2021 has been the year of NFTs so far. Popular personalities online have openly showcased their love and interest in the NFT trend and many people took the trend seriously and created their NFTs to earn millions and have their pieces of recognition in the digital art world. But NFTs themselves are highly volatile like their other crypto counterparts.
Many surely made millions selling NFTs online but many haven’t been so lucky and lost a fortune. As many were unfamiliar with the hefty hidden fees that come with creating and selling NFTs.
And the first-timer surely had no idea about such hidden cost of NFTs and ended up deducting their profit margins or losing their investments. In this article, we will decode what lies behind all that fancy NFT glam and the hidden fees that many are unfamiliar with.
1. The NFT Gas Fee
If you are interested in NFTs you might have heard about the term “NFT Gas Fee”. Gas Fee refers to the transactional fee of Blockchain. It is fixed and does not rely on the value of transactions. It is advised to beginners who are new to the NFT world should always check the gas fee involved in the transactions to avoid losing money later.
How does Gas Fee Pose A Risk?
Many creators that are involved in making NFTs for the general public are hyped up by the way this trend has turned out and started ranking their NFT prices extremely high for beginners to get their hands on some potentially good NFTs.
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Most of these creators who rank their NFTs high on price tags are the ones doing it for fun or as a mere experiment. These hidden prices make the gas fees more and more volatile daily.
2. NFT Creating Costs
For the creators, generally, there are only two types of costs that are involved one for the deployment and the other one for minting. Deployment fees are related to the smart contract that a creator pays when deploying a smart contract to create their NFT. This fee is higher and can reach up to $100 to $500 in Ethereum.
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After you complete the deployment, you have to put the item you created for sale, which is commonly called minting and the cost for that also depends on the market rates. On top of this, there are some sales charges on collectibles. For instance, the platform will charge the seller around a 5% fee for selling the NFT.
3. Resale Cost of NFTs
The NFT market is exploding with more and more people buying and selling NFTs and that makes it obvious for our readers to understand that there will be a resulting cost involved that is generally overshadowed by the hype NFTs have created.
When you put your NFTs on sale, you need to spend around $10 for transactions on the platform you chose for that specific item. Once the transaction is completed through the authorization process. The creator has to set the price and after that, the creators will have to select a fixed value of that item to put it for auction.
4. Fees to Claim Royalties
Like we mentioned earlier. There is some fee related to royalties and before the creator starts his secondary market’s sales, they must pay their royalty fees. Royalties are for the creators to have a profit every time any transaction takes place related to their creations.
This fee is compulsory and everyone has to pay these and they are mostly set by the minter.
NFTs are a great way to start your passive income journey online or to share your artwork with the people that admire digital art and content creation. However, this marketplace is fairly new and has its twists and turns. Newcomers should understand and consult trustable platforms before investing their time, effort, and money in this stream.
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NFTs are surely here to stay and we can expect a lot from this innovative medium to deliver some of the best projects in the coming years. But it is always good to research and consult and research different artists.
And how do they start their journey of selling and buying NFTs? OR, how they were able to cope up with the hidden fees is a must for all the beginners who are new to the NFT Bandwagon and hoping to double their money.