What can’t you sell as an NFT? Jack Dorsey’s auction of Twitter’s first tweet has a highest bid of US$2.5 million, while a clip of NBA star LeBron James sold for over US$200,000
Non-fungible tokens or NFTs – products that operate as non-exchangeable digital assets – have grown to comprise a US$250 million market, according to a 2020 report from tech-tracking company L’Atelier BNP Paribas and nonfungible.com.
Investments in NFTs rose 299 per cent in 2020, gaining popularity as cryptocurrencies like bitcoin continued to boom, according to the report.
NFT creators and resellers have made millions. In February, an art collector sold a 10-second video artwork for US$6.6 million after buying the Beeple project for US$67,000 in October – nearly a 1,000 per cent profit.
NFTs encompass anything from digital trading cards and art to virtual real estate and gaming.
Unlike popular cryptocurrencies like bitcoin and ether, NFTs cannot be directly exchanged with one another and are spread out across numerous different types of platforms.
Most NFT platforms require buyers to have a digital wallet and use cryptocurrency platforms like Ethereum or World Asset eXchange (WAX) or Flow.
Here’s what you need to know about where to buy and sell NFTs.
Digital art has brought in millions for creators and sellers
Most digital-art trading platforms allow creators to gather a royalty. Some art platforms are more exclusive, while others focus on letting anyone create and sell their art.
Some traditional auction houses have already started to get in on NFTs. In February, Christie’s – an auction house founded in 1766 – made its first foray into digital tokens when it auctioned a Beeple piece. The auction closed on March 11 with the wining bid at just under US$70 million.
For digital artists like Mike Winkelmann – the artist behind Beeple – platforms like Super Rare, Foundation and Nifty Gateway allow buyers to pick from carefully curated work. Nifty Gateway co-founders Duncan and Griffin Cock Foster said their company works one-on-one with artists.
“One of the coolest things about Nifty Gateway is that there are all these artists who basically only existed on Instagram or Twitter who were creating all this really special work, but never had a way to make money from it,” Griffin Cock Foster said. “They started selling crypto art and they’re already starting to see some benefits and recognition.”
Platforms like Nifty Gateway, Super Rare, and Foundation have been home to names like Grimes and digital comic artist Chris Torres. These platforms provide artists with around 10 per cent royalties on any future sales of their work.
Other digital art platforms have less restrictions
While Nifty Gateway strives to be more accessible to buyers by allowing them to use a credit card to purchase items off the site, other platforms focus on having a lower barrier to entry for creators.
Platforms like Zora operate as invite-only, while Rarible and Mintable allow any user to upload and sell images and text as NFTs on the site.
These sites still allow artists to garner royalties, but are much less curated. Creators on Rarible can upload anything from blank images to their own interpretations of famous art pieces.
One NFT creator on Rarible, Robert Martin, said he thinks the sites need to develop more security, but says he has been pleased with how easy it was to upload content on Rarible.
“The site and their moderation of copyrighted and offensive uploads needs some improvement,” Martin said.
These sites sell NFTs for anywhere from US$10 up to millions of dollars.
OpenSea is a catch-all platform for NFTs
OpenSea claims to be the largest NFT marketplace and is home to anything from art to virtual reality, sports and trading cards. The site has over 200 categories and four million items.
People looking to buy popular NFT items like CryptoPunks, CryptoKitties, or virtual real estate can use ether to buy items off OpenSea. DappRadar, a site that tracks and analyses decentralised applications, calls OpenSea “the eBay on the blockchain”.
Several marketplaces also operate off OpenSea, including Decentraland, a popular virtual real-estate site. OpenSea is currently selling over US$20 million in NFTs a week, according to DappRadar.
Sports also account for a large portion of NFT sales
NBA Top Shot, a site where people can buy video highlights as NFTs, has sold over US$260 million-worth in the past month, according to CryptoSlam.
In February, a LeBron James dunk set the record for the most expensive Top Shot sale at US$208,000 worth of the cryptocurrency flow.
Fantasy sport has also taken a chunk of NFT sales. The site Sorare operates as a fantasy soccer game, where people can buy, sell and manage virtual teams via digital player cards.
The platform was founded in 2018, but has recently taken off. Sorare sold over US$13 million in ether last month, according to CryptoSlam.
NFTs offer opportunities for gamers and trading-card collectors
Axie Infinity, a site that sells cartoon characters that are created to fight, much like Pokémon, is one of the top 10 most popular crypto-collectible platforms, according to CryptoSlam.
The site had over 10,000 monthly active users in 2020, making it the most popular game on Ethereum, according to CoinDesk.
Other NFT collectibles based on arcade games like Street Fighter have also gained popularity – generating over US$1.5 million only weeks after the site was launched.
NFT gaming is expected to continue to grow. In February, Altitude Games launched a blockchain racing game called Battle Racers on the Arkane Market, a site that is home to over 100,000 gamers on the blockchain.
Other popular trading card and memorabilia sites include Myth Market and Treasureland.
Virtual real estate is booming
Digital real estate might be the next big area for investment, according to the co-head of Republic Real Estate, Janine Yorio.
NFT sites that capitalise on virtual reality and real estate include Decentraland, which is built on Ethereum and owned and created by users.
Decentraland operates as a multiplayer role-playing game and allows users to build an entire virtual world as an NFT. Yorio calls it a more sophisticated SimCity, Minecraft or Fortnite.
On Monday, Atari, the gaming company known for Pacman, announced plans to develop a cryptocurrency casino in Decentraland.
Decentraland’s internal currency, Mana, had a US$225 million market value in February 2021, according to Yorio, with Mana prices rising over 32o per cent in the past year.
There are several niche NFT marketplaces
On March 5, Twitter CEO Jack Dorsey announced that he was auctioning off the site’s first tweet as an NFT. The highest bid is currently US$2.5 million.
The site, Valuables, allows anyone to auction off their tweet for payment in the form of ether. The platform focuses solely on selling tweets as NFTs.
Many sites have found success in niche NFT collectible markets, including Looking Glass Factory, a site that generates digital holograms and allows them to be sold as tokens.
One person – Swedish creative director of a media company, Petter Rudwall – has even put himself up for auction on Mintable. Rudwall said the NFT includes his own personal information, including birth date, weight, as well as social media accounts.
This article originally appeared on Business Insider.
- OpenSea, ‘the eBay on the blockchain’, sells US$20 million worth of items a week, from virtual real estate to non-fungible token items like CryptoKitties
- Decentraland is a ‘more sophisticated Minecraft or Fortnite’ while Axie Infinity is an Ethereum game selling Pokémon-like characters as crypto-collectibles