At the first glance NFT business may seem something very complicated but the reality is very different. People speculate with NFTs seeking a way to earn money. And what about NFT project founders? How do they earn?
- How NFT business works?
- What is the price of minting an NFT?
- Whats an income of an NFT project?
- Community management
- Can I earn buying and selling NFTs?
- Post scriptum
How NFT business works?
To be honest – 99% of NFTs are pyramids. Not very traditional, when newcomers support those who came earlier. But still very close to that.
Let’s skip project formation and come directly to the mint point. In NFT projects nobody controls the mint, process of creation of NFTs. Sure, you know how many was minted, what was the price and how many were burnt. It’s all shown in blockchain and can be veryfied. But you don’t know – Who buys/mints NFTs? Is there a crowd of supporters making a que to mint an NFT of their favorite project or just a bot that mints NFTs for founders?
It may happen that thousands of NFTs will be minted and, among those, there will be only 2-3 real, independent buyers. The rest can be minted by management of the project. They just take money from one pocket and put it into another, buy NFTs themselves, hehe.
Professionals would object and mind me that minting itself is not free. And what about commissions? To buy an NFT you pay transactional commission (gas). These money are 100% lost.
What is the price of minting an NFT?
Ok, lets take a calculator and an NFT project. Let it be on Solana and let it be Dope Apes, apes are popular now, hehe. So, there was minted 3333 NFTs. The average cost of minting such NFT is just 0.00001 SOL. The mint price was 0.8 SOL. Where is my calculator?!
Suppose I minted 3330 NFTs for myself. Sure, I used different wallets etc. to make a show. And 3 NFTs, by incredible chance, were bought by real, independent buyers. I have 2.4 SOL from them. And I spent 0.0333 SOL on minting 3330 NFTs ))).
This particular project was not very successful, as they initially reduced the amount of NFTs from 5555 to 3333 and mint price from 1 SOL to 0.8 SOL. Why spend extra, if you failed to bring in enough losers?
Whats an income of an NFT project?
Creating an NFT collection, hosting typical website, running twitter, discord ets. for 2.4 SOL only? Sounds stupid. So, the real numbers of the project could be higher. Maybe 10% of the minted NFTs were bought by real people, maybe 15%. Not more, as twitter has only 17k subscribers, discord 20k, most of them are bots. Chats are not as active as they must be with 3333 NFTs sold. The income of such project between 250-350 SOL.
Community management
All promo inside the community is targeted on “bring in new losers” or “keep, don’t sell as long as possible” and we will airdrop. All clear with new losers. And the second option comes from lack of demand for those NFTs. Nobody wants them, hehe. Founders have to buy out NFTs themselves – Show must go on! That’s why selling a minted NFT is very discouraged. By the way, I spent some time investigating how many NFTs were sold in the upcoming month after the mint. No so many. I would say several. Sure, people tried to sell for 7-12 SOLs what they minted for 0.8 SOL looking at “rarity charts”.
As for me, todays average NFT project is a mixture of a pyramid, online casino, online trading, lottery and the craziest ideas that all go “To the Moon” or “To the Mars”. All packed and promoted via very cheap channels to uneducated people.
Can I earn buying and selling NFTs?
Sure you can! But to do that you need to have a couple of fools at hand who will buy your NFT at a double or triple price.
A drop of honey in the story is that sometimes the marketing campaign of an NFT is so strong that that there is really a shortage of NFTs in the aftermarket. If you catch such project – you win. Otherwise – not.
Post scriptum
I wasn’t going too deep into calculations, methods and details. I wanted to speak in general about NFTs and check if this topic provokes interest. If you liked the article and want more details put a like on this post or give me some feedback and I’ll disassemble an NFT project for you.
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