Do not get swayed by the buzz created by NFTs! The digital world is a horde where even one wrong step will make you a beggar in a matter of seconds. Thus, proceed with precaution and know what are things to consider before buying and selling NFT. Blindly following the trend of NFT will lead you nowhere, which is why it is vital to get acquainted with NFTs before you jump into this digital landscape.
Major NFT collections like CryptoPunks, BAYC, CryptoKitties, etc are prompting people to kickstart and try their hands in the NFT world. If you’re one of them who thinks that NFT trading will open huge doors for you to become a millionaire, then, think realistically!
If you are buying an NFT or even selling your creation as an NFT on the NFT Marketplace, then there are endless factors that you need to consider before jumping into the trend. From choosing a secure NFTMarketplace to knowing the risk involved, you have to know everything before making your first purchase or sale in NFTs.
So without further ado, let’s look at all factors you should pay close consideration to before buying and selling NFTs.
Things To Consider Before Buying And Selling NFT
If you’re getting inspired by looking at the list of highest selling NFTs and want to kickstart into the wonderland, then you should know it is nothing but a gamble if you aren’t a popular creator or influencer. If you wish to make a name or earn millions in the NFT world, then you have to be patient and strike when the iron’s hot!
Below we have carefully elaborated the things to consider before buying and selling NFT. So without further ado, let’s jump to it!
For Seller Of NFT
A creator who wants to sell their unique art piece or other valuable NFT needs to know a number of things before selling an NFT and the first one is obviously related to his own creation. If your NFT isn’t unique enough and if you do not have a name in the Crypto art world, then why would people even wish to buy your NFT? Asking these important questions and knowing the risk involved is vital before selling an NFT in the NFT Marketplace.
Let’s look at other factors that you need to consider before selling NFT.
The Crypto art of renowned Crypto art sellers like Beeple, Xcopy, Pak, etc is being sold for millions of dollars. This is called reputation in the digital art world. If you do not have such a reputation, then your NFT art will surely take time to get noticed and sold.
This signifies that you need to forgo all your old beliefs or mantras that people have fed you regarding becoming a millionaire by selling NFTs. You need to be patient, adopt marketing strategies to lure customers who are willing to pay for your art, price correctly, etc if you wish to be successful in the NFT landscape.
Thus, it comes down to this! If you do not have an established reputation like high-end brands, then your NFT will lie in the NFT Marketplace if you do not advertise it well. Hence, here comes the unique element of your NFT. If you have an NFT that has the potential of reaching the top and fetching millions, then nothing can stop you.
2. NFT Marketplace
Coming on to the second most important factor that you need to consider before selling NFT, NFT Marketplace! Besides your NFT art and its rarity, choosing the right NFT Marketplace is essential when it comes to selling your NFT.
An NFT Marketplace is a platform that specializes in the trade of NFTs and makes use of stable blockchain technology to monitor transactions. Thus, you need to choose the NFT Marketplace very carefully. You need to choose an NFT Marketplace that experiences regular traffic on their platform so that your listed NFTs get a chance of being sold.
Moreover, you also need to pay close attention to the transaction fees of your chosen NFT Marketplace. NFT Marketplace like NFT deducts a 2.5% charge as a transaction fee if you are posting an NFT for sale on their platform. These rates vary from platform to platform, thus, you need to choose an NFT marketplace that is affordable to you.
Below is the list of some of the best NFT Marketplaces that you can choose from.
- Axie Marketplace
- Larva Labs/CryptoPunks
- Theta Drop
As NFTs are stored on a Blockchain, you need to mint the NFTs if you wish to list them for selling on an NFT Marketplace. Thus, the next important thing that you need to consider is what blockchain technology are you using to store your NFTs.
Primarily, most of the NFTs are minted on Ethereum blockchain as it is the technology where they initially developed. However, you should know that there are many other Blockchains where you can mint your NFT at. Although Ethereum is a secure and trustable blockchain, the prices (Gas Fees) are astronomically high on the platform.
Thus, you need to choose a blockchain that has a low minting fee, unlike Ethereum.
4. Terms of Smart Contract
Another most important factor to consider before posting an NFT for sale is to check the terms of the smart contract first. You should check all the provisions before you hit the sell option to make sure you are not on the losing end of the bargain.
Will there be licensing of royalty on your NFT? How much commission will you receive in the future trade of your NFT? And other pressing questions like. Unless you are satisfied with the conditions offered in the smart contract, do not proceed further.
Pricing your NFTs is up to you, the creator, and the seller. But what kind of pricing are you attributing to your NFT, it should be properly considered before you blindly assign a value to your creation.
You should set the right amount for your NFT, the price that isn’t too high or too low. The price that meets your expectations and the price that serves the value for which the NFT was created. Cheap sale promotion should be avoided if you want to stick in the NFT market for the long run.
If you are planning to build your reputation from scratch, then plan your strategy and price your NFT right.
This was all about what a seller should consider before selling their NFTs. In addition to the above-mentioned factors, you should also make sure to promote your NFTs regularly so that they are known to people and possible buyers.
Simply listing on an NFT Marketplace doesn’t always work. You have to make a perfect strategy if you want to sell your NFTs.
Points To Remeber While Buying The NFT
If you are planning to buy NFT out of interest or as a potential investment, then here’s what you need to do before buying NFTs.
1. Purpose of buying NFT
The first and foremost thing that you need to consider before buying NFT is obviously the purpose of the same. NFTs have a volatile market with low liquidity. Thus, you need to buy NFTs with closer inspection and with a proper purpose.
If you’re simply buying NFTs out of sheer curiosity, then we recommend you to drop the thought as it won’t prove beneficial. You should buy NFTs of value that have the potential for growth in the future and have high investment value.
2. Properties of NFT
After you have decided on the purpose of your collection of NFTs, the next most important thing to consider is the properties of the NFT and who’s the creator of the NFT. If the NFT belongs to a renowned creator and has unique attributes, then it’s a positive sign that you should buy the particular NFT.
Rare NFTs with popular or reputed creators should be bought instead of other NFTs that have no history behind their creation.
3. Seller Verification
Once you have decided what NFT you’re going to purchase, you should carefully look at the seller information to check if it’s a valid seller. NFTs from a seller with a verified tag on the NFT Marketplace should be looked out for to ensure that the sale is verified and so are the NFTs.
To save yourself from frauds, you should buy NFTs from verified sellers only.
4. Transaction Fees
Some NFT Marketplaces charge fees for every purchase made in NFTs. Such transaction fees vary from place to place. However, before making a purchase in an NFT Marketplace, you should always get acquainted with the T&C of the marketplace to know more about their charges.
NFT Marketplace like Rarible charges 2.5% translation for every NFT traded on their platform. Thus, you should choose a marketplace that is affordable to you and provides safety for transactions as well.
5. History of Seller’s Old NFTs
This step is to ensure that the NFT you’re buying is worth the cost or not. Checking the history of sellers’ performance on the marketplace is important to note if the NFT you’re planning to buy will yield profits in the long run or not.
If the NFT that you’re buying is gaining traction, then you should definitely buy it if the history of the seller is favorable as well.
This was all about what you need to consider before buying and selling NFT. We hope we were able to help you with your first NFT purchase or sale as the world of NFTs is rather bumpy as it requires lots of considerations.
Keeping in mind the essential factors before buying or selling NFTs will help you proceed with precaution while keeping your mind open to possibilities. Hence, whenever you think that it’s finally your time to shine in the NFT marketplace, refer to this article and Bam! Make your first purchase or sale of NFTs!!