Why do you need to pay for the creation of NFT?
In order for an artist to be able to create and sell NFTs, they first need to mint their NFTs. The term “mint” comes from the fiat currency we are used to, or rather from the process that made it so valuable. Physical coins are mined using a certain concentration of precious metals such as gold or silver. Adding these metals to coins preserves the value of the asset.
When an artist creates an NFT, they convert the digital file into a digital asset, uniquely publishing their token on the blockchain to make it available for purchase. This process requires sufficient computing power. Right now, most blockchains consume a lot of power while transmitting and verifying transactions. In turn, the gas fee covers the cost of these processes and can vary significantly depending on the platform you use.
Other fees include account fees and listing fees depending on the platform you choose to sell. As a rule, marketplaces include their fees in blockchain transactions when using their network. For example, the most popular NFT marketplace, Opensea, charges 2.5% on each of your transactions as a listing fee.
Ethereum can be used by anyone to create any secured digital technology they can think of It has a token designed for use in the blockchain network, but it can also be used by participats as a method to pay for work done on the blockchain. Ethereum is designed to be scalable, programmable, secure, and decentralized.
When it comes to mining and gas fees, Ethereum prices can fluctuate a lot due to network congestion in the first place. New competitors such as Solana, which claims to be the fastest blockchain in the world, as well as NFT marketplace Polygon, have built their platforms on more recent blockchain innovations, providing an alternative for artists.
The current overhaul of the Ethereum platform for Ethereum 2.0 is expected to bring many improvements, including faster speeds and stable gas fees. Although the platform is not without flaws, Ethereum is still the most widely used platform for NFTs and is the best choice for anyone who wants to try their hand at the NFT market as a creator.
Their significant presence in the market makes them a safe option for investors, and its huge ecosystem accounts for approximately 95% of NFT users, giving creators significantly more opportunities to impact and profit.
Ethereum gas fees typically range from $1 to $5, but there was a time when users could pay up to $100 in fees. Artists only willing to pay for gas after their NFTs are sold now have a lazy minting option. In these cases, fees are deducted from the final sale.
It is the second most popular NFT blockchain - Solana, NFT minting requires three blockchain transactions. Each transaction costs approximately 0.00045 SOL. At a price of 1 SOL of $95, the fee per transaction would be $0.04, bringing the total mining cost to 0.00135 Sols, or $0.12.
Polygon is another great option for making NFTs because the blockchain uses the most popular NFT marketplace, OpenSea, to make transactions.
On Polygon, you can easily mint and host your NFTs without any upfront cost as it uses lazy mining by default. However, with this option, the platform charges a 2.5% service fee, which is deducted from your income after your NFT is sold.
Even if you sell your NFT through the Polygon network, the sale price will be in ETH. This is because Polygon is a layer 2 blockchain solution built alongside Ethereum.
Layer 2 blockchains and their benefits
Layer 2 (L2) blockchain solutions are like a simple upgrade for existing layer 1 (L1) blockchains. They function as a secondary structure or protocol built on top of the existing blockchain system. Their job is primarily to solve problems with transaction speed and scaling.
Most L2 chains like Polygon are based on Ethereum where the developers have copied the Ethereum code and modified it slightly to work differently. L2 chains are an integral part of the evolution of the NFT market as they maintain the integrity of the existing blockchain. They achieve this by facilitating communication between the L1 and L2 chains—essentially allowing them to “talk” to each other—while solving speed and scaling issues. .
Reduced gas fees
2 solutions like Polygon help lower gas fees by facilitating congestion on the of blockchains, typically Ethereum. By using these 2 solutions, you can save on gas bills and help reduce congestion . Users can also track gas prices and accurately calculate their fees using tools like Etherscan's Gas Tracker or Gas Now. Another great method for lowering the price is to schedule your transactions using price growth and fall forecasting tools such as Ethereum Gas Charts to release your NFTs during off-peak hours.
Lazy minting, delayed cost
For most platforms, you will need to pay some kind of release fee in advance to turn your digital file into an NFT on the blockchain. There are also alternatives where you can defer mining costs. Opensea now has a lazy mining option, the main advantage of which is the ability to defer gas and mining fees until NFTs are sold out
Cost of creating an NFT
While mining and gas fees still pose some barriers to creating NFTs, the blockchain ecosystem is rapidly evolving to develop new methods that make the process easier. From lazy mining to layer 2 blockchain solutions and overhaul of the entire Ethereum platform, every innovation brings us closer to affordable and accessible mining for everyone.