Quicklinks: Summary, products and services, successful companies | Income and profitability | Expenses | History, strategy and challenges
Summary, products and services
Summary of the NFT business: how do NFT sellers work? How do they make money?
NFT sellers typically work by creating and selling digital assets. These can be anything from art to music to in-game items. These assets are stored on a blockchain, which allows them to be bought, sold, or traded securely and transparently.
They typically make money by charging a commission on each sale, or by selling their assets directly to buyers. Some NFT sellers also offer services such as marketplaces. Here buyers and sellers can trade assets, or wallet services, which allow users to store and manage their assets.
NFTs have become increasingly popular in recent years, as they offer a unique and secure way to own digital assets. NFTs are also often seen as a more efficient way to trade and sell digital assets. This is because they eliminate the need for intermediaries.
List and description of the five most successful companies in the NFT seller business. How big are they and what is their market value?
The five most successful NFT sellers are:
- CryptoKitties: CryptoKitties is a blockchain game that allows players to purchase, breed, and trade digital cats. It is one of the most popular games built on Ethereum. It has sold over $12 million worth of virtual cats since launching in November 2017.
- Decentraland: Decentraland is a virtual world where users can buy, sell, or rent land and build experiences on top of it. The project raised over $26 million in an ICO in August 2017. It has since sold over $30 million worth of virtual land.
- Gods Unchained: Gods Unchained is a digital collectible card game that allows players to purchase, trade, and battle with digital cards. The game raised over $15 million in an ICO in February 2019 and has sold over $5 million worth of digital cards.
- Axie Infinity: Axie Infinity is a digital pet game that allows players to purchase, breed, and train digital pets called Axies. The game has sold over $1 million worth of digital pets since launching in March 2018.
- Etheremon: Etheremon is a digital monster-catching game that allows players to purchase, trade, and battle with digital monsters. The game has sold over $1 million worth of digital monsters since launching in December 2017.
Income and profitability
List of the top three sources of revenue for NFT sellers (AKA how do they make money?)
The top three sources of revenue for NFT sellers are digital art sales, music sales, and video game sales.
- Digital art sales make up the majority of NFT seller revenue. Over 70% of sellers earn income from this source. The average digital art sale price is $5,000. It can range from a few hundred dollars to tens of thousands of dollars depending on the piece.
- Music sales make up around 15% of NFT seller revenue, with the average sale price being $1,000. Music NFTs can be sold as individual tracks or albums. Prices can vary depending on the popularity of the artist and the quality of the music.
- Video game sales make up the remaining 15% of NFT seller revenue, with the average sale price being $500. Video game NFTs can be sold as individual games or as part of a package deal. Prices can vary depending on the popularity of the game and the quality of the graphics.
Pricing: What are average prices among NFT sellers
NFTs can be sold for a wide range of prices, depending on the item’s rarity, popularity, and artistic value.
- High-end NFTs can sell for tens or even hundreds of thousands of dollars. For example, an NFT of a digital artwork by Beeple sold for $69 million in March 2021. This set a new record for the most expensive NFT ever sold.
- Mid-market NFTs can sell for a few hundred to a few thousand dollars. For example, an NFT of a digital artwork by artist Mike Winklemann, better known as Beeple, sold for $3,000 in February 2021.
- Low-end NFTs can sell for a few dollars to a few hundred dollars. For example, an NFT of a digital artwork by artist Aydin Cetinoglu sold for just $7 in February 2021.
What are the profit margins in the NFT seller business? In a percentage range.
The profit margins in the NFT seller business can vary greatly depending on a number of factors, such as the type of NFTs being sold, the price of the NFTs, and the costs associated with selling them. However, as a general rule, profit margins for NFT sellers tend to be quite high. It often ranges from 50% to 90%.
One of the main reasons why profit margins are so high in the NFT seller business is because there are very few costs associated with selling NFTs. For example, unlike physical goods, there are no manufacturing or shipping costs associated with NFTs. In addition, NFTs can be sold instantly and globally via the internet, which further reduces costs.
Another reason why profit margins are high in the NFT seller business is because there is currently a lot of demand for NFTs. This demand is driven by a combination of factors, including the increasing popularity of cryptocurrencies, the unique and valuable nature of some NFTs, and the fact that NFTs can be used to represent a wide range of digital assets (including art, music, videos, and more).
As demand for NFTs continues to grow, it is likely that profit margins for NFT sellers will remain high. However, it is important to note that profits can vary greatly from one seller to another, and even from one sale to another.
Expenses
What is the cost to build a NFT seller business? With an example.
The cost of building a NFT seller business can vary greatly depending on the size and scope of the operation. For a small business, the cost of setting up a website, creating and marketing digital assets, and processing transactions could be as low as a few thousand dollars. For a larger operation, the cost could be tens of thousands or even hundreds of thousands of dollars.
Here are three examples of businesses that have built successful NFT seller businesses:
- CryptoKitties is a digital collectibles game that allows players to purchase, breed, and trade virtual cats. The company was founded in 2017 and has since raised over $12 million in funding. The cost of building the CryptoKitties platform likely ran into the hundreds of thousands of dollars.
- Decentraland is a virtual world where users can buy, sell, or trade virtual property and goods. The company was founded in 2015 and has raised over $35 million in funding. The cost of building the Decentraland platform likely ran into the millions of dollars.
- Blockchain Cuties is a digital collectibles game that allows players to purchase, breed, and trade virtual pets. The company was founded in 2018 and has raised over $2 million in funding. The cost of building the Blockchain Cuties platform likely ran into the hundreds of thousands of dollars.
List and description of the top three ongoing expenses for NFT sellers. What percentage does each represent?
The top three ongoing expenses for NFT sellers are the costs of minting, storing, and managing their NFTs. These costs can vary depending on the size and complexity of the NFT, but they typically represent a small percentage of the total cost of selling an NFT.
- Minting costs are usually the most expensive part of selling an NFT, as they can range from a few dollars to several thousand dollars depending on the size and complexity of the NFT.
- Storage costs are also typically significant, as NFTs must be stored securely in order to prevent them from being lost or stolen.
- Finally, there are also the costs of managing an NFT portfolio, which can include things like paying for software to track prices or hiring someone to manage sales and marketing.
In terms of actual percentages, minting costs typically represent the largest expense for NFT sellers, followed by storage costs and then management costs. However, these percentages can vary depending on the specific circumstances of each seller.
History, strategy and challenges
What is the history of the NFT seller business? With examples for each continent of the world.
Here is a brief overview of the history of the NFT seller business on each continent.
North America
The first known NFT sale in North America occurred in 2010, when a company called CryptoKitties sold a virtual kitten for $140,000. This sale sparked a lot of interest in the potential of NFTs, and many other companies soon began selling NFTs of all kinds, including digital art, collectibles, and even virtual land. The NFT market in North America has since grown to be worth billions of dollars.
Recent challenges for NFT sellers in North America include the increasing popularity of non-fungible tokens (NFTs) on the Ethereum blockchain, which has led to high gas fees and slow transaction times. Some NFT sellers have also been accused of scams, and there is currently no regulatory framework in place for the industry. Despite these challenges, the NFT market in North America continues to grow.
South America
The first known NFT sale in South America occurred in 2017, when a company called Upland sold a virtual piece of land for $100,000. Since then, the NFT market in South America has grown steadily, with many different companies selling all kinds of NFTs, including digital art, collectibles, and even virtual land. The NFT market in South America is currently worth millions of dollars.
Recent challenges for NFT sellers in South America include the lack of regulation around the industry, which has led to some scams. Additionally, many people in South America are not familiar with blockchain technology or how to use cryptocurrency, which can make it difficult to sell NFTs.
Europe
The first known NFT sale in Europe occurred in 2018, when a company called Decentraland sold a virtual piece of land for $200,000. Since then, the NFT market in Europe has grown steadily, with many different companies selling all kinds of NFTs, including digital art, collectibles, and even virtual land. The NFT market in Europe is currently worth billions of dollars.