Cryptocurrencies became the most talked about topic in the industry, all credit goes to the launch of Bitcoin in 2009. Recently, another trending topic Non-Fungible Token (NFT), which has traded $10 billion in the third quarter of 2021 alone. The platform deals with selling artists unique artwork such as paintings, GIFs, videos, games, sports tickets, domain names, and more, but in digital form. The growing industry is becoming one of the major industries to monetize digital content.
All the transactions conducted on NFT marketplaces are secured by blockchain technology. It also helps to build cryptocurrency exchange software like ethereum, Litecoin, Polkadot, Cardano, and TRON. All these things build cost as well as generate revenue. Wondering how? Keep scrolling and exploring the NFT marketplace business model.
What Is The NFT Marketplace?
Just like Spotify and Netflix, NFT marketplace like OpenSea, Rarible, Axie Marketplace also deals with digital content to engage users. But their working model is quite different from these platforms. At NFT Marketplaces, users buy single additional artwork with the purpose of attaining rights or trading. During the pioneering stage, the platform was restricted to a limited list of articles such as artwork, music, videos, GIFs, etc. But, now the platform is spreading roots in almost every sector such as gaming, dominos, real estate, fashion, licenses, Ebooks, and the list is increasing every day.
Owing to the popularity of the NFT marketplace, a news article published on gadgets360, “Indonesian Student Becomes a Millionaire Selling Selfies as NFTs on OpenSea Marketplace,” is influencing everyone. And here is a recent update on “How the NFTs and NFT Marketplaces Are Set to Evolve in 2022”. So, investing in an NFT marketplace is an ideal decision for anyone reading this article.
Some Insightful Statistics About NFT Marketplaces
- The NBA’s Top Shot product generated over $230 in gross sales ( blockchain-based trading card system).
- CryptoPunks NFTs Set Daily Sales Record of $69M in Ethereum whereas OpenSea sets new record as it surpasses $3.5 billion
- OpenSea, Axie Infinity, Rarible, Nifty Gateway, Decentraland, SuperRare, NBA Top Shot, Alien Worlds, and BakerySwap are the top NFT marketplaces.
- The Bored Ape Yacht Club (BAYC), created by Yuga Labs, has become a popular collection of 10,000 unique bored apes generated more than $1 billion in total sales.
Various Revenue Streams of An NFT Marketplace Business Model
Most people are aware of one or two revenue streams of the NFT marketplace. Here we will discuss many other ways to generate revenue from your NFT platform.
- Listing Fees: NFT marketplace involves thousands of crypto-collectibles created by artists. Therefore a marketplace can categorize these articles based on demand, price, and recent addition. Businesses can also charge accordingly for displaying and type of digital asset.
- Transaction Processing Charges: Investors on NFT marketplaces acquire assets after paying in a crypto wallet. For this, marketplaces charge transaction fees by way of gas fees. The fees are collected to maintain and proper function of blockchain networking and keep transactions secured.
- Initial Setup Fees: Some platforms charge a listing fee to list first-time crypto collectibles on their platform. The fee is backed by technologies and protocols used to build the NFT platform. This fee involves charges for the commercial sale of a particular digital property.
- Private Sale: Some of the creators list their products for specific category investors or specific investors. At this option, people can view the crypto collectible but not participate in sales. NFT platforms charge private sale fees from investors or creators for such options.
- Minting Fees: Minting is also not free of charge. Creators pay an amount for registering artwork on the blockchain network. A creator can pay a lesser fee by minting group crypto-collectibles instead of listing them one by one.
- Bidding charges: A bidding fee is paid to begin bidding on the platform. The buyer pays the fee to participate in bids for crypto collectibles. Generally, the fee is paid before the expiry of the auction and after considering the lowest and highest auction price.
The Major Expenses Incurred By An NFT Marketplace
As you have seen the credit side of your financial accounts, now it’s time to check the debit balance too. Here we have a list of expenses borne by NFT marketplaces.
- Maintenance of the blockchain network:
NFT marketplaces have to handle and maintain Blockchain networks such as Ethereum, Binance Smart Chain, Tezos, and TRON. Therefore, companies have to spend a certain amount as a gas fee for energy consumption.
- Auditing the smart contract
Smart contracts are the backbone of blockchain technology. It helps in the proper functioning of transactions, terms, and conditions. NFT marketplace regularly audits smart contracts to keep uninterrupted working conditions and prevent bugs and vulnerabilities.
Final Words!!
NFT is a burgeoning industry. It demonstrates the potential of highly skilled artists and investors. As you are planning to step into the most lucrative market opportunity, you just need to evaluate the currently available marketplaces. Find out what their offering is. Even if you plan to build an OpenSea like the marketplace, you can go with a white label openSea marketplace solution with an nft token development company. Many app development companies offer reliable information related to the NFT marketplace. If you are confused about where to start, the companies can provide you with a quick solution.
