Overview of NFT marketplace business model (Checklist included)
To help you understand NFT Marketplace Business Model more easily, we classify NFT Business Model into four segments: Digital Collectibles, Strapping/Proven Communities, Corroborative/Proven Experience, and Elite Securing Personal Information.
Digital collectibles
This is most commonly known, and many popular NFT marketplaces opt for this kind of business model.
Digital collectibles may include but are not limited to music tracks/royalties, clips from sporting events, and even other forms related to intellectual property. A digital asset powered by blockchain technology allows you to display it to countless users yet clearly establish ownership just for you.
By leveraging blockchain’s decentralization and transparency, every transaction is securely recorded and easily traceable. Unlike cryptocurrencies such as Bitcoin, NFTs are non-fungible – each token is unique and cannot be replaced. This uniqueness means that owners can potentially earn signigicant returns if their collectibles increase in value and attract more buyers.
Checklist considerations:
- Target audience’s interest in specific digital assets
- Licensing and intellectual property rights
- Marketplace tools for showcasing and trading assets
Strapping/Robust communities
NFT communities are group of investors and collectors who share a mutual belief in their own NFT projects. A strong community is the backbone of any successful NFT marketplace. Beyond creating unique collections for trading, building an engaged and loyal member base is essential for long-term growth.
Social media platforms are often the primary channels for spreading the project’s vision, culture, and brand identity, attracting more people to join. Many NFT marketplaces launch with around 10,000 avatars, where new members usually need to own certain tokens to be officially recognized. As the community grows, curating a shared list of NFTs that everyone supports becomes challenging, given the diversity of personal preferences.
New and budget-friendly NFT initiatives are emerging to attract members at a lower cost. However, experts recommend that a beginner join some established communities first, to get some practice and learn the hard way before making any decisions about joining or founding any new NFT marketplaces.
Examples of robust NFT communities: Bored Ape Yacht Club, CryptoPunks, VeeFriends, Cool Cats, The Flower Girls, Nuclear Nerds,…
Checklist for building a robust NFT community:
- Define your community’s vision and values
- Use multiple social media platforms for outreach
- Create membership benefits tied to token ownership
- Encourage active participation and content creation from members
- Maintain consistent communication and transparency
Proven experience
In traditional systems, proof of experience or participation often relies on physical or centralized digital records such as degree certificates for employment, paper tickets for events, or printed coupons for discounts. These methods are prone to loss, forgery, adn administrative delays, especially in the industry 4.0 era.
NFTs may soon be used for experiences like learning, joining a concert or sporting events, and even traveling, to name but a few. This is expected to save you more time and money. You don’t have to wait for such a long time to verify tickets or legal documents, as any procedures now could be taken online. You save money as you do not need to pay intermediaries’ fees.
Look ahead, NFTs could enable more innovative applications. In events, for example, they might replace physical tickets entirely or even transform certain offline experiences into fully virtual ones. This shift would allow organizers to expand their reach globally while reducing venue and operational costs, making experiences more accessible and cost-efficient for participants.
Securing personal information
NFTs have the ability to trace the history, store and verify information, making it easier than ever to identify documents in various sectors such as laws, healthcare, real estate, etc. Their security and immutablility also make them a potential solution for storing sensitive personal data. In the future, some envision that goverments could integrate NFT technology into voting systems if all necessary legal and technological conditions are met.
How to monetize an NFT marketplace (How to make money)
An NFT trading platform could only work and function efficiently with a proper NFT business model. Current NFT marketplace revenue comes from a wide range of streams:
Listing Fees
NFT Marketplaces is like cybermarket, and content creators are sellers. If they want to display their work, they need to pay some fees for NFT Marketplaces’ owners; this is what we call “listing fees”. And then crypto collectibles developed by creators would be well-categorized based on types, price, demand from investors, and other factors.
Some NFT marketplaces currently don’t charge fees for minting NFTs but charge some fees in case users want to list them for trading. And some allow you to create and list NFTs on their marketplace for free and then charge you 2,5% per NFT that you sell successfully.
As the listing fees vary in different marketplaces, make sure to check out the FAQs or related docs of marketplaces carefully.
Transaction processing charges
This is one must-have cost you must pay when joining a peer-to-peer transaction. This is also regarded as NFT trading platforms’ primary method to generate revenue. Most marketplaces will only charge the buyer around 2% – 5% per transaction. The transaction charges are to pay for gas fees to maintain the function of the blockchain network.
Setup fees
This is not a fixed cost as NFT marketplaces charge this fee differently, even some do not charge you any, LIQNFT, for example. As every NFT platform is backed up with a blockchain protocol, creators need to pay a specific fee to be able to update their collection on the platforms and list it for sale.
Private sale
Private sale is often conducted for exclusive and unique collectibles as it restricts how many investors can access assets and have the right to buy. This process might take some time for NFT sellers, from listing their sales as private, and deciding which wallet addresses are eligible to purchase to finding a potential buyer, so some NFT marketplaces charge a fee for any sellers who organize a private sale.
Bidding charges
Bidding is one of the unique and awesome NFT marketplace features as it creates competition and chances for sellers to earn more money. Hence, the NFT Trading platform often charges some fees for buyers who successfully bid for any collectibles.
Affiliate program
This is an exclusive program for partners of NFT marketplaces. They would get more incentives, such as real-time updates on the demand for collectibles they sell, the ability to host airdrop and bounty programs, and the integration of HTTP API to filter information, for example, bids, digital assets, and wallet addresses.
An NFT Business Model not onlyconsiders revenue streams but also considers expenses thoroughly. There are 3 significant costs that NFT Marketplace needs to pay for:
Blockchain network’s maintenance
Each NFT Marketplace would be established on a specific blockchain network such as Binance Smart Chain (BSC), Ethereum, Tezos or TRON. As thousands of transactions have been made daily, NFT Marketplaces have to spend money on gas fees because of the consumption of computing energy.
Smart contract audit
This is one of the must-do tasks every NFT trading platform must execute regularly. They should constantly update and audit smart contracts to keep them in optimal working conditions to prevent any technical bugs and vulnerabilities.
Safeguarding
Each NFT is a distinct digital asset, and the NFT Marketplace has to comply with copyrights, intellectual property, and trademarks. Hence, they often need to pay an amount of money for legal expenses to eliminate copyright infringement or counterfeiting.
Examples of successful NFT marketplace business models
There is nothing better than learning NFT Marketplace Business Models from successful cases. Here are 3 monetization strategies from OpenSea, Rarible, and Superare:
OpenSea
OpenSea is one of the biggest NFT Marketplaces worldwide, and transaction fees are the primary source of generating revenues for this platform. Open Sea charges 2.5% per sale to any buyers. This means if you buy an NFT for 10 ETH, Open Sea would make 0.25 ETH.
Some other fees may include account registration fees, which are a one-time fee to allow users to sell on this platform, a one-time contract approval fee, and gas fees. Yet, the gas fees are excluded from revenues.
Rarible
Rarible has two main revenue streams: transaction fees and $RARI exchange cost. Unlike OpenSea, which charges a buyer per sale, Rarible charge 2.5% per transaction on both buyers and sellers. This means if you buy an NFT for 10 ETH on Rarible, they would make 0.5 ETH, double that of Open Sea.
Rarible also earns money thanks to its own token, $RARI. This token is mainly used for governance and paying for those making transactions on Rarible, and this platform could generate revenues from exchanging these tokens.
SuperRare
Similar to Rarible, Superare generates revenues by transaction fees and exchanging its own token – $RARE. Superrare charges 3% per any transactions on buyers. This means if you buy an NFT for 10 ETH on Superrare, they will make 0.3 ETH.
Its token, $RARE was issued to 7.500 early adopters (founders included). Based on the demand of the total market, early adopters could decide to bid, trade and exchange to raise the value of these tokens, and this is how SuperRare earns money.
Final thoughts
There came a time when NFT Market lost its own attractiveness, yet we can’t deny that the cryptocurrency economy is the future! In the years to come, we may see more and more NFT marketplaces launching. It could be NFT platforms that don’t target the majority but choose some niches to get started. Be it customized NFT selling platforms or all-in-one marketplaces, longing for a sustainable NFT Marketplace business model is always a good idea to earn huge profits.
Let us help you realize your big ideas and consult you with the most profitable NFT Marketplace Business Model you could go for!
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