It wasn’t that long ago non-fungible tokens (NFTs) were not a part of the mainstream lexicon. Even fewer had actually created or ‘minted’ an NFT. A lot of people though are keen to learn how to make money making NFTs. This is your comprehensive guide on making NFTs and much more.
While the first NFT was created in 2015, the whole concept didn’t really gain much traction until the crypto bull run of 2020/21. And then it took off at a pace that almost nobody could have predicted. From just over US$40 million in 2018, NFT sales peaked in 2021 at US$25 billion. A lot of people were making money from NFTs.
Things to consider before you get started.
The sheer scale of investment and activities has led many to enter the NFT market and inspired entrepreneurs, artists and creators to launch their own projects. But if you’re crypto-curious and interested in minting your own NFT, there are quite a few things you’ll need to know out of the gate. But don’t fear, it’s not as difficult as it sounds. Years ago, it would have required some technical know-how to design and launch an NFT, but today, the user experience of NFT marketplaces is optimised for beginners, making it super simple.
In this explainer, we’ll address the fundamental question you may be asking: how do you create an NFT?
What is an NFT?
NFTs are blockchain-based digital assets that represent ownership of digital media including art, music, videos or even memes. The words ‘non-fungible’ means something which cannot be replaced or exchangeable with another of equal value – similar to a plot of land or a second-hand car – no plot of land or car is exactly the same as another. Money is a different story – it is fungible because a $5 note is the same as any other $5 note. The same goes for Bitcoin or Ethereum.
An NFT though is non-fungible since they are unique, one-of-one and only the true owner has the ability to prove ownership via the blockchain. Each NFT has a unique code or address that exists on the blockchain, which can be thought of as an online digital ledger or database that records transactions. Some have described NFTs as certificates of ownership of digital media.
Misconception
A common misconception though is that NFTs are just JPEGs. They can be, but they can much more than that, depending on the data associated with the unique asset. The most important thing to remember is that an NFT is the digital proof of an asset that can be transferred from one wallet to another, and are most often used by businesses and artists to create a certificate for experiences, membership, or connected to IRL physical items to guarantee proof and more. Art is just the beginning and is arguably what put NFTs on the map.
“People don’t understand NFTs, the Metaverse, and crypto today the same way they didn’t understand online shopping in the 1995”.
Anuj Jasani, online entrepreneur
With the basics out of the way, let’s take a look at some of the factors to be aware of when minting an NFT – call them whatever you like – tips, tricks or lessons from those with experience.
Minting your NFT doesn’t guarantee it will sell
Since the barriers to entry are pretty low, it means that it is a highly competitive market out there. To have a chance of selling, you need to get your creation in front of eyeballs. The million dollar question is: how do you get people to take notice? Making money from NFTs doesn’t come easy.
In part, it comes down to marketing, but at the same time, it’s about value. If you aren’t providing value for others then you may never sell your NFT. Value could come in several forms such as a physical product, service or even a perk of some sort like exclusive access.
The more unique and creative the NFT, the better the chances of success – but the point remains, there is no guarantee anyone will buy it.
Creativity and value is key to minting successful NFTs
One of the common threads of successful NFT projects (NFT projects that have made money) is that they demonstrate high degrees of creativity and value to users. The Bored Ape Yacht Club (BAYC) is one such often confusing example. From the outside, they appear as expensive JPEGs. They’re also a token that grants access to things like votes, IRL events, or the rights to reuse BAYC intellectual property (IP). BAYC also launched ApeCoin and distributed it to its members, and as the project increased in awareness and value, as did the value of the coin for its holders.
Or take a collection such as World of Women that aimed to help women and the underrepresented find an aligned community and feel empowered to have a greater voice in the crypto ecosystem. Beneath 10,000 NFTs is most often thousands of unique individuals. Community lies at the heart of most successful NFT collections, which in turn is formed through a shared narrative, story or idea.
Value?
Is your NFT creative and/or valuable? Here are some questions to ask yourself before minting your first NFT:
- Is your NFT visually appealing and unique?
- What are you offering to your consumer?
- What is your unique selling point relative to other NFTs?
- What’s your value proposition?
- Is there demand for an NFT like the one you are envisioning?
- How can you present your NFT in a creative way to make it stand out from others?
- Are you creating NFTs just for the money or is there a bigger purpose you can weave in?
- What does your roadmap look like? See an example of an amusing but strategic roadmap here.
Sometimes NFTs pop off for no apparent reason. Others have tons of marketing budget behind them and shortly after launch, collapse. It’s not always obvious what makes a collection go viral. Tap into the culture and with a bit of forethought and luck, you are in with a chance to create a successful NFT.
You may have to pay fees (gas) to mint
There are numerous marketplaces to mint your NFT and each relies on different blockchains with different fee structures, as well as policies in relation to the gas fees used to mint the NFT. The gas fee is basically the blockchain transaction fee paid to network validators for their services to secure the network. And gas fees range tremendously depending on the blockchain and the demand. Ultimately, it comes down to your specific goals and budget. Most NFT marketplaces will require you to pay the gas fee but some such as Mintable will absorb that cost.
A blockchain like Ethereum is the most popular, but NFTs are also created on Solana, Tezos and Flow. Ethereum NFTs tend to have the highest fees associated with minting , at least compared to lower-cost alternatives such as Tezos and Solana. It’s up to you to figure out what suits your pocket and NFT plans.
Minting your own NFT is easy
Minting your own NFT may seem like a difficult concept to wrap your head around but it’s actually very simple, thanks to the slick user interfaces on marketplaces such as OpenSea, Rarible and others.
At a high level, first you need a crypto wallet loaded with your blockchain’s accepted cryptocurrency for transaction fees. Then, it’s as easy as uploading your desired media file, writing any terms for your smart contract and setting a price. If you can use Amazon or eBay then you can create your own NFT.
You can make an income creating NFTs
As NFTs and Web3 technology continue to evolve, you may find yourself wondering if you can make a liveable income creating and selling NFTs. The answer is yes, it can be achieved, however there is a lot of work to be done.
Most creators who are able to earn a living creating and selling NFTs have a reputable brand and/or business. That approach allows you to tap into an already-engaged market. This is the strategy taken by brands such as Gucci, Adidas and many others who have leveraged their powerful brand to launch an NFT collection to their fans.
Trying to launch an NFT first without an existing audience is definitely the more challenging route to earning an income from NFTs. This isn’t to say it isn’t possible, but it’s a serious slog.
How to make an NFT in 6 easy steps
We’re not going to reinvent the wheel here and go into detail as to how to trade NFTs on various marketplaces – The Chainsaw has previously put together a guide which covers that, among a whole lot of other stuff. Instead, let’s focus on the steps you’d need to turn your creation into an NFT reality.
Step 1. Create an image or a series of images
The first thing to do is to identify the unique digital asset that you wish to tokenise – you could go for a meme, GIF, painting, video or anything in the digital realm that your mind can conceive. There’s plenty of NFT creation tools available that can do the job for you if you aren’t especially skilled at creating one from scratch.
These include things like SketchAR or Fotor NFT Creator. If you’re up for a wild 3D image, you can download ready-made 3D models from marketplaces such as CG Trader.
But take note, NFTs go far beyond just that. An NFT is indisputable evidence of ownership of a unique asset which can include music, a mechanism for fundraising, in-game assets, collectibles, membership and even boring stuff like a vaccine passport. The possibilities are endless.
Step 2. Select a marketplace
To find the right platform for your NFT, you will need to do some research on each as they all have different features in terms of the blockchains supported, the fee structure and flexibility around pricing your creation. Your choice will ultimately come down to your individual circumstances, experience, knowledge and strategy. As with anything in Web3 – do your own research (DYOR).
Most choose the Ethereum blockchain as it is the most well-supported, but it does have higher transaction fees. This has led creators to lower-cost alternatives such as Tezos or Solana. Gas fees fluctuate based on demand, so aside from budget, there is also a timing factor to take into account.
And then you could think about how to price your NFT. If you want to make money from you NFT, you should think carefully about this. Some opt for a simple fixed price, others a traditional auction, whereas others yet choose something like a ‘dutch auction’ where the price starts high and declines at fixed intervals. There’s a lot of variables to consider, so think about these when choosing your marketplace.
Beginners
For beginners, it’s best to stick with the tried and tested platforms which have the most sales volume and have proven to be the most reputable over time. These include:
- OpenSea
- Magic Eden
- LooksRare
- Rarible
- Mintable
- Crypto.com
- OKX
For the remainder of this explainer, we are going to assume that you will be using the most popular marketplace, OpenSea. This doesn’t change the fact that the same steps apply to all platforms, although there may be some minor differences in the user interface. Remember, the principles are pretty much the same, it’s just the aesthetics that vary from platform to platform.
So first up, you’ll need to sign up – it’s free. There’s no know-your-client (KYC) requirements and you don’t need anyone’s approval to list an NFT for sale. That’s right, no proof of identity or address or the kind of stuff that banks generally want. That enables you to be anonymous or choose an online pseudonym if you’re so inclined. Coupled with low barriers to entry, this is one of the reasons you’ll find a ton of digital creations on marketplaces that nobody will ever buy.
Step 3. Set up your wallet
On OpenSea, click on the user icon (top right) and then click on ‘Profile’. On this page, you will be able to connect your Ethereum wallet to the NFT marketplace. OpenSea lets users connect most of the popular crypto wallets, including Metamask, Coinbase, Trust Wallet and many more.
In the spirit of sticking with the most popular NFT marketplace, for the remainder of this section we’ll also stick to the most widely-used wallet, Metamask. But don’t worry, the fundamentals remain exactly the same for any of the other supported wallets.
Step 4. Mint NFTs
Each marketplace will provide step-by-step instructions for uploading your digital file, including OpenSea. It really is super straightforward and intuitive. By following the process, you will be able to mint your NFT turning your digital creation into a non-fungible token that can be traded. Put differently, NFT minting is the process that transforms a digital file into a blockchain digital asset. Being blockchain-based, once minted, it is immutable meaning it is impossible to modify, delete, or edit the digital asset as registered on the blockchain.
Complete all fields and click ‘Save’. Now, you’re ready to begin the actual minting of your new NFT. Click on ‘New Item’ to load your creation and provide all the important details. At the bottom, click on ‘Create’ once you are ready to make the magic happen. And there you have, you’ve got your NFT.
Now comes the fun part, selling your NFT.
By now you have successfully created an NFT and can sell it on OpenSea. You can choose which Ethereum tokens to accept as payment. Furthermore, you can also choose to sell at an auction or fixed price.
Step 5. Get ETH and load wallet for listing the NFT
Most NFT marketplaces require an upfront payment to list your NFT – including OpenSea. Note that they might differ from platform to platform – highlighting the importance once again of doing your own research to choose the one that most fits your needs.
In the case of OpenSea and the majority of platforms, users are required to pay a fee designated in cryptocurrency for listing their digital asset on the marketplace. This naturally means that you will need to purchase some cryptocurrency and load it onto your chosen wallet.
In the case of OpenSea who charge fees in ETH, you will need to ensure that you have some ETH available in your digital wallet to list your creation.
Step 6. Set up the sale process
You’ve now created your NFT, now you have to set up the sales process.
On OpenSea, click on the account icon (top right) that says ‘My Collections’. You will see your recently created NFT. Click on the desired collection, then on the particular NFT where you’ll have the option to click on ‘Sale’ at the top right.
Depending on the platform used, you can select from a few different sales processes:
- Fixed cost – this involves setting a fixed price,sold to the first bidder who meets the asking price.
- Timed auction – the NFT will take bids within a set time frame and be sold to the higher bidder.
- Unlimited auction – there is no time limit. Instead, you can end the auction at any time.
- Dutch auction – here a price is set and it declines at predetermined intervals until the price is reached.
When setting up an auction, you first need to decide the minimum price (known as a floor price). You’ll also need to set your royalties so that you can receive payments in perpetuity – these being payments received for any future sales of the NFT itself.
Timed auction
Furthermore, if you go the route of a timed auction, you need to decide on the duration. And then you need to be smart about price. While taking into account transaction fees which vary based on demand in the market, it’s worth spending time thinking about how you can price your NFT to maximise the sales price. Too low and you’ve left money on the table, too high and you won’t be able to achieve your asking price. In pricing your NFT, always take into account fluctuations in gas fees as a failure to do so can completely erase any potential profit.
After you complete this process, your NFT is listed and available for purchase. Congratulations – but now the work begins to get people interested, marketing. Without eyeballs or an audience, you run the risk of being one of thousands of NFTs that get zero views.
How much does it cost to make an NFT?
In an ideal world, we could provide an exact figure for the costs of creating an NFT. Unfortunately, that’s not how it works.
The gas fees, best thought of as the fees to publish your digital creation on the blockchain, vary tremendously from blockchain to blockchain, all of which are impacted by demand. They can be as low as $1 or be as high as $900 in some extreme cases. Do your own research based on your chosen platform and budget. ETH is generally the more pricey blockchain and has seen gas prices surge at times when demand is high. Others such as Tezos are less popular, but have lower gas fees on average.
In addition, most platforms won’t charge you a fee to list your NFT on the exchange, but they will capture a transaction fee if you are successful in selling. OpenSea charges 2.5% per transaction as an example.
How long does it take to make an NFT?
Depending on your experience and familiarity with the NFT platform, it can take less than 30 minutes or several hours to make an NFT (or mint one as it is known. Note that this isn’t the time it takes to sell, just the time it takes to get the creation onto the blockchain and listed available for sale.
Making NFTs can be a profitable investment
NFTs can be used in a variety of ways to make money, but do note, they aren’t quick-and-easy ways to make a fortune. The more you know about them and how they operate, the greater the chances are that you will be successful. But you should know upfront, making money from NFTs isn’t easy.
NFTs range from being utterly useless to enormously valuable. It’s not always easy to tell which is which. The more effort you put into researching, and creating a viable value proposition, the more likely you are to succeed. Like any investment though, there are no guarantees. But make no mistake, there is an opportunity to make money from NFTs.
How to make money from NFTs
There’s certainly no one-size-fits-all approach to making money, and the same applies to NFTs. People have tried a bunch of different ways to make money from NFTs, with varying degrees of success. The art and science of turning a profit in non-fungible tokens warrants a discussion in itself, but in this case, we’ll just highlight some of the most popular strategies.
- Invest in promising new NFTs early
- One of the best ways to make money on an NFT is by investing in promising new collections early before they skyrocket in value.
- A perfect example is CryptoPunks which traded between US$1 and US$34 until 2021, with one now valued as much as US$24 million.
- NFT HODLing
- A popular strategy in crypto is to buy and then hold with a view to potential sell in the future.
- Recognising an NFT’s potential early enough and then holding for long periods of time without succumbing to the temptation of selling can prove to be profitable.
- Flipping NFTs
- ‘Flipping’ is a popular profit-generating strategy which relies on buying low and selling high. The idea is to get in early and then sell when the market is running hot. Easier said than done, but it’s proven effective for some investors.
- Invest in an early play-to-earn NFT project or game
- Since NFT holders are awarded reward tokens which can be exchanged for fiat currency, that can be a good way for investors to realise profits.
Examples of an NFT
NFTs come in a variety of forms, from static images through to high-quality videos or even QR codes. They can even represent things like food or luxury items that travel along the supply chain backed by blockchain. Some are the front-end of a contract that actions things like purchasing a tree to grow. Once purchased, the money can go directly to a specific project.
