make sure that there is sufficient demand for the types of NFTs you are wanting to trade. What you’re looking for is liquidity, trader lingo for an active market of buyers and sellers. Low levels of liquidity means that there is probably not much demand. 

There’s plenty of choices, but if in doubt, you can’t go too wrong with the major marketplaces such as OpenSea or Rarible.  

Top NFT Marketplaces Reviewed 

Keen to get cracking in your NFT trader journey? Below are a few marketplace reviews to help you decide which platform may be most suitable for your needs.


The most popular and widely-recommended NFT marketplace, OpenSea, leads the way as the top marketplace globally as measured by trading volume. Users can mint, buy and sell NFT’s from digital artwork to virtual worlds, trading cards or whatever they like. 

OpenSea deducts a transaction fee of 2.5% for every sale you make on their platform. This excludes gas fees payable for confirming the transaction on the ETH network.


This marketplace supports three blockchain networks: Ethereum, Flow and Tezos. With more than 1.6 million users and over 400,000 NFTs, Rarible’s trading volume is approximately US$274 million. Similar to OpenSea, a custom mobile app is also available, as well as via the web.


LooksRare is a well-supported platform established in January 2022 where NFTs can be bought, sold or traded. Presently, it only supports the Ethereum blockchain and it attracts a 2% sales fee on all NFT sales. 

One of the key differentiators with LooksRare is that it actively rewards users of their platform. Traders, creators and collectors are all eligible to earn LOOKS tokens, making LooksRare a great option for ambitious NFT enthusiasts keen to speculate on the value of its token. With exponential growth over a short period of time, LooksRare is becoming a key player in an established marketplace.

Everyone has different preferences in terms of their platform of choice and users are encouraged to always do their due diligence as to which is most suitable to their needs. There is no ‘right’ answer, only one that works for you. 

Why trade NFTs? 

For most people, it is about making money (hopefully), but also to have fun in the process and be a part of the burgeoning NFT community. Most NFTs are regarded as being pretty far out on the risk spectrum. 

The lesser known and early-stage NFTs present the greatest potential return, however they also carry the highest risk of failure and value collapse. Whereas crypto is volatile compared to the stock market, NFTs are even more so than crypto. Only you know your risk appetite.

How to make money from NFT trading? 

The old adage of ‘buy low, sell high’ certainly applies when investing in NFTs. Naturally, nobody has a crystal ball and can predict which NFT projects are going to shoot to the moon, and which are going to collapse or end in a rug-pull. The more you research the NFT project, the higher your prospects of success. But remember,  everything is easy to predict with hindsight – in reality, it’s impossible to know anything for certain when it comes to trading and investing.  


However, there are some things that you can do to optimise your chances of success. For newbies looking to become successful NFT traders, there are a couple things you can do to maximise the chance of turning a profit: 

  • Getting into an NFT project early – doing so preferably at the mint stage gives you access to projects at a much lower entry point. It’s not just what you sell it for, it’s what you pay for it that counts. Some people got into CryptoPunks for a few dollars in 2017 and today they’re smiling. 
  • Community is key and the reason why the most valuable NFT collection the Bored Ape Yacht Club is so successful. When deciding on a project to invest in, look out for a community that’s doing its best to represent the collection. The more engaged and growing a community is, the better the chances that it will succeed. Without a community, NFT collections stand little chance of going to the moon. 
  • Investigate the nitty gritty detail. Has the project laid out an achievable roadmap? Quality over quantity is the name of the game when reviewing a roadmap. Who are the founders and are they well-known? Is there venture capital backing the project?

These are just some of the more important considerations to make in selecting an NFT to trade. If you do your due diligence you give yourself the best chance to buy an NFT that grows in value and one that you can successfully trade.

NFT trading hours 

The NFT marketplace universe is open 24/7 which makes buying or selling via the exchange of your choice possible at your convenience.

But do note that if an NFT project is still to be minted, a set date and time will be communicated. In that case, it’s imperative to ensure you’re online and ready with ETH/SOL loaded in your crypto wallet so you can pounce once the NFT is dropped.

NFT price movements 

NFTs are priced and traded in crypto – most commonly ETH and SOL – so in that sense, crypto and NFTs are intrinsically linked together. The underlying cryptocurrencies in which NFTs are priced also fluctuate, creating a unique dynamic.

There are situations where an NFT’s value in ETH terms can decline over a period but on a dollar basis, it can be up. And the opposite can be true (especially in bear markets) where the price in ETH terms is up but in dollar terms is significantly down.

Crypto and NFTs are both volatile, so violent price movements up or down are fairly typical. Don’t be scared, volatility is good for traders. 

Is NFT trading safe? 

Due to the Wild West-ish nature of the space, there are plenty of ways for scammers to take advantage of unsuspecting victims. Here are some guidelines to follow to protect yourself and avoid losing your assets:

  1. Be careful before buying – make sure that the URL is pointing to the actual website you’re using for the purchase.
  2. Avoid “free” airdrops – scammers often create a fake giveaway or free airdrop which activates security exploits in the NFT contract when you authorise the transaction. This enables the crooks to access your crypto wallet and steal your assets.
  3. Never share your wallet seed phrase with anyone and avoid storing it online. Hackers can easily access and steal all your wallet assets after getting hold of your seed phrase.
  4. Refrain from opening files or clicking links in emails from unknown senders. Viral scripts or fake exchange sites can target your wallet, stealing assets.

And then lastly, always do your own research (DYOR). Rug-pulls have been known to occur and even if you have honest actors creating projects, there’s always a chance it can go to zero. 

Why NFT trading is here to stay

NFTs are here to stay. Sure, the mania may have died down but there are elements that are going to stick forever. Fundraising, community, art, collectibles, members, gaming and much more are all being disrupted in real time.

With the rise of user-friendly and cost effective NFT marketplaces and protocols, and the growing demand from the gaming industry in particular, NFTs are certainly here to stay. 

One thing though is for certain, while pictures of apes and punks may not be in the headlines in the years to come, NFTs are now baked into our culture and will find new and exciting applications as the technology develops. Nobody knows for certain what will stick, but for those involved, it’s a thrilling time to be alive.