In 2017, drawings from the CryptoPunks collection were handed out for next to nothing. After 4 years, the price of the characters reached hundreds of thousands of dollars. The most expensive was sold at Sotheby’s for $11.75 million. The “Covid” token #7523 (Alien) was added to the collection of the main shareholder of DraftKings, Shalom McKenzie. In 2022, anyone can create and sell a digital painting in the form of an NFT token. Paying buyers should be looked for on industry marketplaces.
The concept of an NFT token
Non-fungible tokens have become one of the hottest trends in the crypto industry in 2021.
According to Chainalysis, by the end of December 2021, $40.9 billion was blocked in the NFT segment. For comparison, analysts at UBS and Art Basel estimated the global art market at $50.1 billion.
The popularity of digital artifacts has attracted a large number of retail investors to cryptocurrency exchanges. Chainalysis calculated that almost 75% of transactions in the segment accounted for transactions up to $10,000.
An NFT is an asset that registers the ownership of a digital object on a blockchain. It can be compared to a certificate of ownership of a value:
- Artistic work.
- Music track.
- Collectible items (stamps, cards, badges).
- Jewelry, etc.
In the open blockchain, all tokens can be replaced with the same ones. But NFTs work differently. Each such asset is unique and contains identifying information recorded in a smart contract. It can be sold, exchanged, or stored. Unlike cryptocurrencies, which have the same properties and value, it is impossible to pay with non-fungible tokens.
To sell a digital painting as an NFT token
First, you need to create a work. It could be anything:
- Virtual landscape.
The main condition is uniqueness. But in order for the work to find its buyer, it is necessary to focus on the market. NFT technology is 90% supported by the crypto community. This is a separate category of traders and investors with their own values and their own economy. To understand them, you need to “cook” in this environment: follow the news, participate in chats, and communicate with those who have experience in creating and selling digital items.
You can create one NFT token or a whole series. The most successful collections in 2021:
- RTFKT Capsule Space Drip – The team released 152 3D characters with audio. Lots were sold at a price of 4.4 ETH ($17.7 million at the exchange rate of December 2021). In December 2021, the studio was bought by Nike. The price of the transaction was not disclosed.
- Galaxy Eggs is a set of 9999 metaverse eggs with a futuristic design. The annual volume of sales of digital objects on OpenSea amounted to 13.8 thousand ETH ($55.2 million at the exchange rate of December 2021).
- Clon X, a series of 20,000 avatars, was sold in November for more than $100 million.
In 2022, NFT technology is supported by a number of blockchains:
- Binance Smart Chain (BSC).
- Polkadot and others.
In 2022, there are a large number of trading platforms on the market that host different types of digital art collections. Marketplaces (Opensea) work with many categories. Other sites (Rarible) help sell NFT tokens in certain niches: art, and games. Here are a few factors to consider when choosing a digital item trading platform:
- Liquidity. The value of NFT objects is determined by users subjectively. Therefore, the resale of lots can be difficult. Some marketplaces offer their own solutions to increase the liquidity of assets. For example, Binance creates a natural bridge between trading and NFT platforms.
- Transaction fees. At different sites, transaction fees are 2.5-15%. This amount includes gas fees, and deductions to the service or the author.
- An experience. The first NFTs were seen as collectibles. In 2021, their functions have expanded. For example, Decentraland and Axie Infinity have created new ecosystems where members can trade and exchange value regardless of the platform.
How to assign an NFT token to a work
To convert the picture to digital format, you need to connect the wallet to the selected platform. Different markets support certain types of storage. Metamask, Trust Wallet, and others are suitable for Ethereum -based services. In 2022, NFTs are traded more frequently on OpenSea. The Generalist estimates that this platform holds almost 97% of the market. On Opensea, it is easy to transfer a picture to an NFT token:
- Register an account. On the site, you need to select the Create function, and in the drop-down tab – Submit NFTs.
- Create a new collection. You should click Create a new collection. Then you need to come up with a name, description, and logo.
- Download objects. The platform works with JPG, PNG, GIF, MP3, MP4, SVG, WEBM, WAV, GLB, OGG, and GLTF files. The allowable size is 100 Mb.
- Confirm the operation. You need to click Add New Item. Then you should accept the user conditions. For a better ranking of the lot in the search engine, you can describe its properties or add statistics.
Minting a non-fungible token on Opensea is completely free. To sell a digital painting, you need to activate the Sell function. Some services offer to fill out a trade request at the generation stage (Rarible).