NFTs (Non-Fungible Tokens) have become top-rated digital assets that almost anyone can create, buy, or sell. In just a few years, NFTs have become a public obsession. These are a novelty as assets, with the ease of creating them and their broad appeal as collector’s items. Also, some of the high-profile sales have happened in millions of dollars. That has made a frantic effort by many people and organizations to jump on the NFT bandwagon.
As we have covered more in detail on how to launch/buy NFTs in our previous articles, Let’s focus only on trading in NFTs (buy and sell) :
A quick re-cap on essential steps to start trading in NFTs :
- Ethereum: You need an Ethereum(ETH) – the most compatible cryptocurrency to get started.
- Crypto Wallet: next step is to transfer your crypto to a crypto-linked wallet. Some exchanges like Coinbase have built-in wallet features offered when you open an account. Still, other options include dedicated wallets like MetaMask.
- Account in a marketplace: next is to register an account in a marketplace (i.e., OpenSea, Rarible, etc.). Different marketplaces have different registration processes. Accordingly, we need to connect the wallet to the account in a marketplace.
Before we dive deeper into NFT trading, let’s take a short detour and explore two alternatives to NFT trading.
There is a virtual world called Decentraland, and you can say that it is a slightly vague way to trade in NFTs. This virtual land is very much in line with Metaverse being propagated by Facebook. You can also relate to Steven Spielberg’s film, Ready Player One. The world is formed of parcels of land, each of which is an NFT that you can own.
You can create anything you want, a building or a game and even an advertisement, with the help of parcels.
With the world getting more popular and land becoming scarce or valuable, these parcels can increase prices. Parcels are mostly sold or rented out for other creators to place their content there, facilitating a range of NFT trading options.
NFT Marketplace Trading
Also, suppose you wish to invest in the NFT industry instead of NFT itself. In that case, you have an option to trade in the NFT marketplace through tokens or cryptocurrencies. As a marketplace grows, the value of the tokens used to make transactions rises. Some more significant marketplaces, such as FLOW, can be traded on cryptocurrency exchanges. One can say this is like a derivative in the cryptocurrency trading world.
Let us get back to NFT Trading. The apparent approach to trade would be to buy first or create an NFT before you sell it.
As discussed above, once a marketplace has been identified, the wallet has been linked with the marketplace.
Please note here not all wallets can support NFTs, so ensure you find one that does. Fill the wallet with cryptocurrency. Now NFT can be bought using the wallet. Wait for your purchase to get registered on a blockchain, and NFT will appear in your wallet once verified.
Auction / Fees
You can bid on NFTs, you can buy NFTs, you can auction NFTs for other people to bid on, and you can sell NFTs. It is an open market where sellers create NFTs and buyers buy them.
Remember, most marketplaces have an auction system set up to purchase NFTs, so you need to bid for the NFT you need. Suppose you end up with a successful bid; in that case, a requisite amount is deducted from your wallet, and the transaction is completed.
A fee has to be paid for every transaction made, i.e., Gas fee. Gas prices rise and fall depending on how busy the network is.
Finally comes the selling aspect. After converting your digital assets to NFTs or adding your bought NFTs to your digital wallet, you will be prompted to sell your digital assets on the various available NFT marketplaces.
Selling your NFTs in the secondary market (not the original creator) is the same process described above, except you, do not need to mint the digital asset.
Best NFT Platforms
As an artist or digital creator, minting and selling NFTs could be a new way to get paid for your work. Selling your creation will largely depend on the demand for what you’re doing and how much buyers are willing to pay. The right time to sell an NFT will largely depend on the purpose of the NFT itself and why you created or bought it in the first place. It is essential to understand that the value of an NFT will be based on what someone offers to pay for it.
There are various NFT trading platforms available online. Below we look at the leading marketplace, i.e., OpenSea, as an example.
OpenSea is one of the leading NFT trading platforms offering the most extensive digital marketplace. Clients and users can trade a range of NFTs, from arts and collectibles to domain names. More than 700 projects are available, and the fees charged are a very competitive 2.5% of the seller transaction fee. OpenSea accepts a wide range of methods of payment, including Ethereum.
Overall, it’s a good option for investors new to NFT trading, offering a comprehensive product range and a user-friendly interface.
In conclusion, NFT is the most upcoming digital asset, and trading is upscaling continuously. Some of the recent success NFT stories, i.e., the game of cards story in the NBA and sports, along with the growing interest in digital art, reached an investment of more than $400 million. The support industry, like trading markets, platforms, apps, and sites, is popping up left, right, and center to facilitate the growing excitement.
Like cryptocurrency, NFT, too, holds its share of volatility and unpredictability. There is a section of investors suggesting it as another digital bubble. While others believe it will grow exponentially, it seems likely that NFTs are here to stay.