How to Start Selling NFTs on Any Blockchain?
11 Feb 2022
5 min read
Do you have a fantastic NFT idea and want to create your own collection? This article explores the three most essential aspects of NFTs that make them so popular and why socials matter to kickstart your project. It’s also important to know how to price your NFT and which selling mechanism you should use.
But first, which three aspects make NFTs so popular?
Why are they so popular?
NFTs have been popular for several reasons. One of the main selling points is the community bonding when you buy an NFT. You become part of a group with a similar interest in a project. It’s a way for many to show their commitment to a particular project or artist.
For instance, Algorand has the popular MNGO project that quickly became a blue-chip NFT project for its ecosystem. Many people bought an NFT from this art series to show their commitment to the project and the Algorand blockchain, using it as their profile picture and even mentioning the mint number in their Twitter bio.
Moreover, you can unlock exclusive rights when buying an NFT. You can access invite-only Discord channels or private events only accessible to NFT holders. In other words, an NFT project rewards its community with exclusive rights.
Besides the community aspects, you should consider the monetary aspects. First of all, art investors can flip NFTs to make a profit. Many investors opt for blue-chip projects because they have a higher potential to increase in value quickly. However, some projects reward NFT holders with specific drops. For instance, a recent NFT project I bought decided to start dropping eggs. These eggs you can hatch to get a new NFT. It’s a different way to reward NFT holders and make a profit.
Lastly, NFTs have a utility aspect (product value). They can unlock specific features or game modes within games.
NFTs are an excellent way for artists to monetize digital art and build up an online community or fanbase. Also, most NFT standards or marketplaces offer built-in royalties. An artist is paid royalties whenever an NFT gets sold on the secondary market.
So, what should you consider when creating an NFT project?
How to create an NFT project?
First of all, make sure to set up all your socials. The most considerable portion of NFT sales happens via exposure on social media, especially Twitter. It also allows an artist to build up a community quickly within the blockchain ecosystem they have chosen.
Further, you can use your social media influence for price discovery. Finding the right selling price for your NFTs is crucial for the success of your project. Set a too high price, and you won’t sell a single NFT. Twitter is ideal for hosting giveaways or live auctions to gain followers and find the right price to sell your NFTs.
While Twitter is a great place to get started, you need a more dedicated medium to communicate with your community. Most projects use Discord to gather their community and host events and competitions for NFT holders. It’s also an easier way to spread knowledge and updates about the project.
A successful NFT project requires an exciting proposition. Some projects provide cool mechanics users can explore with their NFTs. Therefore, not only the art style matters but also the mechanics (product value) you offer and what users can do with your NFT.
Other projects focus on social good by contributing a percentage of their sales revenue to charities. A recent World Bank report claims that people are more likely to donate when they are incentivized. For example, they receive an NFT in return even if the value is not equivalent to their donations. Digital art can create and sustain movements in ways that physical art cannot. Moreover, digital communities can organize themselves quickly and raise large amounts of capital through NFT projects.
In short, focus on building an initial community and offering an interesting proposition for NFT investors. Hosting an airdrop is a great way to build up this initial community quickly.
How to price your NFT artwork?
Many artists make the mistake of overpricing their NFT too quickly. Be patient with increasing your price. You want as many people as possible to buy into your NFT collection to build an initial community. This initial community will act as ambassadors for your project, tweeting about their purchase or using the image as their profile picture. This way, your project gains credibility. Over time, you can gradually increase the price of your minted NFTs.
However, it’s important to mention the total number of mints for your collection upfront. Many projects prefer not to mention a fixed number of NFTs they will mint. Not providing this information makes it harder for NFT investors to value your project because they don’t know the total supply you will mint. Therefore, it’s recommended to mention this number upfront.
What else matters when pricing an NFT? As mentioned in the previous section, the mechanics or product value matter. What can an NFT holder do with their NFT? Can they stake their NFT and receive certain rewards? Do they get access to exclusive events or giveaways? Some NFT projects try to make a deal where holders get first access to a token offering or airdrop.
And lastly, the NFT’s price is influenced by its quality and art style. In the end, you want NFT investors to like your NFT. It’s a crucial element for selling something. If your art style doesn’t attract art investors, they most likely won’t spend time exploring the product value.
What’s the best selling mechanism for NFTs?
There are different selling mechanisms to price your NFTs. Let’s take a look.
- Fixed price: It’s the simplest mechanism to implement. You set a fixed price for your entire collection, so investors know how much they must pay for each NFT. It doesn’t provide much flexibility but investors often like a fixed price per NFT.
- Bonding curve: Using a bonding curve-type pricing model, NFTs get progressively more expensive. For instance, the first 50 NFTs are sold at a base price of $50. Then, each ten following NFTs are sold 20% more expensive. This model incentivizes investors to buy in early projects. Also, it rewards early adopters with the possibility to flip their NFTs at a higher price in the future.
- Dutch auction: Unlike opening the auction with a floor price, a Dutch auction uses the declining price format. The price starts at a given point and declines every X minutes. Most often, projects define a predetermined pace and percentage decrease.
The most popular pricing mechanism is “fixed price” because of its simplicity. However, a Dutch auction works well for price discovery. It allows you to gauge market demand for your NFT at different price levels. You can host such a Dutch auction on Twitter and then use the gained intel to set the floor price for the rest of your collection.
Should you consider invite-only marketplaces for selling NFTs?
Invite-only marketplaces create some form of exclusivity for artists. For instance, Foundation is an invite-only marketplace. Invites can only be sent by members who have already sold at least one NFT on the platform.
The biggest benefit of an invite-only marketplace is that it has an artist-centric focus and places importance on the quality of their NFTs. Also, artists can only invite one artist once they have successfully sold an NFT. Therefore, only befriended or trusted artists can join the platform, avoiding that anyone can sell their stuff on the Foundation marketplace.
Unfortunately, it’s not easy to access an invite-only marketplace, but it’s worth considering. Such a marketplace can boost the credibility of your project. Again, be patient to apply for more exclusive marketplaces. You want your project to mature before applying to these types of marketplaces.
Passionate about Documentation Strategy, Developer Expierence, and Developer Advocacy. Software and blockchain engineer (Node.js & Go) and technical writer. And oh, crypto nerd!See other articles by Michiel