NFTs, or Non-Fungible Tokens, have taken the digital world by storm, and NFT marketplaces are quickly becoming a popular way for creators to sell their unique digital assets. NFTs are digital assets representing ownership of an individual item or piece of content, such as digital art, music, videos, or even virtual real estate. Unlike interchangeable cryptocurrencies, which have the same value, each NFT is unique and can hold significant value.
NFT marketplaces provide a platform for creators to sell their NFTs to buyers, and they can generate significant revenue in the process. While some NFT marketplaces focus on art or collectables, others are more specialised, catering to specific niches such as sports or gaming. But how can one make money with an NFT marketplace? This article will primarily discuss the key strategies for monetising an NFT marketplace.
However, before exploring ways of making money with an NFT marketplace or monetisation strategies, let us take a cursory look at what NFTs are, how they function, and how they can be created.
What are NFTs and how do they function?
NFTs are digital assets that are unique and cannot be replicated. They are based on blockchain technology and are stored on a decentralised ledger, making them secure and transparent. NFTs can represent any digital asset, such as artwork, music, videos, or even virtual real estate.
NFTs function through smart contracts, which are self-executing contracts with the terms of the agreement between buyer and seller being directly written into lines of code. This means that when an NFT is sold, the transaction is recorded on the blockchain, and the smart contract automatically transfers ownership of the asset to the buyer.
How to create NFTs?
Creating an NFT requires some technical knowledge, but it can be done relatively quickly with the help of NFT marketplaces. Here are the steps to develop an NFT:
Step 1. Choose a blockchain platform – Ethereum is the most commonly used platform for creating NFTs.
Step 2. Create a digital asset – This can be any digital asset, such as artwork, music, or video.
Step 3. Mint the NFT – Minting an NFT means creating a unique token on the blockchain that represents the digital asset. This is done by using a smart contract.
Step 4. List the NFT on a marketplace – There are several NFT marketplaces where creators can list and sell their NFTs.Now that you’ve grasped how NFTs are created, let’s move on to the blog’s primary focus – NFT Monetization Strategies.
Key strategies to monetise an NFT marketplace:
There are several ways of making money with an NFT marketplace. Some of the critical monetisation strategies include:
Charging transaction fees – NFT marketplaces can charge a transaction fee for each sale made on their platform. This fee can be a percentage of the sale price or a flat fee. Transaction fees are the most common way for NFT marketplaces to generate revenue. They are a simple way to make money and provide an ongoing source of income for the market.
Offering premium features – NFT marketplaces can provide premium features to creators, such as priority listings, enhanced marketing, or exclusive access to specific buyers. These features can be offered for a fee, generating additional revenue for the marketplace. Premium features can help creators stand out in a crowded marketplace and provide an incentive for creators to use the platform.
Creating a secondary market – NFT marketplaces can create a secondary market where buyers can resell their NFTs. The marketplace can charge a fee for each transaction made on the secondary market. A secondary market can increase the liquidity of NFTs and create a more vibrant marketplace. The marketplace can generate additional revenue by charging a fee for each transaction.
Partnering with brands – NFT marketplaces can partner with brands to create branded NFTs, generating significant revenue. Brands can offer limited edition NFTs to their customers, providing an exclusive experience and creating additional demand. A partnership with a well-known brand can also promote the marketplace and attract new users.
Utilising affiliate marketing – NFT marketplaces can offer affiliate marketing programs to influencers and content creators. These programs allow affiliates to earn a commission on each sale made through their referral link. Affiliate marketing can be a powerful way to attract new users to the marketplace, as influencers and content creators can help to promote the platform to their followers.
Creating exclusive drops – NFT marketplaces can create exclusive drops of NFTs, where a limited number of NFTs are released at a specific time. These drops can create a sense of urgency and exclusivity, driving up demand and the price of the NFTs. By building exclusive bubbles, the marketplace can generate significant revenue quickly.
NFTs have created a new market for digital assets, providing creators with a new way to monetise their work. NFT marketplaces can generate significant revenue by charging transaction fees, offering premium features, creating a secondary market, partnering with brands, and utilising affiliate marketing. As the NFT market continues to grow, there will be new monetisation opportunities, making it an exciting time for creators and marketplaces alike.