Wondering what it costs to create an NFT is probably something that has run through your mind before. And the truth is that the cost of developing an NFT depends on various factors, such as the specific NFT marketplace and the artists collaborating on the project. Let’s assume your business aims to enter the NFT market.
In that case, it’s crucial to manage the costs associated with minting NFTs to ensure profitability. While the NFT space offers great earning potential, it’s important to acknowledge that risks are involved, just like with any investment. Another thing to note is that the value of NFT collections can fluctuate, much like traditional art or digital assets.
NFT, a non-fungible token, is a unique digital token stored on blockchain technology. It contains specific codes that establish its distinctiveness and ownership. Unlike fungible tokens, NFTs cannot be exchanged for one another. Each NFT holds its own value, and when a digital asset is created, it is uploaded as a file to the blockchain. The asset’s information and details about the creator are encoded as metadata, forming the NFT.
NFTs offer various trading, purchasing, selling, showcasing, and collecting possibilities. Even before the emergence of social tokens and NFTs, digital trading was prevalent. People have been buying, selling, and holding digital assets for quite some time. However, defining the security and ownership of such assets was challenging. It’s important to note that NFTs extend beyond the realm of art.
Take a look at your house’s deed, your car’s lease, or your apartment’s leasing agreement. These papers are specific to you. NFTs function similarly to smart contracts in that they reflect real world items like real estate, vehicles, and experience tickets. For example, a California winery developed NFTs linked to certain bottles of expensive wine. These NFTs may be bought by customers and exchanged for the matching bottle of wine. This illustration shows how NFTs can be used in a variety of applications outside of just digital collectibles.
Creating your first NFT can be exciting, but the cost may surprise you. On average, making an NFT costs between $.01 and $150. However, during peak times, the Ethereum blockchain has witnessed fees surpassing $500 for a single NFT creation. Fortunately, Ethereum is one of many choices for minting NFTs. Several alternative blockchains allow you to establish your own NFT at much lower costs than Ethereum.
Apart from offering digital artists and creators a means to monetize their work, NFTs are envisioned as a new art investment and collecting form, becoming part of the cryptocurrency investment landscape. Due to their uniqueness, there is a small possibility for an NFT collection to surge in value, as we witnessed with Beeple’s digital artwork. For art collectors, NFTs are easily tradable on online marketplaces.
However, for the average investor, NFTs fall into a highly speculative investment category that should be cautiously approached. Unlike traditional investments, NFTs do not gain value based on their utility but rather rely on the value of the media they represent, such as digital art, videos, or music. Determining the value of something like art is an incredibly challenging and subjective task, unlike evaluating the worth of stock, which signifies ownership in a business and a claim to future profits generated by that business.
NFT Minting is placing your digital artwork or content on a blockchain. Several blockchains support the NFT token standard, such as Polkadot, WAX, Ethereum, Tron, Cosmos, Tezos, EOS, Flow, and Binance Smart Chain. Similar to physical coins, NFTs are generated before they enter circulation. By minting an NFT, the data is transformed into a digital asset that can be bought and traded on NFT exchanges using cryptocurrencies. While minting, creators and artists can set royalties for their NFTs.
Whether digital art, music, or collectibles like sports and trading cards, the aim is to convert a digital file into a digital asset on the blockchain. However, it’s important to note that the blockchain doesn’t hold the actual data of the NFT itself. If it did, the blockchain would quickly become excessively large. Remember that an NFT is simply a token representing ownership of a specific digital asset. The token holds more value than just a screenshot of, for example, the Bored Ape Yacht Club. Minting an NFT involves posting your unique token on a blockchain and allowing others to purchase it.
The Ethereum blockchain is commonly used for NFT minting, but other options like Solana, Cardano, Tezos, and more exist. Since the mining process is decentralized, anybody may produce cryptocurrency without relying on a single regulating body. The cryptocurrency ecosystem offers a variety of currencies and tokens, including non-fungible tokens (NFTs) made on different blockchain networks. In both the old financial system and the cryptocurrency ecosystem, minting is essential.
There are four major steps to minting an NFT, which are highlighted and explained below.
To begin, you must create a crypto wallet and link it to an NFT marketplace. OpenSea is a popular choice, and connecting your wallet is simple. Follow the instructions on the website, which are similar to those on other marketplaces. It’s important to complete your profile by including links to your website and social media accounts. Additionally, indicate the cryptocurrencies you accept as payment for your NFTs.
Next, upload your digital file to the marketplace and give your NFT a name. During this step, you’ll also set up a royalty rate. This rate determines the percentage of royalties you’ll receive when your NFT is sold on the secondary market. Typically, royalty fees range from 5% to 10%. Once the upload process is complete, your NFT will be minted.
When making an NFT sale, you must ensure your crypto wallet is funded. To do this, you must purchase some ether or Ethereum cryptocurrency and deposit it into your wallet. Some marketplaces allow direct transfers from your wallet to your NFT marketplace account. Remember that transactions will incur “gas fees,” which you must cover.
Once your NFT is minted, you can list it for sale on the marketplace. The marketplace will provide information about the applicable gas fees for the cryptocurrency network and any relevant service fees. You can create new NFTs and build a collection of your artwork. Furthermore, you can trade NFTs created on one marketplace into another, although this may involve a fee.
Before proceeding with the minting of your NFT, it’s important to consider the choice of blockchain, as this can significantly impact your minting costs. Factors such as the time of day and the floor price or secondary market value should also be considered. Therefore, thinking about these aspects is crucial before proceeding with the creation process. When minting NFTs, the following costs are among the most commonly incurred:
When minting NFTs, most blockchains require at least one network transaction, which incurs gas fees. Gas fees are payments made to miners who contribute their processing power to complete transactions. Each minted NFT item comes with a service charge, and the costs associated with each blockchain network are unique. For instance, a blockchain network that utilizes a different consensus process and doesn’t rely on miners would have lower gas expenses than minting an NFT on the Ethereum blockchain.
It’s important to note that when a buyer purchases your NFT, they ultimately cover the associated charges. Furthermore, gas costs can vary significantly based on the level of activity on the blockchain network.
The cost of creating an NFT can vary depending on the NFT marketplace you select.
Although certain platforms offer free NFT minting for creators, a cost might be associated with listing and selling them on their marketplace.
When using Ethereum, there is a cost associated with processing transactions and creating contracts on the blockchain, known as the “gas fee.” This fee is paid directly to the miners, who provide the computational power to verify transactions. Essentially, you are paying for the electricity and computing resources the blockchain requires to create your NFT. To cover the gas fee, it’s advisable to keep a small amount of ETH in your crypto wallet where your NFT is stored, especially if you plan to make price revisions, list items for sale, or engage in trading with these collectibles.
Calculating the exact ETH gas fee can be challenging, as it involves some guesswork until the actual fee is determined. Typically, a speed option is available, but faster minting comes at a higher cost. However, you can choose the slower and more economical option with patience. It’s important to note that the price of each gas unit can fluctuate significantly from moment to moment, especially during times of congestion or high activity on the Ethereum blockchain. Additionally, NFT transactions require more processing power and gas than other blockchain transactions. Therefore, it’s essential to stay vigilant and monitor these factors closely.
As mentioned, the gas fee represents the cost of energy required to execute and validate a transaction on the blockchain. Gas is typically measured in “native tokens,” the base accounting units used for payments and other transactions on a specific blockchain. For example, Ethereum utilizes Ether (ETH) or GWEI (one-millionth of an Ether) as its native token. At the same time, the Flow blockchain uses FLOW as its native token. The value of native tokens such as Ether or FLOW fluctuates in relation to the market, similar to any other currency.
To better understand how gas fees are calculated, let’s compare two blockchains conducive to NFTs: Ethereum and Flow.
Transaction Type
Estimated Cost (in FLOW)
Cost in USD (with FLOW price at $1.70)
Estimated Cost (in ETH)
Cost in USD (with ETH price at $1380.00)
Native token transfer
0.0000019
0.00
0.0014 ETH
1.85
Mint a small NFT
0.00000185
0.01 – 0,05 ETH
50 – 150
Empty Transaction
0.000001
Add another signature to account
Creation of 1 account
0.00000315
free
Deploy a small Smart Contract
0.00002965
Lazy minting is a simple concept that allows NFT creators and artists to delay the expenses associated with minting. With lazy minting, the actual minting process is postponed and carried out only after the NFT is sold. This means the buyer covers the cost of minting the NFT instead of the creator. To make this strategy work, it’s important to ensure that the selling price of the NFT exceeds the minting cost.
One advantage of lazy minting is that it reduces the need for computational power since not all NFTs are sold and minted. Many popular NFT marketplaces offer free minting options, providing exposure for NFT creators and digital artists.
When considering the cost of creating an NFT, it’s important to remember that different blockchains have varying minting expenses. While Ethereum is widely used, it’s not the only choice available. Furthermore, the cost of generating and transferring assets on the Ethereum network can be high due to expensive transactions, prompting people to explore alternative blockchains like Solana, Polkadot, and BNB Chain.
As mentioned before, the transaction fee on a blockchain depends on its current activity level. When there’s high demand, the gas price increases. Many individuals take advantage of daily fluctuations in NFT minting activity, finding that it’s sometimes cheaper to mint during certain times or specific days of the week. Although this strategy requires checking and testing for each specific day, it can result in significant savings. Below is a table showing the most well-known blockchains and the marketplaces that support them.
Blockchain
About
Marketplace
Ethereum
Huge demand, high security and privacy, availability on all marketplaces
OpenSea, Rarible, Foundation
Polygon
Low commission, secure transactions with Ethereum currencies, high speed
OpenSea, Rarible, NFTrade
Solana
High speed, minimum commission, low environmental impact
OpenSea, Rarible, Solanart
Flow
High scalability, faster transactions, increased bandwidth
Rarible, NBA Top Shot, NFT ALL DAY
Tezos
Low fees, high performance, faster transactions with less processing power
Hic et Nunc, Kalamint, OneOf
When comparing blockchains for creating NFTs, the choice ultimately depends on the artist’s preferences and the project’s specific goals. Each NFT creator needs to conduct research and determine the best blockchain for their new NFT collection. Artists should consider factors such as the blockchain’s ecosystem and surrounding community.
However, there isn’t a significant difference between blockchains when comparing costs. The most popular NFT marketplaces now offer lazy minting options for both the Ethereum and Polygon networks, allowing artists to create their NFTs for free. By choosing lazy minting, no upfront costs are associated with creating an NFT on platforms like OpenSea or Rarible using the Ethereum or Polygon blockchains. This eliminates the need to follow the traditional, more expensive route of minting an NFT on Ethereum, which could cost over $100 just to list an NFT that may or may not be sold.
While minting an NFT on Solana does incur small network fees and doesn’t provide lazy minting, these fees amount to less than a dollar, making it a relatively affordable option.
Now that you have a grasp of the factors influencing the cost of minting an NFT, it’s crucial to consider other aspects that can impact the overall cost of creating NFTs. When you embark on creating NFT art, several key factors come into play, which include:
The size of your NFT is a significant factor in determining its cost. Larger and more complex designs or files will incur higher expenses during creation. It’s worth considering if your NFT needs to be large or if it can be broken down into smaller pieces as part of a collection, which can help reduce costs. However, it’s important not to compromise the quality or artistic vision of your NFT solely for cost-saving, as the goal is ultimately to sell your creations.
Apart from size, the quality of your NFT also affects the creation price. Quality includes factors like resolution and other considerations, but it also extends to royalties. Let’s assume you intend to earn royalties from future art sales; incorporating this feature adds complexity to the design and increases the overall creation cost. However, royalties allow you to earn fees each time your NFT is bought and sold.
In general, building a single NFT is less expensive than creating a complete NFT collection. To increase their chances of making sales, many artists, however, opt to provide various versions of their work. But you must note that producing NFTs in different forms will cost more money.
The chosen format of your NFT significantly impacts the production cost. NFTs can support JPEG, GIF, MP4, MP3, WAV, and more formats. The format depends on the type of art you create, whether it’s an image, audio file, or video. It’s important to select a widely accepted and accessible format, especially for mobile devices. Choosing an inappropriate format can adversely affect the quality of your NFT during the minting process.
When creating an NFT, one of the initial costs you’ll encounter is related to the artwork itself. If you’re not an artist, there are options available to you. You can hire a freelance artist to create a custom piece for your NFT. If you’re feeling creative, you can create the images yourself.
Some common methods many NFT creators use to produce their artwork images are
During this stage of creating an NFT, the primary focus is on design rather than coding, which often incurs higher costs. Your expenses mainly involve paying for design services and the necessary design software to create the layers required for your NFT.
Here’s an estimation of the costs involved in generating the artwork:
On average, you can expect to spend between $20 and $100 to generate all the necessary artwork for your NFTs.
If you plan to showcase your NFT on various platforms, you must pay listing fees for each platform. The positive aspect is that certain NFT marketplaces, like Rarible and OpenSea, do not impose any listing fees. However, they collect a percentage from each sale (2.5% on OpenSea and 1% on Rarible), so it’s important to consider this factor when selling your NFTs.
Here are some notable NFT marketplaces you can explore:
When venturing into NFT creation, it’s important to be prepared for associated expenses. However, these digital assets provide a unique opportunity to build assets that can generate ongoing royalty fees and income for years. As you can observe, several costs are involved in creating an NFT.
The final expenses will depend on the blockchain you choose, the complexity of your artwork, and the number of mints required. Creating and minting an NFT collection can range from $20 to $500. If this is your will, remember that if you opt for a popular blockchain like Ethereum, the gas fees might be higher, which could increase your expenses.