- Category: NFT Development
NFTs or Non Fungible Tokens have been around earlier than realized. They first showed on Crypto topography in 2014. However, it was the turn of the decade, when they started gaining popularity amongst Crypto enthusiasts. NFTs are not like any other cryptocurrency that you may have seen before. Their distinctive features and easy monetization have captured the imagination of Crypto lovers. Since non-fungibles inception, demand for NFT development services has gained momentum as more and more blockchain companies are showing interest in offering their services. So if you don’t know how to create NFTs, keep reading this blog article.
What is an NFT, and why is it gaining traction?
NFTs, short for Non-fungible Tokens, are digital tokens that are unique in characteristics. Supported by blockchain technology, NFTs are valuable, but they also have an intrinsic value that makes them different from other digital assets like Bitcoin and Ethereum. Their most distinguishable characteristics are non-interchangeability, individuality, traceability, and non-interoperability. Although digital art and online games are essentially viewed as NFTs, however, currently anything that is digital is a potential NFT.
However, physical assets can also be considered as NFTs. Lately, a trend has been observed in the retail market where deals are happening through non fungible tokens. Recently, a property was sold in Florida, the USA, in an online auction and for 210 ETH (more than $1 million).
Surprisingly, the ongoing pandemic was a major force in putting a spotlight on these unique digital assets, and subsequently, the concept of minting NFTs gained traction.
One can access the immense popularity of NFTs from the incredible figures of OpenSea. This first-ever and hugely popular NFT marketplace has registered a sale of over $3.5 billion NFTs alone in January 2022. And who doesn’t know about Beeple, who sold the most expensive NFT ever at $69 million! Jack Dorsey made an extraordinary amount of $2.9 million when he sold his first-ever tweet as an NFT.
Cryptokitties, an online game developed in 2017, allowed users to buy, sell, and breed virtual cats. The game became an overnight sensation and became exceptionally popular amongst crypto lovers. So much so, the astounding number of transactions, the highest ever for an online game, clogged the Ethereum network. In fact, cryptokitties are directly responsible for the conceptualization of Flow blockchain!
The examples above vouch for how quickly and fanatically the concept of NFTs have emerged. It can also be attributed to the fact that people are now more than ever looking for ways to make money online, and NFTs offer them an opportunity to do so with ease. As a result, NFT marketplaces are flooded with non-fungibles, where niche and standardized digital collectibles are up for sale. For all intent and purposes, they are designed to be more than just a way to make money.
They present an opportunity for businesses for higher visibility in the market. Also, the transparency feature of the blockchain, on which the data related to NFTs reside, validates their authenticity and can be easily traced back to their owner/creator. In addition, the instant sale and the high return on investment of the non-fungibles are a few other driving factors that have blockchain development companies racing to create NFTs and mint them.
How to create NFTs or non-fungible tokens:
NFTs are the cash cows in infancy, and the technology involved is still in the development stage. With every improved blockchain and each newly developed NFT Marketplace, NFT development is experiencing vertical and exponential growth. A significant number of top businesses are getting aboard and showing an interest in deploying their NFT development services.
So it is essential to know how to create NFTs, which is the first and the most crucial step before making them deployment ready. Let’s elucidate.
Identifying niche and creating a digital collectible
The first step for the creators is to identify their niche and create a digital item based on a skill-set. It could be anything ranging from a piece of music, digital art, a clothing line, and so on. The possibilities of creating a virtual asset are infinite; however, one should consider the following when choosing their product to invest in:
- Either create an NFT based on your skill-set or choose a profitable niche with a high ROI. Here’s a list of a few highly popular assets that can be attributed to digital collectible:
- Art, in both digital and physical categories, can be sold as NFTs
- Online games
- Trading cards
- Gifs, jpeg, and video clips
- Virtual fashion
- You also need to make sure that the NFT must be unique and a verified collectible. Scarcity also plays a crucial role in choosing a digital asset. More niche your product, the better are the chances it will sell at a higher price.
- Also, Non-fungibles can be copied as they are on a regular basis, but it comes down to the variable of who created first. Therefore it is imminent for the creators to own the copyright of their NFT.
Choosing the blockchain best suited for the NFT development
The next pivotal step is to choose the blockchain on which your NFT would be deployed. Before going down that route, there are certain criteria for the developers to consider:
- Probability of forking: Forking can be hazardous to the uniqueness of the NFT. A hardcore change in the blockchain protocol can increase the chances of hard fork, thereby threatening the creator’s rightful ownership of the asset and adversely affecting NFT’s individuality and value. Therefore it is essential to pick a blockchain where chances of forking are negligible.
- Smart contracts: They play a vital role in securing the blockchain so writing an error-free code followed by draconian testing is mandatory. It is essential to infuse highly secured smart contracts in the NFT marketplaces to ensure users and developers trust in robust transactions and prompt countering to hacking and security breaches.
- NFT token development: The three in-use standard tokens for NFT development:
ERC-721 and ERC-1155 are both Ethereum based tokens, the former being the standard token for NFTs while the latter is a subset of its predecessor. Both the tokens are widely used in NFT development; however, the ERC-721 standard is used strictly for non-fungibles and is limited to one token transfer at a time. In contrast, its alternative supports both non and semi-fungibles and is capable of transferring tokens in batches. On the other hand, TRC-721, developed by TRON – a blockchain developer company, is a standard interface with better and improved infrastructure. This token standard is also fast catching up as the NFTs created on it are more unique than the ones developed on the other two standards, thereby increasing the asset’s value.
However, it is important to note that most NFTs are created on the Ethereum blockchain, which supports the ERC-721 token standard. However other blockchains such as Binance Smart Chain, Tezos, Flow, to name a few, are branching out and supporting other token standards. For instance, Binance smart chain supports both ERC-721 and BEP-721 tokens.
Choosing an appropriate NFT marketplace
The next step is to choose an NFT marketplace for minting NFTs, which means monetizing your digital assets. There are many marketplaces to choose from, such as OpenSea, Rarible, Axie marketplace, Nifty Getaway, and many others. Choosing the correct marketplace to mint NFTs involves:
- Listing your product on the platform and choosing the right category
- Integrating digital wallet supported by the exchange platform. For example, a few popular wallets are Metamask, Coinbase, MathWallet and so on.
- Buying appropriate cryptocurrency for trading purposes. For instance, a marketplace that runs on the Ethereum blockchain will automatically support Ether. In addition, some marketplaces like OpenSea also allow credit cards for transactions.
How do NFT creators generate revenue?
NFT creators can earn by:
o Listing and selling their digital collectible on the marketplaces best suited to their criterion, such as buyers footfall, fee involved, and other advantageous features that a marketplace offers.
o Earning through NFT royalties
How do marketplaces generate revenue?
NFT marketplaces earn by:
- Service or transaction fee
- Listing fee, that is, NFT creators have to pay a fee to list their products on the marketplace website
iii. Adding surcharge to every NFT bought
Transaction and service fees are the most common revenue models adopted by the marketplaces. OpenSea charges a 2.5% service fee on every transaction. On the other hand, Superare earns by adding a surcharge to every transaction. For instance, let’s assume that an NFT sells for 50 ETH. The buyer will pay 50.5 ETH, 0.5 being the surcharge levied.
NFT development services and the risks involved
NFT development is fast gathering steam as there are many success stories in the world of NFT. However, the creators and the companies looking to provide their services should also be aware of the risks while foraying into the world of NFTs.
A few challenging issues could arise, such as copyright infringement, hacking threats, scalability of NFTs, hard-forking, standard tokens restrictions, and security gaps that may occur as the technology keeps evolving.
How Sofocle can help you in NFT development
Sofocle is mindful of all the risks mentioned above, and we believe in covering all the bases and working as per our customer’s requirements. We offer reliable solutions, from planning to product development and ensure fool-proof and timely deployment of the product. We also guarantee round-the-clock availability to our esteemed clientele and offer complete transparency. So, without further ado, Sofocle invites you to test our technological prowess and our efficient NFT development services. We are just a call away if you don’t know how to create NFTs.
It’s a make and grow moment for everyone involved in NFT development. The opportunities to cater white label NFT services are also widening at a rapid pace. The companies looking to provide NFT development services and NFT seekers can look forward to a brighter future. Hope now you have understood, how to create NFTs.