SO YOU WANNA MINT YOUR OWN NFTs?
So, you want to jump on the NFT bandwagon, but don’t know where to begin. Here are some questions to ask yourself before you embark on your NFT journey.
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OVERVIEW:
NFTs are coded with software code (called smart contracts) that govern aspects like verifying the ownership and managing the chain of custody and transferability of the NFTs. Like any software application, NFTs can be further programmed beyond the basics of ownership and transferability to also include a variety of other applications and functionality, including those linking the NFT to some other digital or even physical asset. As a bonus, an NFT’s smart contract can be written to automatically allocate a portion of the amounts paid for any subsequent, follow along or secondary sale of the NFT back to the original owner, thus giving the creator an ability to realize the benefits of the secondary marketplace.
Thus, when someone makes (or “mints”) an NFT, they are writing the underlying smart contract code that governs the NFT’s qualities, which are added to the relevant blockchain where the NFT is managed. Notably, certain NFT marketplaces only function with certain blockchains, and so the choice of blockchain to use for an NFT can have real commercial implications for the seller both for the primary sale and any secondary sales. We are marketplace agnostic.
It’s important to do your own due diligence when considering creating NFTs. Here are but a few items to consider when thinking aboutcreating an NFT:
1.
What blockchain are you going to write your NFTs to?
(a) Ethereum ERC-721 / ERC-1155
(b) Cardano, (if so) we will assume the following:
You own (or have access to) a full Cardano-node
You are at least a little bit familiar with the Cardano-CLI and its concepts
You have an ada wallet with at least 2 ada.
(c) Enjin’s Efinity powered by Polkadot
(d) Flow
(e) Wax
(f) Other (if so, which auction or sales platforms/houses work with that chain’s code?)
2.
Are you offering a series, runs or individual NFTs? If a series, how will your content provide uniqueness for each one? Audio? Video? Animation?
3.
Will you straight up sell, or will you use an English or Dutch auction for your NFTs? If you’re considering an auction, what is your reserve or floor, and what are your bidding increments?
4.
Do you plan to do a “gift with purchase” one time experiential /physical offering with the first owner of any of your NFTs? If so, what is the out of pocket cost for that, and how much needs to be added to the auction/selling price?
5.
Do you plan to sell by Cryptocurrency exclusively, or will you need to facilitate a Fiat (regular banking) currency secure payment method for your demographic?
6.
Have you considered the issue of Securities and how different NFTs might be treated under various sale circumstances?
7.
How will you market / advertise / solicit your NFTs in accordance with federal and international guidelines for paid advertising and and necessary regulatory disclosures?
8.
How will you handle minting?
9.
If you are operating as a 5013(c) will you need to create a “trust wallet” to receive ETH payments through Counsel?
10.
Should you choose a marketplace that employs proof of work or proof of stake strategies?
11.
Do you know how to account for commission or gas fees in your pricing strategy?
12.
Are wrapped or sharded, also referred to as fractional NFTs, a good strategy for you to present a unique value proposition to your buyers for certain items?
13.
When choosing a digital wallet are you aware of, and can you account for the variety of service fees, transportability and banking regulations?
14.
When you hash your off-chain asset to an Interplanetary File System (IPFS) repo, what criteria should you use to determine where to pin it?
SUMMARY
In other words, you COULD also make sushi for yourself every lunchtime, But why on earth would you?
These are just a selection of the items that need to be considered very carefully. Like any business, to succeed, you need to surround yourself with leaders that can help you reach your goals.
We are here to help. Contact us today!