In this guide, you will learn about creating NFT tokens, how to make, how to receive and how to issue NFT tokens.
Ethereum has become the star of the crypto economy in 2022 thanks to the breakthrough success of growing smart contract platform sectors such as decentralized finance.
In addition to DeFi, there are also non-fungible tokens (NFTs), which have given birth to another of the most promising, albeit lesser-known applications of the Ethereum network. Notably, most NFT-related activity takes place on the Ethereum blockchain.
If DeFi consists of “money Lego bricks,” then NFTs can be roughly described as programmable “media Lego bricks.” Simply put, these special tokens are provably scarce digital assets whose origin and ownership are protected by the Ethereum blockchain.
This new cryptocurrency token standard has the potential to empower talented people (be they artists, developers, or anyone else) in a variety of ways that were previously unimaginable, such as integrating automatic royalties into digital assets.
What are NFTs (non-fungible tokens) - how to release NFTs
Fiat money is fungible, for example a $5 bill is completely fungible with any other $5 bill. Likewise, cryptocurrencies such as Bitcoin and Ethereum are fungible, meaning 1 BTC is fungible for 1 BTC, 1 ETH is fungible for 1 ETH, and so on.
On the other hand, NFTs are unique and non-fungible. Technically, such assets rely on blockchain token standards, such as ERC-721, which provide them with these properties.
For example, in Gods Unchained, playing cards are presented as NFTs.
In this way, NFTs are like digital collectibles with a limited edition (sometimes NFTs can be released in a single copy). Moreover, such assets are liquid (they can be sold through a DEX on Ethereum) and in some cases useful (NFTs may have applications in the digital environment).
The NFT ecosystem first took off in 2022 with the launch of innovative collectibles projects like CryptoPunks and CryptoKitties, and since then the space has expanded into a variety of new use cases and industries. According to analytics site NonFungible.com, more than $137 million has been traded in the NFT economy so far, with nearly $2 million of that trading volume taking place in the last week.
Conclusions on NFTs
It's an exciting time to explore the NFT economy as the market is just nascent. Combine this thesis with the fact that recently more than a few projects have begun experimenting with NFT and DeFi combinations. Most likely, NFTs will pick up the DeFi hype and will further develop and grow.
Of course, the NFT sector is still relatively small compared to DeFi, but NFT properties are already empowering creators in ways that weren't possible before.
Over time, more artists and innovators will undoubtedly use these tokens for their unique properties and, in turn, expand on them in new ways. Moreover, platforms outside of Ethereum will also pay more attention to NFTs as they grow in popularity. This is already happening today!
The article was prepared based on materials from Blockonomi. In the future, we will explore the topic of creating, buying and selling NFTs using specific examples.
How to create NFT - how and how much it costs to create an NFT token
This only takes a few minutes if you already know which file to use. There are several programs for creating NFTs. We offer step-by-step instructions for one of them.
How to register an NFT token - registration
Install the Metamask Chrome extension. It registers an Etherium-based digital wallet that can be accessed directly from the browser.
Open the Opensea NFT exchange website. In the upper right corner, select Create, and in the drop-down menu, select Submit NFTs.
Prepare the file. Almost any NFT can be called art, but the artistic value of most tokens seems dubious. Simply put, not every NFT needs to be a work of art in the traditional sense. You can draw an nft product. Even a photo of your cat, dog, or a photo of them together will do. Once the file is ready, click Create a new collection.
Create your collection. Add a title, logo, and short description.
How to post an NFT
Add a new object. After this, the platform will offer an agreement (now you won’t have to pay anything). Accept its terms and proceed to the next step.
Upload your artwork. OpenSea supports JPG, PNG, GIF, SVG, MP4, WEBM, MP3, WAV, OGG, GLB and GLTF formats. The maximum file size is 100 MB. Authors may be able to find ways to use larger file sizes, but most NFTs work better with short videos, tunes, or images.
Click Add New Item and accept the terms of another agreement. Add your image and specify the number of copies. Authors can optimize search results by adding information about properties, levels, statistics, and copies in circulation. The platform also allows you to add exclusive content that only the owner can view.
You now own a non-fungible piece of digital art. When asked about the cost of creating an NFT token, the answer is it’s free.
Creating NFTs: starting with files
If you are interested in creating NFTs, the place to start is with media. NFTs can support an array of files such as visual files (JPG, PNG, GIF and others), music files (MP3 and others), 3D files (GLB and others) and in some cases other data types.
As a result, first you need to prepare the necessary file for its future tokenization. Once your traditional file is ready, you simply take the extra step of uploading it to the minting platform to tokenize it as an NFT.
How to create (or mint) an NFT
There are already many platforms for creating/minting NFTs in the Ethereum ecosystem, and they all have their own features.
There are do-it-yourself platforms such as OpenSea, Rarible, InfiNFT, Mintbase and Cargo. These projects allow creators to easily create their own NFTs, be they fine digital art assets, membership cards, or others, without permission.
In addition, there are platforms for creating NFTs that require prior approval from administrators. In this case, you first need to submit an application and only after verification and verification will you be able to mint the NFT. For example, two such projects are SuperRare and Async Art.
Once you have your file ready and your minting platform selected, you will connect your Ethereum wallet (via Metamask for example), upload your file (similar to how you would on major platforms like Imgur or Flickr) to selected platform and fill out the following description of the asset.
At this point in the process, you will be able to specify whether you want to create a standalone version or an editorial version, the royalty percentage for your asset, the content available upon unlock, and much more (the platforms have explanations at each step + instructions are available). Once all this is prepared, you can start the minting process, which will require some ETH to pay for the approval and minting transaction.
Note: Some weeks Ethereum gas prices can be very high and NFT creators then face extremely high token minting costs. There are several options to solve this problem: 1) wait for gas prices to decline, 2) wait for layer 2 scaling solutions to become more widespread, 3) or raise NFT prices to offset gas costs.
What are NFTs: types of unique tokens
NFTs can be used to tokenize anything, since the “media content” of tokens can be different. The most popular use cases for NFTs are:
- Digital art (SuperRare, KnownOrigin, Async Art, Rarible, etc.);
- Digital music (Mintbase, InfiNFT, etc.);
- Virtual real estate (Cryptovoxels, Decentraland, etc.);
- VR wearable devices;
- Game assets (Axie Infinity, Sorare, Gods Unchained, etc.);
- Event tickets/attendance receipts;
- Subscription services;
- Blockchain domain names (Ethereum Name Service, Unstoppable Domains, etc.);
- Tokenized luxury goods such as wine;
- Tokenized insurance policies (yEarn's yInsure tokens, etc.);
- And many other things!
How to mint NFTs?
It is very important to understand what exactly an NFT can become. Is this category exclusive to digital art, or can physical works be included as well? While still rare, physical collectibles can also be represented as NFTs. In these cases, the private key to the wallet containing the NFT is usually embedded in or provided with the physical item.
One Christie's auction even sold an NFT-inspired physical art object - Block 21 (42.36433° N, -71.26189° E) (from Portraits of a Mind) with a corresponding NFT on an OpenDime hardware wallet.
However, it is much more common for custom NFTs to be created for digital works of art, songs, GIFs and videos. NFTs can also include video game collectibles and staking financial products. However, crypto art and NFTs are not limited to just one format, so creativity knows no bounds when creating NFTs.
How to value collections and individual NFTs
The price of an NFT is an ephemeral parameter. Depends on demand, supply and fashion. Crypto followers collect fragments to obtain an entire NFT token, trying to find a rare one or one that has become iconic. The passion of a collector is not always at odds with rationality. The investment motive is also present in the mentioned case. And the presence of enthusiastic collectors is a good sign, meaning that perhaps non-fungible tokens are not a short-term trend.
In general, if we are talking about purchasing for the purpose of resale at a higher price, you should focus on the following parameters:
- Issuer's reputation.
- Rarity according to the issue standard.
- Type, if we are not talking about ERC-721.
The NFT world has laws similar to conservative creative trends. A single copy of a token from a famous person or company is expensive. Serial ones are cheaper, and copies have a minimal price. The lower limit can be found by visiting the OpenSea platform.
At the same time, storing non-fungible tokens should be treated with the same care as regular coins. Losing the private key means losing access to the NFT address. It is better to store expensive items in hardware wallets or even in several, so that in case of hacking, minimize the risk of losing the entire collection.
(In)availability of NFTs
NFT technology partially destroys the “traditional” hierarchy, which creates unequal conditions in a fairly centralized art market: your success is often determined not by artistic skill, but by a set of factors independent of you, for example, gender, race or background.
The world of NFTs looks quite hopeful and promising: for the first time, an artist can act independently, which opens up new opportunities for many talented creators who could not hire an art dealer; he receives royalties from the sale of each of his works and always remains the sole owner of the originals; The global NFT market covers the entire world and geography is no longer a barrier for creators.
Although the decentralization of NFTs is often questioned, this niche is not completely independent from the traditional leaders of the art market. The NFT market often requires institutional intervention, and closed NFT platforms that can only be entered through a pre-screening process clearly emulate the policies of art galleries. Additionally, to a lesser extent, the artist's reputation and connections with prestigious institutions also affect his performance in the NFT arena.
On academic performance, but not on access to it. It was the availability of NFT platforms that played a cruel joke on them, causing a large influx of people interested solely in potential profit. Many artists and amateurs have begun to create works specifically for the NFT market, carefully monitoring its trends in digital art and consciously imitating successful authors. This unethical pursuit of quick profit is destroying the landscape of the entire art market. In addition, due to the heavy congestion of this niche with low-quality works, many people can hear the opinion that NFT art is not art at all, because every second person has access to it, and a large arsenal of tools greatly simplifies the process of creating digital work.
Do I need a specific wallet to use NFTs?
It all depends on the network in which you want to create your token. Fortunately, most wallets today support the Ethereum and Binance Smart Chain networks, and there is not much difference between the wallets. Both blockchains are the most popular for creating NFTs.
The most important thing here is to check the blockchain network on which your token is created. If it is an Ethereum token, you will need a wallet that supports Ethereum. If Tezos, then you will need a wallet that supports Tezos.
For convenience, we recommend using MetaMask or Trust Wallet. These two crypto wallets support multiple blockchains. However, you should always check if your wallet supports the specific blockchain your token is on.
Send Ethereum to your crypto wallet
Now that you've purchased Ethereum from a crypto exchange and have MetaMask up and running, it's time to load up some Ethereum into your crypto wallet.
To send Ethereum from your exchange, go to the "send" or "withdraw" page, which allows you to transfer funds to a crypto wallet. You will need to fill out:
- amount in Ethereum you want to send
- your public Ethereum address
When you set up MetaMask, it will automatically generate a public Ethereum address for you. It appears at the top of the MetaMask popup window and starts with "0x". Think of your Ethereum address as your bank account number on the blockchain.
Which blockchain is better to use?
When creating an NFT, you have a huge choice of blockchains. The Ethereum network was the first major blockchain to offer non-fungible tokens as we know them today. The list of NFT-compatible blockchains now includes Binance Smart Chain, Polkadot, Tron, Tezos and many more. Most NFTs currently exist on either the Ethereum network or BSC. However, Ethereum's high fees have made mining and processing NFTs quite expensive. Binance Smart Chain is a much cheaper alternative with high transaction processing speed. There are many marketplaces and NFT projects, which opens you up to a wider audience of potential buyers.
Where and how to sell or buy NFT - how much does it cost to mint an nft token
To sell an NFT on OpenSea, you must first place it in a collection. Then you need to select it and click the Sell button. A page with pricing options will then appear. On it you can determine the terms of sale, be it an auction or a fixed price.
On most platforms, NFTs can be sold for Ethereum and ERC-20 tokens. However, some marketplaces only support their native token. For example, VIV3 only accepts FLOW tokens from the blockchain of the same name.
By clicking on the Edit button next to a file from a collection on the OpenSea platform, you will need to sign the message using your wallet.
Scrolling down the page will give you the option to set up royalties and select assets to receive as payment.
Royalties allow NFT creators to earn commissions from the resale of tokens. This is a potential source of passive income, automated thanks to smart contracts.
Inspired by Jack Dorsey, many users are turning tweets into NFTs in hopes of selling them for crypto assets. They use the Valuables platform to do this.
The screenshot below shows the tokenized first tweet of the Twitter founder and the $2.5 million bet made by Bridge Oracle CEO Hakan Estavi.
Previously, Tron founder Justin Sun offered $2 million for this NFT. The tweet was subsequently sold to Estavi for $2.91 million.
Among famous personalities, Dorsey was not the only one who tested the service - the head of Binance, Changpeng Zhao, received $6,600 for one of his tweets. This NFT was subsequently resold for $121,000.
Anyone on Twitter can try their luck on Valuables; you don't have to be a celebrity to do so. Everyone also has the option to bid on a tweet created by someone else.
In technical terms, an NFT is a small piece of code that points to a file located somewhere on the network. In the case of Valuables, the token contains the text of the tweet stored in the Matic blockchain. It can also point to the tweet image (if there is one) hosted on a centralized server.
To interact with Valuables you will also need an Ethereum wallet like MetaMask. After connecting it, you will need to log in using Twitter for the platform to gain access to your social network account.
After this, the Valuables setup is complete. You can bid and put your own tweets up for sale. To do this, you need to copy the link to a tweet that is popular and interesting in your opinion and paste it into the paste tweet URL field.
The service will ask: “Do you want to sell the tweet?” Below there will be a blue button asking you to tweet.
Once published, anyone will be able to follow a link to Valuables, place a bid, and possibly purchase an NFT.
Buying NFTs is also not a problem; there are many services for this. Some of the most popular:
- OpenSea;
- Rarible;
- Nifty Gateway;
- SuperRare;
- Zora;
- Axie Marketplace;
- Foundation;
- NFT ShowRoom;
- BakerySwap;
- VIV3.
KnownOrigin's trading platform, launched in February 2022, may be of interest to designers and artists. Using the internal ERC-721 KnownOriginDigitalAsset (KODA) token, users can purchase art objects, as well as confirm the authenticity and authorship of their creation. KnownOrigin has over 19,000 pieces of art for sale.
The Pixura project offers templates for NFT marketplaces that allow you to launch marketplaces with any ERC-721 token.
Alternative Methods for Mining NFTs
You can also purchase NFTs by participating in various sweepstakes, competitions, and airdrops.
An airdrop is a free distribution of cryptocurrency. To receive tokens for any project, the user needs to follow simple steps: download and install an electronic wallet, register an account, repost, subscribe to news, etc.
Thus, CoinGecko gives out “candy” to its users as a reward. With these “candies,” you can later buy NFT tokens: some of them are quite cheap and can be bought right away, while others require saving up a certain amount of “candy.”
Another example is sweepstakes and competitions from the Binance cryptocurrency exchange. The prizes here are NFTs from various projects (Sorare, Axie Infinity, Aavegotchi). To win, you need to take part in quizzes, trade in pairs with the cryptocurrencies of these projects, etc.
Create an account on a cryptocurrency exchange
The first step in creating your NFT—or anything in crypto—is to create an account on a cryptocurrency exchange such as B|inance or Huobi.
Crypto exchanges are places where you can easily buy and sell cryptocurrencies. READ
List of NFT marketplaces for buying/selling digital art, rocks & punks
You need a crypto exchange account because you need to buy Ethereum to pay the one-time NFT creation fee - we'll explain this in the next section.
And, yes, if your NFT sells, you can cash out your earnings, convert to another cryptocurrency, or do other things that the crypto exchange allows you to do.
The most popular NFT projects
The NFT space continues to gain momentum this year thanks to companies that entered this niche at the very beginning, as well as companies that are just entering the popular field, trying to build on the success of their “brainchild”, increasing the popularity of the brand.
The most relevant and popular projects in the NFT niche at the moment are:
- CryptoKitties;
- F1 Delta Time;
- Aavegotchi;
- Gods Unchained.
We have already talked about the game CryptoKitties. This game is a pioneer among other companies in the NFT field. People raise and care for pixel cats.
Subsequently, they have the right to put them up for auction and sell them. Of course, at the start in 2022, the project was at a crazy peak. 4 years later, a lot has changed and now CryptoKitties is losing its leading position in the top to its competitors.
The blockchain-based game F1 Delta Time is often compared to the game of collecting NBA player cards, only in this case users are hunting for items from the Formula 1 racing competition.
You can collect cards of racers, cars, tracks and other items from the automotive segment. In addition to the fact that the game is interesting to compete with other participants, you can earn a lot of money in it. For example, if the track you purchased was used for a race, you will receive a bonus payment.
Aavegotchi is an extremely interesting, profitable and popular project, the developers of which have always stated that their game was made for the sake of fun and the development of the De-Fi sphere. The player receives a character for his use.
It needs to be pumped up and dressed up in order to win battles with opponents. A well-leveled character can be sold or kept for your collection.
Gods Unchained is a card game based on blockchain technology, which makes it transparent, reliable and protected from scammers. In this game you will need the ability to think strategically, make complex decisions and have an analytical mind.
Recently, the project has strengthened its position in the tops and is without a doubt among the top 5 most popular games using NFT tokens.
We have reviewed the most popular projects, now we will tell you about NFT tokens with the highest value.
The most expensive NFT tokens
Of course, it is worth highlighting the following NFT tokens:
- Singer Grimes managed to earn $5.8 million from 400 NFT tokens. Animation drawings of her brother were purchased;
- The famous tokenized meme Nyan Cat, which became one of the first memes, was bought for 590 thousand dollars;
- An American gallery sold one of the most famous works by artist Banksy for $95,000. Blockchain company Injective Protocol chose to burn the painting and now intends to sell it in cryptocurrency;
- At the end of February 2022, the world-famous auction Christie's put up for auction the most expensive NFT token worth $69 million - the digital collage “Every day. The First 5000 Days” by digital artist Michael Winkelman;
- DJ 3LAU became the first musician in the world to tokenize his work. At the moment, he has managed to earn about $12 million.
Who can make money from NFTs
At the moment, the field of NFT tokens is very young and has not yet become popular. Therefore, large corporations, companies and billionaires have not yet entered this market, thanks to which there is an opportunity for talented authors to earn money. Here, as in any other life situation tied to money, you need luck, an idea and a lot of work. Anyone can find themselves in this field, from an artist to a writer.
Let's take as a basis the example given just above, how an artist from the USA managed to sell a large collage for 69 million dollars from 5 thousand images (he painted it for 13 years). This seems strange, because how could one earn so much money from pixels posted on the Internet?
If we talk about music, then you can safely exhibit your compositions on various thematic portals and make a profit from them. As was said at the beginning, this will protect the musician from losing part of the income given to managers and studios. In addition, the blockchain network shows the promise of this area. So far, the amounts are not comparable to games or art projects, but if a famous artist like “Eminem” or “Weekend” enters this area, everything can quickly change.
NFT tokens have gained enormous popularity in the field of online games, for example, “crypto kittens”, giving users the opportunity to earn good amounts. You just need to devote a lot of time to your pixel pets. The option with cards also looks optimistic, considering what records are currently being set by the cards of NBA or Formula 1 players. A rare NFT token can be valued at a tidy sum.
We create legal NFTs in 3 steps and protect them as intellectual property
Let's immediately bring order to the chaos and stop the scam. Current situation and international law
The explosion of interest and growth in the NFT token market has brought to the surface key issues in the industry. We have developed a legal model for creating NFTs based on the Paris Convention for the Protection of Industrial Property and a new instrument of the World Intellectual Property Organization (WIPO) at the UN. This method has supranational legal status and does not require additional legalization in 177 countries. It also only takes 15 minutes and costs pennies. By combining international law and NFT, we will all together create a huge new market by the end of 2022. Here are sample contracts and all the details so that you can apply them yourself.
What kind of intellectual property can be turned into NFTs using this methodology?
- Trade secrets and undisclosed know-how.
- Creative work. Audio, visual or literary.
- Creative design. For example, a brand logo, ornament, textile or architectural design.
- Industrial project. Various technical diagrams, plans and processes.
- Program code. Games, applications, etc.
- Research. Including in the form of laboratory notes, reports and other results.
- Data. For example, the results of training artificial intelligence algorithms, the results of genetic sequestration.
Such information can be converted into NFT tokens and sold, both as a whole and in shares of participation in the creation, development and use of IP objects. About half of outstanding inventions remain partially or entirely in the form of know-how to prevent illegal use. This method creates a market for the legal trade of such intellectual property. In addition, not every result of intellectual activity is subject to legal protection and is considered an invention by definition and due to exceptions established by law. Such objects can be non-technical solutions to problems, projects, diagrams, ideas, etc. The method prevents theft and can also bring some order to transactions with know-how.
Step 1. Create a PDF document with your intellectual property. We sign with your electronic signature.
The signature is associated both with you, the author, and with the document itself. A document signed with an electronic signature has the same legal force as a document signed by hand in paper format.
Step 2. On the WIPO PROOF of the World Intellectual Property Organization (WIPO) at the UN, upload the document and receive a WIPO token
It's an online service that quickly creates tamper-proof proof of the existence of your digital file at a specific point in time. This new service from the world's premier intellectual property rights organization provides a way to protect valuable digital assets, be it creative work, product design, invention, or research data and insights gained from innovative work.
Step 3. Convert token I into an NFT. In the public description (metadata) we indicate the terms of ownership of the intellectual property transferred by the author to the owner of this issued NFT token. And we sew in an IPFS link to the Public Offer Agreement for the Sale of Know-How, signed by the author. II. There we also describe the essence of the undisclosed invention, the scope and results of experiments. We describe the materials contained in the private part. III. We enclose a certificate from the World Intellectual Property Organization. IV. Optionally, you can add a report from an international patent attorney on novelty, inventive step of know-how and industrial applicability. This allows the buyer to “feel” the invention before purchasing. V. In a private description (Unlockable Content), available only to the token owner, we post an IPFS link to an encrypted archive with all materials and drawings. And also an IPFS link to the WIPO token, which is inextricably linked with the certificate in the public part.
Example we made for demonstration
Link to example
My friend, Sergey Vinogradov, Eurasian patent attorney (registration number 3) with whom this methodology was jointly developed. But he is also a physicist and engineer-inventor. We have posted his undisclosed invention to improve the Tesla coil in full accordance with the above principles.
He managed to reduce resistive losses by up to 70,000 times, expand the dynamic range, and also increase temperature and mechanical stability. This is a “core invention” for a new generation of elements in the field of electrical engineering, energy and instrumentation. This will significantly reduce global losses during energy transportation and transformation, which amount to 24%.
Supranationality of the agreement and WIPO Arbitration and Mediation Center
Our task was to make a comprehensive procedure for international transactions with NFT tokens valid in the vast majority of jurisdictions. To do this, we make maximum use of the resources of the supranational management organization. From applying the WIPO PROOF certificate to indicating their arbitration center as a space for resolving any disputes. WIPO understands the nature of the know-how transfer agreement exceptionally well. Has expertise and knows how to navigate complex non-standard technological processes of any transactions related to intellectual property.
By now, an environment has been created for the emergence of a new market for intellectual property. On the one hand, WIPO has created a unique priority certificate with author authentication that fits well with its supranational arbitration. On the other hand, the new NFT technology has emerged as a multi-billion dollar market and has confirmed its primary viability.
